August 2, 2024
The global economy is a complex network of dependencies. Some of these are not in the spotlight but are critical to its functioning. Here are a few unnoticed or underappreciated dependencies:
GPS: Beyond navigation, GPS is crucial for timestamping financial transactions, and coordinating logistics and supply chains.
Rare Earth Elements: These are vital for the production of electronics, renewable energy technologies, and military hardware.
Undersea Cables: The majority of international data transfer relies on a network of undersea cables. Disruption could severely impact global communications.
recent example 3/18:
https://www.ft.com/content/bf17fc55-8624-435b-b7dd-bc662a887ba0
$10b worth of financial transactions flow through daily.
Logistics and Freight Shipping: The “Just In Time” manufacturing process depends on precise delivery schedules, which are susceptible to disruptions.
Pharmaceutical Ingredients: Many countries rely on a limited number of external sources for active pharmaceutical ingredients, making them vulnerable to supply chain disruptions.
Agricultural Fertilizers: The global food system depends heavily on synthetic fertilizers, which in rely on natural gas and specific mining operations.
Cloud Computing Infrastructure: Many businesses and services rely on a few cloud providers. Issues with these services could have widespread impacts on the digital economy.
Recent example 6/19:
https://www.ft.com/content/f64383d2-89c7-459a-afce-5c659473050f
The IT failure has affected airlines, banks, broadcasters and healthcare providers from the US and Europe to Australia, Japan and India.
Microchip Production: The semiconductor industry has a few key players, and production is concentrated in specific geographic regions.
Disruptions at the Port of Long Beach: Whether due to natural disasters, infrastructure issues, labor disputes, or other factors, could have significant ripple effects throughout the American economy given the volume of trade that moves through the port.