The Biden Administration’s Supply Chain Disruptions Task Force was created to focus much-needed attention on critical U.S. supply chains. Its recently released report outlines steps to make that happen.
By addressing supply chain vulnerabilities uncovered by the COVID-19 pandemic and other disruptive events, and dedicating resources to combat them, the report promises to boost the confidence of small and medium-sized businesses, and encourage another wave of international expansion.
At the time COVID-19 was starting to spread in December, 2019, some business leaders already had business continuity or contingency plans in place. When countries shut down, they were prepared to take on the challenges of a global pandemic. Others were not, through no fault of their own. Rare events like a global pandemic, sending shockwaves across every industry, are highly unpredictable. Now, however, the federal government is preparing on a broader scale to prevent such events from crippling global operations again.
The report presents a contingency plan for the U.S. as a whole. By anticipating future disruptions of the nation’s supply chains and preemptively working to diversify them, the Task Force has essentially set up a safety net to ensure that American businesses won’t suffer as much in the event of a similar occurrence.
The report makes clear that the federal government is working to diversify international supply chain partners, as well as strengthen both domestic and international supply chain infrastructure. It’s a clear message to businesses and consumers alike that the government is taking steps to ensure that supply chain disruptions don’t affect access to the most basic needs.
Actions to strengthen and diversify supply chains will benefit American businesses of all sizes, whether big-box retailers or mom-and-pop shops. But the report should especially bolster SMB owners’ confidence that they’ll be better protected from unanticipated global disruptions.
In a survey of 600 North American small business owners by public company OFX prior to the report’s release, 59% of respondents operating domestically said they felt supported by the federal government, while just 48% of those operating internationally felt the same way. The Task Force’s call for government support should increase business owners’ confidence, and drive international expansion by those who have yet to venture outside the U.S.
The pandemic showed companies of all sizes that buying and selling internationally doesn’t necessitate a complete shift to operations overseas. During the pandemic, small businesses were able to pivot to e-commerce in new regions through existing online marketplaces such as Amazon.com. In fact, 92% of SMB owners surveyed said their businesses expanded during the crisis, and of the 40% that entered a new market for the first time, 98% reported that the move increased their overall revenue in 2020.
What’s more, 69% of respondents to the OFX survey said they were considering international expansion within the next year. As the world opens back up, we’ll see an increase in SMBs entering new markets, but they can’t do it alone. According to OFX’s data, North American SMBs cited government support as one of the top three most important factors for cross-border success.
Now that we’re seeing the federal government get more involved in ensuring the sturdiness of U.S. supply chains, SMBs will be less anxious about any potential disruptions.
It isn’t just businesses that should be optimistic; consumers will reap the benefits of improved supply chains as well. One of the steps outlined in the Task Force’s report includes investing in research and development to reduce supply chain vulnerabilities. Investments of this kind will ensure that basic, necessary products won’t be manufactured by just a handful of companies. With any luck, consumers won’t have to worry about shortages of toilet paper or sanitizing wipes again. But they’ll have had a life lesson in not taking things for granted.
Alfred Nader is president-North America at OFX.
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