De-globalisation and supply chain efficiency crucial to value chain resilience

In an age where geopolitical instability and environmental uncertainty are the norm, a new study provides empirical evidence that the future of global value chains lies not in the dominance of globalisation, but in a blended approach that combines both globalisation and de-globalisation strategies. Their peer-reviewed study, titled “Globalisation, De-Globalisation, the Combination, and the Future of Value Chains”, is published in Sustainability.

The research, based on data from 277 employees in multinational manufacturing companies in Nigeria, presents a structural equation model that interrogates the relationships between these macroeconomic paradigms and the viability of future value chains. The study makes a pivotal claim: globalisation alone cannot sustain the future of value chains, whereas de-globalisation and a strategic combination of both systems offer a more robust and resilient framework.

Can globalisation alone sustain value chains?

The study explores whether globalisation, defined by openness, borderless trade, and international integration, has a direct impact on the future of value chains. Contrary to long-held assumptions, the findings revealed that globalisation does not exhibit any statistically significant direct relationship with the sustainability of future value chains. This means that in isolation, the traditional model of globalisation cannot sufficiently support the resilience and adaptability required for modern supply and value networks.

However, the study did find that globalisation has a meaningful indirect impact when mediated through efficient supply chain management. In this context, the study aligns with the endogenous growth theory, which supports the idea that openness to trade facilitates technological diffusion and innovation. While the theory still holds merit, the authors emphasize that such benefits are not adequate when unaccompanied by mechanisms to buffer global uncertainties, especially during periods of crises such as pandemics or geopolitical conflicts.

The null finding on direct impact is also theoretically consistent with the traditional theory of trade protectionism and institutional theory. Both suggest that external shocks can force national and regional institutions to deviate from global norms in pursuit of stability, thereby diminishing the effectiveness of global integration alone.

What role does de-globalisation play in future supply networks?

De-globalisation, often viewed with skepticism in international economic forums, was shown to have a significant and direct relationship with the future of value chains. Defined as a move toward reduced international connectivity and greater national or regional autonomy, de-globalisation is increasingly viewed as a strategic necessity in a world prone to supply chain disruptions.

The research links de-globalisation with institutional shifts triggered by unpredictable global events, such as the COVID-19 pandemic and the Russia–Ukraine conflict. These disruptions underscored the fragility of hyper-connected systems and made a compelling case for more resilient, locally grounded alternatives. Empirical findings from the study demonstrate that de-globalisation positively influences both supply chain management and the overarching architecture of future value chains.

This resonates with a growing body of literature that identifies domestic-based production, strategic autonomy, and regional trade as tools for risk mitigation. Moreover, the findings support the idea that industrially advanced nations may gain more from de-globalisation due to their technical capabilities, whereas developing economies may face challenges in adapting to more isolated systems. Nonetheless, the authors argue that a singular turn toward de-globalisation is not universally sustainable and must be part of a broader strategy.

Is a combined approach the most viable path forward?

Perhaps the most consequential insight of the study is the confirmation that a hybrid model, combining elements of both globalisation and de-globalisation, holds the strongest promise for sustaining future value chains. This combined approach exhibited the most robust direct and indirect effects on the viability of value chains, outperforming both paradigms when assessed in isolation.

The study found that a combinatorial strategy can mitigate the weaknesses inherent in both globalisation and de-globalisation. For instance, while globalisation promotes resource access and scalability, de-globalisation offers risk insulation and supply chain resilience. By integrating the strengths of both, businesses and governments can develop more adaptive and sustainable systems.

Moreover, supply chain management was found to be a critical mediator in this equation. When supply chains are well-managed, the synergistic benefits of combining global and local strategies are amplified. Efficient supply chain systems allow for the strategic use of international trade when profitable and reliable, while also enabling fallback mechanisms through regionalisation or reshoring when disruptions occur.

This insight carries practical implications for regional economic blocs and multinational corporations alike. The study recommends proactive planning to develop parallel regional value and supply chains that can function independently during global shocks. Additionally, it calls for a rethinking of global economic governance to accommodate institutional diversity and varying national capacities.