The Covid-19 pandemic drastically emphasized the fragility of national and international supply networks (SNs),leading to significant supply shortages of essential goods for people, such as food and medical equipment. Severe disruptions that propagate along complex SNs can expose the population of entire regions or even countries to these risks. A lack of both, data and quantitative methodology, has hitherto hindered us to empirically quantify the vulnerability of the population to disruptions. Here we develop a data-driven simulation methodology to locally quantify actual supply losses for the population that result from the cascading of supply disruptions. We demonstrate the method on a large food SN of a European country including 22,938 business premises, 44,355 supply links and 116 local administrative districts. We rank the business premises with respect to their criticality for the districts' population with the proposed systemic risk index, SRIcrit, to identify around 30 premises that -- in case of their failure -- are expected to cause critical supply shortages in sizable fractions of the population. The new methodology is immediately policy relevant as a fact-driven and generalizable crisis management tool. This work represents a starting point for quantitatively studying SN disruptions focused on the well-being of the population.
For centuries, national economies created wealth by engaging in international trade and production. The resulting international supply networks not only increase wealth for countries, but also create systemic risk: economic shocks, triggered by company failures in one country, may propagate to other countries. Using global supply network data on the firm-level, we present a method to estimate a country's exposure to direct and indirect economic losses caused by the failure of a company in another country. We show the network of systemic risk-flows across the world. We find that rich countries …
Catastrophic disruption cascades driven by the nonlinearity of systemic risk
Complexity Science Hub（复杂科学中心）；Institute of the Science of Complex Systems, CeDAS, Medical University Vienna（维也纳医科大学复杂系统科学与CeDAS研究所）；Department of Physics, Bar-Ilan University（巴伊兰大学物理系）；Santa Fe Institute（圣塔菲研究所）
National economies rest on networks of millions of customer-supplier relations. Some companies -- in the case of their default -- can trigger significant cascades of shock in the supply-chain network and are thus systemically risky. Up to now, systemic risk of individual companies was practically not quantifiable, due to the unavailability of firm-level transaction data. So far, economic shocks are typically studied in the framework of input-output analysis on the industry-level that can't relate risk to individual firms. Exact firm-level supply networks based on tax or payment data exist only…
Crises like COVID-19 or the Japanese earthquake in 2011 exposed the fragility of corporate supply networks. The production of goods and services is a highly interdependent process and can be severely impacted by the default of critical suppliers or customers. While knowing the impact of individual companies on national economies is a prerequisite for efficient risk management, the quantitative assessment of the involved economic systemic risks (ESR) is hitherto practically non-existent, mainly because of a lack of fine-grained data in combination with coherent methods. Based on a unique value …
Planning resilient hydrogen supply chains under disruption risk
Brandenburg University of Technology Cottbus–Senftenberg（勃兰登堡工业大学）；Potsdam Institute for Climate Impact Research（波茨坦气候影响研究所）；Interdisciplinary Transformation University Austria（奥地利跨学科转型大学）
Evolution and determinants of firm-level systemic risk in local production networks
University of Rome Tor Vergata（罗马托尔维加塔大学）；INFN（意大利国家核物理研究所）；Centro Ricerche Enrico Fermi（恩里科·费米研究中心）；HUN-REN Centre for Economic and Regional Studies（匈牙利研究与教育网络经济与区域研究中心）；Corvinus University of Budapest（布达佩斯考文纽斯大学）；Northeastern University（东北大学）；ISI Foundation（ISI基金会）；Institute for Complex Systems, National Research Council（国家研究委员会复杂系统研究所）
The resilience of the food supply chain is a matter of critical importance, both for national security and broader societal well bring. COVID19 has presented a test to the current system, as well as means by which to explore whether the UK's food supply chain will be resilient to future disruptions. In the face of a growing need to ensure that food supply is more environmentally sustainable and socially just, COVOD19 also represents an opportunity to consider the ability of the system to innovative, and its capacity for change. The purpose of this case based study is to explore the response an…
Natural and anthropogenic disasters frequently affect both the supply and demand side of an economy. A striking recent example is the Covid-19 pandemic which has created severe disruptions to economic output in most countries. These direct shocks to supply and demand will propagate downstream and upstream through production networks. Given the exogenous shocks, we derive a lower bound on total shock propagation. We find that even in this best case scenario network effects substantially amplify the initial shocks. To obtain more realistic model predictions, we study the propagation of shocks bo…
In the era of a growing population, systemic changes to the world, and the rising risk of crises, humanity has been facing an unprecedented challenge of resource scarcity. Confronting and addressing the issues concerning the scarce resource's conservation, competition, and stimulation by grappling its characteristics and adopting viable policy instruments calls the decision-maker's attention with a paramount priority. In this paper, we develop the first general decentralized cross-sector supply chain network model that captures the unique features of scarce resources under a unifying fiscal po…
