WHY ARE OUR SUPPLY CHAINS QUITE SO COMPLEX?

For years guided by MBAs and McKinsey we’ve been persuaded to “think global,” construct complex supply chains, offshore production and cut cost. Our world we believed was driven by price and the need to be lowest cost producer. Which was fine when globalisation was the thing and Asia was to the place to get things made.

Covid has changed a lot of things not least the increasing belief driven by the vaccine contretemps with the EU and post Brexit complications that domestic production is the safest strategy for many industries.

Currently my underpants come from Bangladesh, my jacket and my socks from China, my sweater from Cambodia and my T-shirt from America. Over 50% of what I eat and drink comes from outside the UK – from Holland, France, Peru and Spain.

This is not the ranting of a xenophobe. If we’ve learnt nothing else over the past 14 months its been that the old rules don’t apply. The rebellion started with “America First” and then the bizarre decision to exit the EU. No more frictionless travel. No more working across the EU using the business lingua franca – English – to do business. Two years ago I visited seven different EU countries in as many weeks in co-ordinating a project. That won’t happen again. 

Now perhaps for the first time I’ve begun to wonder about whether I’d want to remain in the EU after the shabby performance of Ursula Van Der Leyen over the EU’s failed procurement of vaccine. I’ve been shocked that the EU, rule maker and follower of rules is now a rulebreaker, with member countries off doing their own thing. The irony of their demanding more Astra Zeneca vaccine even as they withdrew permission for its use was eye-wateringly comic.

In a crisis we retreat to localism. The Covid crisis will change many things but the most significant thing will be the pressure to grow and make our own. Small businesses will be created doing what previously bankrupted businesses did until globalisation became the hot, new thing. 

Except there‘ll be a difference. These new businesses will be better run, with electric speed delivery, concern for climate change and with brilliant customer service. We bought a new car recently . The whole process took less than a week. It used to take forever. Thanks to Amazon and the growth of online our expectations have been transformed. Old fashioned standards are dead. Our world is a better place in which (blame it on the ‘elf and safety woke-culture’ in fact) workplace deaths and injuries have plummeted in the past few years.

Our ability to transform our economy  will be driven by the astonishingly interventionalist strategies of the least conservative government we’ve ever had. Once they realised that people must be paid when, through no fault of their own, they can’t work, then the realisation that inspiring and incentivising new businesses that usefully employ people makes economic sense, can’t be far behind.

But the small is beautiful argument always seemed weird to me especially when small as in pubs, shops and roads often meant rotten and inefficient. Equally the argument for scale falls on stony ground. The NHS we’ve been proudly told is globally the biggest employer after the Indian Rail Service and the Chinese Army. Why is that good?

If we want to stop just being a “nation of shopkeepers” as Napoleon scornfully described us we need to start being producers as well. We’re actually rather good at it. Films, gaming, pharmaceuticals, software, cars and shoes – yes, my shoes are all made in Britain.