International Supply Chains - Need for Reform and Opportunities

This study shows what costs and benefits a reconfiguration of supply chains would cause. Both in the context of a descriptive analysis and through a quantitative simu-lation, we investigate the importance of global value chains for the German economy. A shift of production networks back to Germany (reshoring) or to neighbouring countries, such as EU member states (nearshoring), would have a significant negative impact on economic growth in Germany.

Furthermore, from the perspective of the German economy, this study identifies products for which there are dependencies from abroad and examines the corresponding risks of supply failures to which these products are exposed. Given the supply chain risks and uncertainties in the areas of economic policy, geopolitics, global climate change and cyber security, greater geo-graphic diversification of supply chains (compared to exclusively domestically orga-nised production) offers an opportunity to minimise country-specific risks and make supply chains more robust.