What's Happening?
A new framework for constructing an enterprise-level global supply chain database, known as EMRIO, has been developed to provide a more granular view of economic interactions at the company level. This
framework disaggregates sector-level multi-regional input-output (MRIO) tables into company, segment, and subsegment levels using diverse data sources such as corporate financial reports, business-to-business transactions, and public customs records. The process involves three primary phases: data collection, data processing, and disaggregation and concatenation. The EMRIO aims to map companies to multifaceted industry classifications, offering a detailed perspective on global economic dynamics and supply chains.
Why It's Important?
The development of the EMRIO framework is significant as it addresses the limitations of traditional sector-level MRIO models, which often lack the granularity needed for applied use in understanding global economic interactions. By providing detailed insights into company-level transactions, the EMRIO enhances the analysis of supply chains, including Scope 3 emissions, which are crucial for sustainability assessments. This advancement could impact industries by offering more precise data for decision-making, potentially leading to more efficient supply chain management and better environmental practices. Stakeholders such as policymakers, businesses, and environmental groups stand to benefit from the improved transparency and accuracy in economic data.
What's Next?
The next steps involve further refining the EMRIO framework to enhance its robustness and reliability. This includes conducting sensitivity analyses to assess the model's resilience to data omissions and exploring ways to improve data reliability at the firm level. Future work will focus on expanding the database's coverage and integrating additional data sources to provide a more comprehensive view of global economic interactions. As the framework evolves, it is expected to play a critical role in shaping policies and strategies related to global trade, environmental sustainability, and economic development.
Beyond the Headlines
The EMRIO framework not only provides a detailed view of economic interactions but also highlights the complexity of global supply chains and the interdependencies between companies and industries. This complexity underscores the need for collaborative efforts among businesses, governments, and international organizations to address challenges such as climate change and economic inequality. By offering a more nuanced understanding of these interactions, the EMRIO could facilitate more informed discussions and decisions on global economic policies and sustainability initiatives.
