Supply chains and the changing nature of globalisation Aparna ravi

This article originally appeared in the UCL Policy Lab Magazine.

What led you to your research looking at trade and globalisation?  

My family is from India, so we would often visit in my youth, and we’d see the changes through the years in the 90s and 00s as the country opened up economically. It was changing so fast and that fascinated me - the India I saw was so different from my parents’ experiences. They would talk about not being able to get certain items, and so I learned about trade and investment through the lens of that change.  

For much of the last three decades, globalisation has felt unstoppable. Yet it feels like the war in Ukraine and COVID have shown us that a much more divided world is also possible.  

In the 90s, from an academic standpoint, we learned about the Washington consensus as increasingly ineffective, so perhaps the late 80s and early 90s were the prime years for the neoliberal Washington consensus, so by the time of the 00s, you’re seeing the rise of emerging economies, the rise of China, and you begin to see some pushback - is this neoliberal model the most effective? You’ve got the East Asian tigers (Japan, South Korea) with statist economic models, but there are still concerns about state interventions in the economy and valid concerns around corruption, so a lot of governments were grappling with that. 

Your latest work looks at outward investment in the Global South. Can you tell us about that? 

A lot of people look at global south countries through inward investment and see them as primarily receiving capital, but when I was on the ground doing my fieldwork, a lot of Indian and Brazilian firms are competitive overseas and have investments in the UK, US and Europe. India is the second largest investment in the UK, and that story divulged from conventional economic textbooks so that’s what intrigued me about this project. The book explores the rise of this outward investment and in particular, its implication for development in emergent markets. 

What are the implications for those emerging countries?  

My argument is that it is a largely positive trend: when firms from the Global South invest in the Global North, they can get a lot of advantages from it, for example, you get technology knowledge by competing in a developed knowledge, you get better market access and exports, so there are many benefits. Governments that support this trend cite similar benefits - it’s a new capital stream with new advantages. 

Your work touches on the critical role of supply chains in global trade. Did COVID transform our understanding of supply chains?  

I think covid really exposed how interconnected the world is. I think people had a general sense of how these supply chains worked, but perhaps not the extent to which globalisation affects these everyday products we are used to receiving. Moving forward, a lot of firms are trying to make their supply chains more resilient and to do that we need an active government push, including more information about supply chains and guides for how firms may diversify risk. Government and industry could certainly coordinate more. 

Turning to the UK. Clearly post BREXIT Britain is seeking to chart a new path. What lessons does your work teach the UK?   

We were in the age of hyper-globalisation. After 2016, it perhaps reveals that a lot of individuals or groups were left behind during globalisation, so now we need to have governments manage globalisation to ensure we have the benefits of globalisation, but also ensure domestic industries are strengthened, we have worker’s protections, strong jobs- there has been this resurgence in industrial policy intervening in their economies and one of the core challenges and opportunities for the policymakers in the next decade. Being global, but remaining sustainable and not leaving anyone behind. 

Finally, recently came together with other colleagues to work on a paper for the UCL Policy Lab. How was that process.

I think the Policy Lab is a great organisation in that sense, I think there’s a gap between what policymakers need and what academics can provide, so mediating organisations that bridge that gap are useful. I think these big debates certainly inform our research and our teaching - across our disciplines, we have a broad range of knowledge so it’s useful to the policy community if there are strong ties with academia. 

Read the latest edition of the UCL Policy Lab.