Several factors have influenced the growth of the economy throughout its history; however, after the 2008 recession, the economy began to grow slowly. The World Bank (2019) pointed out that the investment growth of the OECD countries, decreased 10.6% in the year 2009 and in the year 2019 returned to a diminutive 1.6%, however, due to the COVID pandemic the investment decreased by 6.6% in the year 2020, very serious since the investment index in a context of extreme limits analysis is the only explanatory variable that has systematic and significantly positive relationship with the economic growth.

In the long term, an economic recession tends to raise interest rates, high inflation, high taxes, the demand for goods and services decreases and the number of jobs decreases, studies show that 50% of jobs will disappear in the next decade due to the digitalization, robotics, artificial intelligence and the competition of the collaborative economy.

The function of the Central Banks in mitigating the effects of the recession "helping" companies with liquidity and lower interest rates, causing companies to buy back their shares and borrow excessively, assuming excessive risks, therefore, companies have a high level of indebtedness, however, the Federal Reserve does not establish parameters and remains outside the situation and this has led to an increase in the money supply of 19% per year, a growth never before recorded, for which the world economy has grown since 2008 31% but the amount of money has increased 125%, ie GDP growth does not grow as the money supply, triggering high prices and high interest.

So countries enter the competition for investment and jobs triggered in three ways, the first where the offers of politicians to attract investment are customized by establishing benefits to investors such as tax relief, infrastructure etc. Secondly, the investment comes in the form of an auction where the investor asks the countries to bid on the types of incentives, they are willing to offer to obtain investment, where ethics do not play an important role and finally the investment announces the way it will invest and the countries conform to that model as Sweden and Germany entered into competition to convince GM to locate production.

Currently there are more than 200 governments, central banks, customs authorities etc., in this scenario, the decisions taken would lead to significant increases in search and transaction costs as well as greater uncertainty weakening the global logistics chain. At the corporate level, companies face increased regulations and skepticism about globalization and are involved in countervailing strategies specifically linked to the reconfiguration of the global supply chain as it functions as an active lobby for the benefits it can obtain from host countries.

Taking into account existing geopolitical changes and fluctuations, global value chains can be relocated, diversified, regionalized and/or replicated. Relocation involves shortening value added and concentrating closer to home by reducing outsourcing.

Diversification builds on the strengths of value chains where companies diversify abroad and create new value chains by developing better business resilience. Regionalization assumes that value chains become more regional and concentrated in regions or groups of countries, where companies withdraw from certain regions and concentrate their value chains in specific regions. Finally, replication where companies have their production capacity geographically located close to consumer markets, implying shorter, less fragmented value chains by applying innovation strategies.

In conclusion, due to the economic setback that has COVID as a turning point and inefficient monetary and economic policies, one of the forces that counteract the setback are the global logistics chains represented by the technology and innovation of each sector. Therefore, each value chain will apply its growth strategies in the medium or short term under different scenarios and new scenarios such as the integration of the climate factor.

Reference

World Bank. (2019). DataBank. World Development Indicators. Retrieved from https://data-bank.worldbank.org/reports.aspx?source=world-development-indicators