Supply chain innovation next big thing for growth

Global demand, which the novel coronavirus pandemic has dampened, is likely to increase once the pandemic is effectively contained. Even global supply chains are expected to face structural adjustments in the post-pandemic era, posing challenges and creating opportunities for developing China's supply chains.

China should, therefore, give full play to its comparative advantages and raise its position in the global supply chains by improving the production capacity of its basic and key industries.

The country's top authorities have said innovation will play a central role in the country's modernization. That means China should enhance the innovation capacity of its supply chains, and promote new consumption, new demand, new market and new values.

Supply chain innovation is also needed to create an entire industrial system. In a sense, the supply chains are the "soul" of the economy, given that supply chains are integral to the survival and success of all industries.

Only by promoting supply chain innovation and promoting the integration of upstream and downstream industries can enterprises truly form a modern industrial system and more stable industrial chains.

China also needs to establish an industrial and supply chain security system on the economic and political fronts.

For example, it needs to put in place a mechanism to deal with economic risks, use advanced technologies to cope with natural disasters and set up a comprehensive and higher-level response mechanism to overcome political risks.

It should also take practical measures to enhance the sustainability of its industrial and supply chains. Sustainability also requires adherence to green and low-carbon development, which means the country should not only require upstream industries to save energy and reduce emissions, but also promote low-carbon, green development.

Given that digitization is the result of the integration of science and advanced technologies and modern production and organization systems, China should promote the digitization of its supply chains, encourage domestic enterprises to enhance their innovation ability by building digital supply chains, and create new values using digital assets.

In the future, services providers, not managers, should build industrial and supply chains keeping consumer needs in mind.

- ECONOMIC DAILY