OECD Supply Chain Resilience Review: Navigating Global Risks in 2025

Why Supply Chain Resilience Demands Attention Now

The concept of supply chain resilience — the ability of global trade networks to withstand, adapt to, and recover from disruptions — has become one of the most critical strategic priorities for governments and businesses worldwide. The OECD Supply Chain Resilience Review 2025 arrives at a pivotal moment when global trade networks face unprecedented pressures from geopolitical tensions, climate disruptions, pandemic aftershocks, and rapidly shifting regulatory landscapes. This comprehensive 184-page analysis offers the most detailed assessment yet of how interconnected our economies truly are — and how vulnerable those connections can be.

The stakes are enormous. Approximately 60% of global trade consists of intermediate products — goods and services used as inputs for further production. The import intensity of global production has nearly tripled since the 1960s, rising from 6 cents per dollar of output in 1965 to 17 cents by 2008 and reaching historically high levels by 2023. This deep interdependence means that disruptions in one part of the world can cascade rapidly across entire industries and continents. Understanding how to build supply chain resilience without sacrificing the very real benefits of open trade is the central challenge the OECD sets out to address.

For organisations seeking to navigate these complexities, interactive tools that make dense policy reports accessible can be transformative. Platforms like Libertify’s interactive library are helping decision-makers engage with exactly this kind of critical research material in more effective ways.

The State of International Supply Chains in 2025

The OECD’s review paints a nuanced picture of modern supply chain resilience and the architecture of global value chains (GVCs). Multinational enterprises (MNEs) sit at the heart of this system: their foreign affiliates account for approximately 11% of global gross output, while total MNE activities — including domestic operations — represent roughly one-third of global production. Notably, 71% of foreign affiliate output is produced by MNEs headquartered in OECD countries, underscoring the outsized influence of advanced economies in shaping supply chain patterns.

The sectoral breakdown reveals critical dependencies. Strategic manufacturing industries within the OECD source 26% of their inputs from abroad, while 27% of their output depends on foreign final demand. The most import-intensive sectors include coke and petroleum products (approximately 45% import intensity), water transport (38%), basic metals (38%), and motor vehicles (32%). These figures highlight how deeply embedded international sourcing has become across the industries that underpin modern economies.

The review also examines how supply chain structures have evolved post-pandemic. COVID-19 exerted unprecedented pressure on global logistics, with spikes in perceived uncertainty and trade disruptions reshaping business strategies. The Deloitte supply chain analysis similarly documented these structural shifts across manufacturing sectors. However, the OECD finds that the fundamental architecture of global trade has proven remarkably persistent — supply chains adapted and flexed rather than fundamentally restructured.

Trade Concentration Risks and Import Dependencies

One of the most striking findings in the OECD supply chain resilience review concerns trade concentration. Using Herfindahl-Hirschman Index (HHI) measurements, the review documents that global export concentration increased from approximately 0.14 in 1997-99 to 0.18 in 2017-19. More concerning, national import HHI values average around 0.30 across all countries — far higher than global figures suggest — indicating that individual nations often depend on a narrow set of suppliers for critical inputs.

The number of cases where countries import products from fewer than half of possible global suppliers has risen dramatically. This measure of “significant concentration” is roughly 50% higher in the early 2020s compared to the late 1990s. Non-OECD countries face the steepest challenges: India, Brazil, and Indonesia approximately doubled their significant import concentration scores between the mid-1990s and early 2020s. Even advanced economies are not immune — Chile, Mexico, Korea, and Colombia rank among OECD members with the highest significant import concentration.

The modelling work in the report quantifies what happens when concentrated supply chains face shocks. A 1% production shock analysis found that Canada (exposure of approximately 3.8%), France (3.5%), Germany (3.3%), and the United Kingdom (3.2%) were the most vulnerable OECD economies due to their deep vertical links with foreign suppliers. In contrast, larger domestic markets like China (0.5%), Brazil (0.6%), and the United States (0.8%) showed significantly lower exposure — though none are truly insulated.

China’s Growing Role in Global Supply Chain Networks

Perhaps the most consequential trend documented in the supply chain resilience review is China’s dramatically expanding role as a source of trade dependencies. China’s contribution to countries’ significant import concentration grew from approximately 5% to 30% over the past 25 years — a six-fold increase that has fundamentally reshaped global supply chain geography. During the same period, the combined contribution of the United States, Germany, and Japan to these concentrations fell from 30% to just 15%.

The shift is even more pronounced for middle-income and other economies (MOEs). China became the main trading partner in 60% of excessively concentrated imports for MOEs in the early 2020s, up from just 9% in the late 1990s. For OECD economies specifically, China was the main partner in 22% of significantly concentrated imports, up from 5%. The OECD also estimates that China accounts for almost two-thirds of MOEs’ overall trade with OECD countries, creating a structural dependency that complicates any attempt at rapid diversification.

This concentration has tangible economic implications. Modelling of an OECD-MOE trade fragmentation scenario — simulating a 10% reduction in trade between these blocs — found GDP declines ranging from negligible to about 1.7% depending on country and framework. OECD countries in the Asia-Pacific region, especially Korea and Australia, would be most affected. The U.S. Department of Commerce supply chain tools have been tracking similar concentration patterns, reflecting growing governmental awareness of these vulnerabilities.

Critical Raw Materials and Energy Transition Vulnerabilities

The supply chain resilience challenge becomes particularly acute when examining critical raw materials (CRMs) essential for the clean energy transition. The OECD documents extreme production concentration: the top three producing countries control 92% of global lithium output (Australia, Chile, and China), 90% of rare earth elements (dominated by China), 78% of cobalt (led by the Democratic Republic of Congo), and 65% of nickel (Indonesia, Philippines, and Russia). These materials are essential for batteries, electric vehicles, wind turbines, and semiconductor manufacturing.

Compounding the production concentration, the OECD finds that export restrictions on industrial raw materials have increased approximately five-fold between 2009 and 2022. The number of exported raw material products subject to at least one export restriction measure grew from roughly 3,000 in 2009 to approximately 15,000 by 2023. This surge in resource nationalism creates what the report calls a “double vulnerability” — concentrated supply compounded by increasing policy barriers to access.

There are also environmental dimensions to consider. Global exports of environmental goods grew by 30% between 2012 and 2022, with low-income countries more than doubling their environmental goods exports. However, tariffs on environmental goods remain as high as 13% for some products in low-income countries, creating barriers to the very trade flows needed to support global decarbonisation. The International Energy Agency’s critical minerals programme reinforces these findings with its own analysis of supply chain vulnerabilities across the clean energy sector.

Geopolitical Risks and Policy-Driven Disruptions

Geopolitical tensions represent one of the fastest-growing threats to supply chain resilience. The OECD review documents how policy-driven disruptions — from trade restrictions and sanctions to diverging regulatory frameworks — are reshaping trade patterns. The review notes that pharmaceutical FDI has shown a shift toward geopolitically and geographically closer destinations since 2016, a trend that became more pronounced after 2022, suggesting that businesses are already responding to perceived geopolitical risks.

Physical infrastructure vulnerabilities add another layer of risk. The Panama Canal experienced a nearly 40% reduction in traffic in 2023 due to severe droughts, affecting 10% to 25% of trade flows across ports in Panama, Nicaragua, Ecuador, Peru, El Salvador, and Jamaica. Such climate-related disruptions to critical logistics chokepoints are expected to intensify, creating compound risks when combined with geopolitical uncertainties.

The sustainability compliance landscape is also evolving rapidly, creating both opportunities and challenges for global supply chains. By 2024, supply chain sustainability laws addressing worker rights covered nearly half of global output — up from approximately 5% in 2014. Compliance costs for frameworks like the EU Corporate Sustainability Reporting Directive range from EUR 40,000 to EUR 320,000 annually per firm, with one-off implementation costs of EUR 36,000 to EUR 287,000. For context, 56.8% of embodied employment in textiles is in countries with the weakest labour rights, and 56.7% in electronics — highlighting the scale of the compliance challenge ahead.

The Reshoring Myth: Why Relocalisation Falls Short

One of the OECD supply chain resilience review’s most policy-relevant findings challenges the popular narrative around reshoring and relocalisation. Using sophisticated multi-country modelling, the OECD simulated a “relocalised” supply chain scenario involving 25% import tariffs on all goods, value-added subsidies equivalent to 1% of GDP directed to labour and capital, and halving of substitution elasticities. The results are unequivocal: relocalisation would decrease global trade by more than 18% and reduce global real GDP by more than 5%.

Individual country impacts range from 1.1% to 12.2% GDP losses depending on the degree of GVC integration. More critically, GDP stability actually worsened for more than half of the economies analysed under the localised regime. This means relocalisation not only reduces overall economic output but frequently fails to achieve its primary stated objective of reducing economic volatility. The global trade resilience strategies report explores complementary perspectives on why diversification outperforms isolation.

Broader economic research reinforces these findings. IMF analyses cited in the report estimate that the costs of impeding trade and technology diffusion could reach up to 12% of GDP for some economies. WTO studies on geopolitical bloc division project effects ranging from below 1% to 12% of GDP depending on development level. An IMF Asia-Pacific study found potential output losses of approximately 3.3% of GDP for the region specifically. The evidence consistently points to supply chain resilience being built through better management of connections, not their severance.

Building Triple-A Supply Chains: Agile, Adaptable, Aligned

Rather than retreat from global trade, the OECD advocates for what it terms “Triple-A” supply chains — those that are agile, adaptable, and aligned. Agility refers to the capacity to respond quickly to short-term disruptions through flexible sourcing, inventory buffers, and rapid logistics adjustments. Adaptability concerns the ability to restructure supply chains over the medium term as markets, technologies, and risks evolve. Alignment means ensuring all participants in the supply chain work toward shared objectives, including sustainability and resilience goals.

At the firm level, the review documents several concrete strategies for building supply chain resilience. These include multiple sourcing strategies to reduce single-point-of-failure risks, enhanced transparency and visibility across supply chain tiers through digital monitoring tools, strategic inventory policies that balance just-in-time efficiency with safety stock requirements, contractual arrangements that share risk across supply chain partners, and collaborative supplier development programmes that build capacity throughout the value chain.

The digital dimension is crucial. Maritime transport alone carries over 80% of global goods trade by volume, and the top five ship-owning countries account for half of world fleet tonnage. Digital tools for real-time tracking, predictive analytics, and automated customs processing can dramatically improve the agility of these complex logistics networks. However, the OECD warns that digital STRI barriers grew by 25% over the last decade, threatening to fragment the very digital infrastructure needed for resilient supply chains. Interactive platforms like those available in Libertify’s document library demonstrate how digital transformation can also improve how organisations consume and act on complex supply chain intelligence.

OECD Policy Recommendations for Supply Chain Resilience

The OECD supply chain resilience review offers a comprehensive policy framework built around six pillars. First, trade facilitation: the data shows that a 10% improvement in Trade Facilitation Indicators is associated with an increase in the number of export markets by more than 6% and new sectors by almost 15% in some regions, with intensive margin increases of up to 9%. Between 2017-19 and 2020-22, domestic border agency cooperation improved by approximately 18%, information availability by 16%, and automation tools by 15% — but significant gaps remain.

Second, strengthening key supply chain service sectors. The OECD calculates that closing the Services Trade Restrictiveness Index gap by half could reduce trade costs in air transport by 9-24%, courier services by 7-15%, and logistics by 4-13% depending on subsector. Yet barriers persist: 93% of STRI-covered countries impose conditions on vessel registration, 78% prohibit certain cabotage operations for foreign-flagged vessels, and over 40% have government ownership of major domestic maritime operators.

Third, facilitating digitalisation while managing new risks. The OECD models show that balanced data governance approaches could increase GDP by 1.7% and exports by over 3.5%, while fragmented data governance could reduce GDP by approximately 4.5% and exports by 8.5%. ICT tariffs remain dramatically higher in non-OECD countries (3.7-9.4% average) compared to OECD members (0.07-1.03%), creating barriers to the digital tools needed for supply chain visibility. The WTO trade costs research provides complementary analysis of how digital trade barriers compound logistics costs across global value chains.

The remaining pillars — international cooperation through multilateral and plurilateral agreements, balanced sustainability policies that account for distributional impacts on developing countries and SMEs, and support for firm-level risk management practices — complete a framework that emphasises working with rather than against global trade networks. The OECD is clear: the path to supply chain resilience runs through better management, smarter diversification, and deeper cooperation — not isolation.

Digital Transformation and Cyber Risks in Supply Chains

The final major theme in the supply chain resilience review addresses the dual nature of digital transformation. On one hand, digitalisation offers transformative potential for supply chain visibility, predictive risk management, and automated trade processes. The review documents that global digital trade integration stands at only 8% of the way toward full openness, indicating massive untapped potential for efficiency gains. Computer services and telecommunications are becoming critical infrastructure for trade — yet barriers to these services have been increasing rather than decreasing.

On the other hand, digitalisation introduces new vulnerabilities. Cyber threats to supply chain infrastructure, dependency on a small number of global digital service providers, and rising regulatory constraints on cross-border data flows create what the OECD terms “digital concentration risk.” Just as physical supply chains can be disrupted by over-reliance on a single country for critical materials, digital supply chains face similar risks when key platforms, cloud providers, or data routes become bottlenecks.

The policy implications are significant. Countries that adopt balanced, interoperable digital governance frameworks stand to gain substantially — both in economic growth and in supply chain resilience. Those that pursue fragmented, nationalistic digital policies risk isolating their firms from the very tools and data flows that enable modern risk management. The OECD’s message is consistent across both physical and digital supply chains: openness combined with smart regulation outperforms closed, protectionist approaches. For organisations navigating this complexity, the digital transformation insights offer practical frameworks for assessing and managing these emerging risks.