Towards Understanding the Role of Global Supply Chains in Achieving a More Sustainable Human Development

Abstract

As the world has increasingly become more globalised, so has the complexity of economic interconnections across the world. The prevailing economic trade structure suggests that goods and services consumed at a certain geographic location embody not only inputs (materials, capital and labor) sourced worldwide but also implications that span across countries and territories. This work traces the direct and indirect, as well as within country and trans-boundary, wellbeing implications of economic activities in different countries and regions of the world throughout the supply chains. Adopting a novel quantitative interdisciplinary approach, socio-economic multi-regional input-output (MRIO) analysis is implemented in globally linking wellbeing of workers and the society participating in the supply chains with international trade flows. The role of supply chains in achieving a more sustainable human development is investigated by analyzing global employment and PPP-adjusted income footprints, global gender pay gap footprints and social welfare footprints. In contrast, when human development is threatened by disasters with cascading supply chain impacts, the recovery strategy may involve accessing supply chain relations to restore human welfare. In effect, this research delivers quantitative and theoretical assessment of trade’s role on affecting what ultimately matters to humankind – sustainable human development. Studies of this kind require efficient compilation of high-quality multi-region input-output tables and a system for handling large-scale data. To deliver on these, the virtual laboratory is envisioned as an enabler for conducting policy-informing and behavioral change-inducing analyses such as this work.