Business Resilience

Business is not booming. But it is demand, not supply, that is lacking.

In the age of covid-19 producing closer to home is both an understandable urge and smiled on by many national governments (see article), especially for necessities like medicines or face-masks. But a company’s home country is not necessarily the least disruptive place for operations. Many factories in America are closed or running at low capacity: on May 11th Elon Musk reopened the Tesla factory in Fremont, California, in defiance of a public-health order from Alameda county. Meanwhile, Tim Cook of Apple, which continues to make most of its iPhones in China—and sell millions to Chinese consumers—recently told investors that “we have been gratified by the resilience and adaptability of our global supply chain.”

Mr Kouvelis expects companies mostly to go back to their old ways of thinking about the efficiency-resilience trade-off. Firms “manage one shock at a time”, he says. Having so far emerged from this one relatively unscathed, Mr Cook and others may well stick to Andrew Carnegie’s advice to “put all your good eggs in one basket and then watch that basket.” Until the next black swan waddles along.

Read More at Economist

Read the rest at Economist