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Global supply chains enter era of permanent volatility
Global value chains have shifted into an era of enduring structural volatility, compelling businesses and governments to overhaul how products are produced and distributed worldwide. This transformation, detailed in a key report from the World Economic Forum released on January 19 during its 56th annual meeting in Davos, Switzerland, marks disruptions as a defining feature of the world economy rather than fleeting setbacks. Fueled by geopolitical fragmentation, rapid technological advances, and the push toward sustainable energy, these changes demand proactive strategies from leaders.
Kiva Allgood, managing director at the World Economic Forum, emphasized that volatility is now a structural reality leaders must anticipate. Competitive edges will emerge from foresight, adaptability, and ecosystem coordination. The report, titled "Global Value Chains Outlook 2026: Orchestrating Corporate and National Agility," draws from over 100 expert consultations and insights from more than 300 international executives, in partnership with consulting firm Kearney.
Resilience has eclipsed efficiency as the primary growth driver. Nearly three-quarters of business leaders have redirected investments to bolster it, viewing it not merely as a safeguard but as a core engine for expansion. Recent upheavals underscore this pivot: in 2025, tariff escalations among major economies reshaped over $400 billion in global trade flows, while maritime disruptions drove up container shipping costs by 40% year-over-year. Manufacturing output in advanced economies posted its weakest growth since 2009, amid more than 3,000 new global trade and industrial policy measures, triple the annual average from a decade ago.
Per Kristian Hong, a partner at Kearney, noted that 2026 supply chain disruptions will be constant and structural. Supply chain managers must now redesign operational models to thrive amid perpetual uncertainty, moving beyond prediction to inherent flexibility.
To aid adaptation, the Forum introduced the Manufacturing and Supply Chain Readiness Navigator, a digital tool that converts research into actionable insights. It enables governments to identify competitiveness gaps and prioritize reforms, while helping companies assess infrastructure readiness and ecosystem maturity for investment and expansion decisions.
The report spotlights successful national strategies, such as China's heavy investments in 5G-based digital infrastructure, Ireland's enterprise-led skills development through Skillnet Ireland, Qatar's real-time food supply chain dashboard, and Tamil Nadu's stable investment climate positioning it as a reliable global supply chain hub.
Despite the turbulence, world trade hit a record $35 trillion in 2025, per UNCTAD data, though growth patterns have tilted toward regional clusters and politically aligned bilateral partnerships rather than broad globalization. This shift signals commerce evolving along resilient, strategically aligned paths where durability rivals efficiency.
