Innovation and Technology in Global Supply Chain: Perspectives from South Korea

In the midst of the COVID-19 pandemic and the U.S.-China strategic competition, the global supply chain (GSC) has been newly conceptualized. Now, the term GSC is gaining augmented implications of supply security ahead of economic efficiency. We analyze various factors affecting the changes in the GSC: the rise of China, the spread of deglobalization and protectionism, the use of economic means to pursue diplomatic and security goals, technological advances and automation, formation of economic blocs by RTAs, and supply chain vulnerability to natural disasters such as COVID-19. We present three key words – the U.S.-China conflict, digital transformation, and sustainability – that coin the post-pandemic era, and explain how they are closely related to technological innovation and the reorganization of GSC. In order to respond to the rapid changes of the GSC, we propose Korea should secure strategic autonomy by becoming an innovation hub for advanced technology that leads the global supply chain. The three directions for international cooperation for the benefits of all parties are also presented: To make a level playing field, we should establish international regulation aimed to promote fair competition and international standards on digital innovation to produce positive spillover effects. To establish a sustainable global supply chain, more considerations must be made for universal values such as labor, environment and human rights issues, as well as international standards for the issues. Also we must support developing economies and small-to-mid-sized firms to participate in the GSC. And last, we could consider cooperation in R&D and infrastructure investment. The cooperation could take place by project, in science and technology areas where each country is interested in.