Politics Home | Crisis after crisis: why supply chain resilience is a matter of national preparedness

Recent developments in the Middle East, particularly the escalation involving Iran and its implications for global energy markets and the Strait of Hormuz, have once again brought supply chain resilience into sharp focus. In an uncertain world, supply chain resilience is a question of national preparedness – and this should be reflected in our industrial policy beyond any immediate response to address the impacts of the crisis.   

As the Chancellor highlighted in her Mais lecture, we need to pursue growth that is both secure and resilient, and this means “attend[ing] to the strength of our supply chains, and tak[ing] an active interest in where things are made, and who makes them”.  

But in many ways, this is not a new issue. Businesses have been grappling with increased supply chain risk since the Covid-19 pandemic, which was followed by successive geopolitical shocks – on top of the disruption after the UK’s exit from the European Union.   

A recent report by the Society of Chemical Industry (SCI) and the National Preparedness Commission sets out the scale of the challenge starkly. It concludes that the UK’s industrial base is increasingly vulnerable, with a heavy reliance on imports for materials and products essential to daily life – including energy, healthcare, food production and communications. The report warns that if imports are disrupted by conflict, trade restrictions or infrastructure failure, key industries could struggle to function, with potentially severe economic and societal consequences.  

So, to quote the Chancellor once more, how do we avoid “excuses to put off the hard work of reform” and ”focus on the causes, as well as the symptoms, of our vulnerabilities”? 

Foundational sectors as the backbone of resilience 

At the heart of supply chain resilience are the UK’s foundational industries: the sectors that provide the basic inputs on which much of the wider economy depends. Chemicals are a clear example. Used in the vast majority of manufactured products and critically important to advanced manufacturing, defence and life sciences, disruption in chemical supply chains cascades rapidly across sectors such as construction, automotive, healthcare, agriculture and nutrition. 

The SCI report reinforces this point, highlighting the long-term erosion of end-to-end manufacturing capability in the UK. Over time, this hollowing out of industrial capacity has increased dependence on complex international supply chains for critical inputs.  

Strengthening supply chain resilience, therefore, starts with recognising the strategic importance of foundational sectors and acting on it. 

Onshoring where innovation provides an advantage 

One part of the solution lies in onshoring – a targeted effort to rebuild domestic capability where the UK has, or can develop, a competitive advantage. Innovation is central to this approach. Advanced manufacturing processes, digitalisation and sustainable production methods can enable high-value industrial activity to take place in the UK, even in sectors that are traditionally energy and resource-intensive. 

BASF believes that innovation can help decouple growth from resource consumption, improving efficiency while strengthening resilience across the value chain. By investing in new technologies and processes, it is possible to support domestic production of critical inputs in a way that aligns with the UK’s net-zero ambitions and delivers on growth. This is the focus of our R&D in the UK through the British Alliance for Research and Innovation, centred around our partnership with Imperial College London.  

Resilience and sustainability are increasingly intertwined. Policies that support innovation-led onshoring can help address both challenges simultaneously. The UK is already supporting research into advanced manufacturing methods for the chemicals sector. What is now needed is a clear and credible pathway to deploy these technologies at scale, enabling domestic production of future-proof solutions that support growth, resilience and net-zero. Companies such as BASF, working with partners, have practical experience of the barriers that currently limit deployment, as well as insight into the wider policy framework needed to accelerate it. 

Friendshoring with trusted partners 

And while a strategy for onshoring production in specific areas would aim to enhance the UK’s competitiveness, it would be impossible for those efforts alone to deliver resilience. Modern supply chains will remain international, particularly for industries such as chemicals with complex, multistage value chains.  

This is where “friendshoring” – deepening supply chain integration with close allies where economic, regulatory and political ties are already strong – offers a pragmatic complement to domestic capability building.  

This is particularly relevant for the UK’s relationship with the EU. Recent data shows increasing UK reliance on chemical imports from the EU, underlining the importance of smooth trading arrangements and regulatory alignment. A reset in the UK‑EU relationship, coupled with a renewed government commitment to reducing friction and duplication, would support both competitiveness and resilience across manufacturing supply chains. 

A strategic priority for policymakers 

Supply chain resilience is no longer a niche industrial issue. It is a matter of economic security, national preparedness and long-term competitiveness. By strengthening foundational sectors, supporting innovation-led onshoring, deepening partnerships with trusted allies and ensuring regulation supports investment, the UK can build supply chains that are better equipped to weather future crises and deliver on sustainable, secure and resilient growth.