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Field: Internationalisering

Disruptions in international supply chains during the coronavirus crisis

This report focuses on the first set of problems and the measures taken to reduce the risk of future disruptions.

The report is based on a survey done in collaboration with the Confederation of Swedish Enterprise, which has allowed us to use their enterprise panel to collect data. The number of respondents to the survey was 3441 companies, of which 1686 companies (49 percent) used foreign suppliers and therefore were asked some follow-up questions. It turned out that 69.5 percent of the companies that use foreign suppliers had had supply disruptions during some period of the pandemic. For 30.6 percent of these companies, the problems were temporary, but 62.6 percent still had some problems when the survey was done in November 2020 and 6.8 percent still had major problems. The most common issues are (were) longer delivery times, shortages, higher prices and obstacles to staff mobility. Some sectors had also had to accept lower quality due to the shortage on the world market, especially in the health care sector in the first phase of the pandemic.

In the subsequent question, the companies were asked if they had taken or planned any measures to reduce the vulnerability to future disruptions. The most common measures are increased inventories, spreading purchases over more suppliers and countries, and a higher share of domestic and EU / EFTA inputs. Only a small share planned to move the production home to reduce the risk of supply disruptions. The most proactive companies were those that were most affected by the pandemic, where three quarters have taken or planned some measures compared to a quarter for those who have not had any problems.

In a final question, the companies were invited to give their views on what the state can do to reduce the companies' vulnerability to future trade disruptions. The answers were divided into nine groups based on the themes in the free text answers. The first three groups said that the foremost role of the state is to keep markets open and to promote free trade. In addition, they asked for greater coordination of crisis measures within the EU and for the internal market to be open. The fourth group emphasized the importance of strengthened crisis preparedness. A fifth group said that the state should buy Swedish and encourage domestic production. A sixth group stressed the need for financial support during a crisis, less bureaucracy and expedious disbursements. A seventh group argued that the state should focus on long-term measures to strengthen the business community and increase the flexibility in the labour market, which in turn would reduce the need for specific crisis measures. An eighth group expressed general frustration over the management of the crisis, while the final group argued that the state could not do much about the risks in international trade.

The report does offer any policy recommendations. The purpose is merely to produce knowledge about the supply disruptions during the first year of the pandemic and what measures that were taken to reduce the risk of future disruptions.

Disruptions in international supply chains during the coronavirus crisis

Serial number: PM 2021:05

Reference number: 2020/178

Download the report in swedish

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