Securing Supply Chain Resilience Requires a Common Vocabulary and Vision
All of this might be disregarded as pedantic word games, if it didn’t mean that the government is missing opportunities to engage with the people who own, construct, maintain, and control the nation’s logistical, storage, and transportation nodes and infrastructure. Policymakers need a better grasp of this rubber-meets-road level of the supply chain. That would certainly produce more targeted policies and investments.
This lack of alignment around vocabulary and vision can be seen in the differing views on industrial policy, such as the CHIPS Act and the Inflation Reduction Act. The public sector views this legislation as working to strengthen U.S. supply chains by filling in areas of the economy where the private sector is not incented to invest. The private sector tends to view financial carrots as picking “winners and losers.”
Similarly, the public sector sees the sticks, like export controls and sanctions, as there to promote compliance and supply chain resilience. To the private sector, they feel like arm twisting and smack of protectionism. Left to its own devices, of course, the private sector opts for low cost, often relying on single sources of supply—the exact opposite of the government’s goal to increase resilience—in the name of “efficiency.”
To achieve real resilience of any supply chain, the United States needs both macroeconomic policies and our logistical nodes and transportation networks to be properly managed and modernized. There has been some movement in this direction. Supply chain resilience now has both whole-of-government and whole-of-country elements. For example, the White House National Security Memorandum on Critical Infrastructure Security and Resilience of April 2024shows some recognition by government that having a strong and modernized transportation infrastructure is vital to the country’s ability to bounce back from disruptions.
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“To achieve real resilience of any supply chain, the United States needs both macroeconomic policies and our logistical nodes and transportation networks to be properly managed and modernized.”
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The memorandum also recognized the importance of “shared responsibility” and noted that “public-private collaboration is vital.” Encouragingly, at its Supply Chain Summit in September 2024, the U.S. Department of Commerce announced seven new strategic partners, including the National Small Business Association and three professional organizations for supply chain practitioners. “Shared responsibility” is a step in the direction of creating an “enduring” public-private partnership and for ‘sustained industry attention to supply chain resilience’ as the “Quadrennial Supply Chain Review” spells out.
These steps could allow for more nuanced and productive conversations with the private sector, while also advancing our national unity of effort to strengthen and maintain secure, functioning, and resilient critical infrastructure and, importantly, supply chains in the name of economic competitiveness and national security.
Karl L. Buschmann is an adjunct policy analyst at RAND. Fabian E. Villalobos is a senior engineer at RAND and professor of policy analysis at the Pardee RAND Graduate School. Their research focuses on the intersection of technology, economics, and geopolitics. This article is published courtesy of RAND.
