The Supply Chain Costs of “Digital De-Coupling”


The impact of data protection legislation on the flow of supply chain data is often overlooked when examining headwinds to globalization. Whilst China has become the focus of controversy over its attempts to ‘digitally de-couple’ from the rest of the world, the EU and US have also developed their own regulatory environments which threaten to slow or prevent the transfer of cross-border data between supply chain parties.

As will become evident, the last five years has seen a mass of barrier-building legislation, leading to significant restrictions on data flows. Moreover, whilst many of the problems facing globalization apply to specific industry verticals (e.g. pharmaceuticals or semiconductors), the barriers being built to restrict movements of data apply to all sectors and can be particularly damaging. As an increasing number of countries develop their own data laws, there is the risk of even more fragmentation.

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