**Introduction** Industry concentration affects supply chain resilience by shaping how disruptions propagate through global trade. When production, processing, or critical inputs are dominated by a small number of firms or locations, supply chains tend to be efficient under stable conditions but more vulnerable to shocks. Concentration increases the risk that localized disruptions or policy interventions translate into broader supply interruptions, while diversification generally improves resilience at the cost of higher complexity and expense[1]. **How industry concentration affects supply chain resilience** **1.** **Greater exposure to supply chain disruptions** Highly concentrated supply chains are more exposed to disruption because shocks affecting dominant suppliers or hubs can have economy-wide effects. When alternative sources are limited, disruptions are more likely to result in shortages, production delays, and price volatility rather than being absorbed through substitution. Greater concentration is associated with larger and more persistent supply interruptions following shocks[1][2]. **2.** **Sensitivity** **to trade and regulatory measures** Industry concentration increases exposure to trade and regulatory shocks. When supply is concentrated, measures such as export controls, sanctions, licensing requirements, and subsidies have larger effects because firms have limited short-run alternatives. This risk is particularly relevant in clean energy, advanced manufacturing, and technology-intensive sectors, where production and processing capacity is highly clustered[1][3]. **3.** **Diversification improves resilience but involves trade-offs** Reducing concentration through supplier diversification, regional diversification, and redundancy generally improves resilience by lowering reliance on single sources. However, these strategies often involve higher costs, capacity duplication, and reduced efficiency compared with highly concentrated sourcing. In practice, firms and governments are increasingly accepting these costs to reduce exposure to severe disruptions[2][4]. **Conclusion** Industry concentration creates a clear trade-off between efficiency and supply chain resilience. Concentrated supply chains support scale and cost efficiency but increase vulnerability to disruptions and policy shocks. Greater resilience is achieved by managing concentration risks through diversification and redundancy, even where this raises costs.
