For the past week, I’ve been asked at least once a day (yesterday I was asked several times, with an R0 of 3) about what I think the coronavirus’ impact will be on the global supply chain.
I have a perspective that it’s too early to really know but there are starting to be guidelines about how to think about it, especially as Chinese new year + a week has passed (and we are almost at +2 weeks). Theoretically, factories in China are opening next week, but until they open, they aren’t open …
While there is starting to be some macro analysis on the web, it’s classic generic stuff with big company examples such as Charting the Global Economic Impact of the Coronavirus, Coronavirus shakes centre of world’s tech supply chain, and How China’s novel coronavirus outbreak is disrupting the global supply chain.
I find things like the Johns Hopkins CSSE data set and coronavirus map to be much more interesting than these articles so I sent an email out to our hardware companies last night to see what they were hearing and thinking to collect some quantitative data from startups.
It seems like most people are expecting factories to open on 2/10 as planned. However, the expectation is being set that production will take two weeks to ramp back up to normal. And, there is some concern that larger companies will likely exert pressure to be at the front of the line.
Another problem at this point is movement into and out of China. The Chinese border with Hong Kong is only open at a few places and many are afraid to enter China right now for fear that they won’t be able to leave.
Everyone anticipates a big logistics clog once things start shipping, which will introduce delay and cost, although the magnitude of this is unknown.
Finally, the downstream (or upstream – I never get that right) impact of long lead time items will add another wrinkle once people understand the volume and timing constraints when things settle down.
Of course, the coronavirus is not yet contained and the actual shape of the infection and death curve is still evolving, but at this moment it is clearly worse than SARS, so that doesn’t feel very good.
If you have any additional qualitative data or perspective, I’d love to hear it.
The Red Web: The Struggle Between Russia’s Digital Dictators and the New Online Revolutionaries was one of two books I read this weekend (the other was Brain on Fire: My Month of Madness).
It was outstanding. I made it the August book club book for my dad and my brother. And then, this morning, I woke up to the following headlines.
- Putin bans VPNs to stop Russians accessing prohibited websites
- Apple Removes Apps That Allowed China Users to Get Around Filters
This shouldn’t be a surprise to anyone who is paying attention. There is now a long history of governments trying to control the Internet. One approach over government is censoring the Internet; another is weaponizing it.
The Red Web covers Russia’s history around the Internet starting during the Cold War with a focus on the last twenty years. While Russia had a slow start, the Internet played a big part in both sides of things – the increasingly free flow of information combined with government control over information.
I believe we are at the very beginning of a new version of this battle. Since the beginning of humans, information – and the control of information – has been one of the key dynamics of power. At least we don’t need to use ravens anymore. But, depending on which country you are in, they might be a good backup plan.