Economy of Supply Chains

An economy of Supply Chains.  Thoughts and Statistics.

In HBS Working Knowledge

Business Research for Business Leaders

The Secret Life of Supply Chains
By Michael Blanding:  While US policymakers and politicians focus on reviving the manufacturing sector, Mercedes Delgado and Karen Mills unearth a source of better jobs hidden in plain sight. Call it the supply chain economy.

Like archeologists digging on a remote hillside, business researchers have unearthed an important segment of the United States economy all but hidden from traditional innovation policy, yet accounting for tens of millions of jobs crucial to America’s ability to produce goods and services.

The research rethinks what academics and practitioners have simply called the supply chain—a loose federation of individual suppliers that feed companies with the goods and services necessary to create products for consumers and businesses. But a deeper look reveals existence of an important “supply chain economy.”

According to the researchers, “Supply chain industries are a distinct and large segment of the economy. In 2015, they accounted for over 53 million jobs, 43 percent of US employment.”

“We think this is a breakthrough—a new way of categorizing the economy that recognizes the unique role of suppliers, and seems to have implications for policies that promote innovation and good jobs,” says the study’s coauthor, Harvard Business School Senior Fellow Karen Mills.

For example, the research challenges the focus on reviving the manufacturing sector as the main way to rebuild the American economy. Since 2000, domestic manufacturing jobs have slid on a roller-coaster drop, falling more than 30 percent, or 5 million jobs, largely due to import competition and automation. About 12 million jobs remain in the sector..... "