Global Supply Chain Vulnerabilities and Their Influence on Industrial Policy in Developing Economies

Abstract

Recent global disruptions from the COVID-19 pandemic to geopolitical tensions have revealed critical vulnerabilities in global supply chains, raising important questions about their implications for industrial policy, particularly in developing economies. This study systematically reviews the literature published up to 2023 to explore how supply chain fragility is reshaping industrial policy frameworks in these contexts. The role of this review is to synthesize key insights from academic and institutional sources, highlighting how developing countries are adapting to the shifting dynamics of global trade and production networks. Findings show that many nations are reevaluating their industrial strategies to prioritize resilience, diversification, and regional integration, rather than mere efficiency. Through a thematic analysis of several studies, the article discusses policy trends, institutional capacity, and sectoral adjustments that aim to reduce external dependence and enhance economic autonomy. The review concludes that supply chain vulnerabilities have reinvigorated industrial policy debates, encouraging a shift toward more strategic, flexible, and sustainable policy approaches in the Global South.