Taking the Step towards a More Dynamic View on Raw Material Criticality: An Indicator Based Analysis for Germany and Japan

Abstract

Due to mounting concerns about the security of raw material supplies, numerous studies dealing with the quantification of supply risks and material criticality at the national level have been carried out in previous years. Regarding these studies, most approaches are indicator based static screening methods analyzing large numbers of raw materials and identifying those which are most critical for an economy. The majority of these screening methods quantify supply risks and vulnerabilities for one base year without taking into account temporal changes. Dynamic approaches for specific raw materials analyzing affected value chains in detail have been introduced recently; however, these studies do not intend to provide a screening of larger numbers of commodities. In this paper, we present a simple dynamic screening approach to assess raw material criticality at the country level building upon methods from innovation economics. The indicators applied in this study are only based on broadly available production and trade data, which makes this approach relatively easy to apply. We test our methodology on the example of Germany and Japan—two economies with highly specialized industries and low domestic raw material deposits, and, hence, high import dependency. The results are comparable to those of previously conducted multi indicator based static screening methods. However, they provide additional insight into temporal developments over the previous decade.

Keywords

• raw material criticality
• supply risk
• vulnerability
• critical raw materials
• trade data analysis