Trent Cotney, Partner, Adams and Reese, LLP
If you have purchased materials or done any consumer shopping lately, you know the supply chain is being strained. The COVID-19 pandemic hit the supply chain hard, as manufacturing slowed and transportation suffered interruptions. And now, the Russia-Ukraine conflict has made matters worse. Some of these changes may never be undone. Globalization has been altered.
For many years, globalization grew. In fact, between 1970 and 2008, it seemed unstoppable. As a share of GDP, worldwide exports increased from 13 to 31 percent. But that trend began to skid. Those exports as a share of GDP began to level out and then fall. Global bank loans decreased, as did foreign investments.
The global economy began to decentralize, and that occurrence became part of a trend called “slowbalization.” This term refers to a phenomenon involving a slower global integration rate.
It seems as though a far less global model is coming into view, it will be less interconnected and, instead, it will focus on more regional trade. Reliance on a few worldwide economic players will shift toward multiple economic and political centers. It may be years before dramatic effects will be seen, but the process has begun. Read more.