A small factory on the outskirts of Birmingham makes the electrode that lets a car's rear-view mirror dim itself when the driver behind flashes their headlights. Ed Conway asked how many they made and was told 55% or more of the world's supply.
Spreading production across dozens of countries looks like diversification, the way owning a lot of stocks does. Conway's argument is that it produced the opposite: globalization concentrated each individual component in a single place, and almost nobody has a map of where those places are.
"In practice, no one really knows their supply chain in depth."
Conway is economics and data editor at Sky News, a columnist for The Times and the Sunday Times, and the author of Material World; his new book, Trade World, traces bread, cloth and cars through the networks that move them.
The full interview is covered here so you can skip it. 35 minutes of audio, 21 minutes of reading.
Here are the 13 insights that matter.
👤 Guest: Ed Conway, Economics and Data Editor at Sky News, a columnist for The Times and the Sunday Times and the author of Material World and Trade World
🎙️ Host: Merryn Somerset Webb, Senior Columnist at Bloomberg Opinion, who has interviewed Conway before
📰 Published: 14 September 2026 on Bloomberg Podcasts
🔴 YouTube | 🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 35 min | ✅ Time saved: 14 min
Key Takeaways
Globalization did not disperse production, it concentrated each individual part in one place
Most of the world's auto-dimming mirror electrodes come out of one small factory near Birmingham
A car has around 30,000 parts, and no chief executive can know where they all come from
Conway's phrase for what the big companies did is that they outsourced knowledge of their own supply lines
The 2011 Japanese tsunami is the cleanest natural experiment in what breaks when one obscure supplier stops
The story of the next few years is that China now makes the components better, not just cheaper
Bringing manufacturing home is not free — it means more expensive tungsten and more expensive fish fingers
Britain has "the second biggest resource of tungsten" sitting unmined in Devon
Your machine-washable "100% wool" jumper is coated in about 2% polymer, and the label may still say 100% wool
Sanctions leak because the people who connect supply to demand are relentless
He watched cars enter Russia through a relay of drivers across the Georgian border
1. Trade as a Fungal Network
Somerset Webb opened by asking Conway to skip most of the history in Trade World and start with the present, and with the image he uses to describe how production now fits together.
Her summary of the arc is a four-stage one: from everything made locally, to everything made regionally, to a world that believed it had free trade, to a world in which the whole planet is a single supply chain.
The image Conway borrows is the network of fungal threads that connects trees underground. Somerset Webb needed the term supplied; Conway gave it as "the mycorrhizal network," and granted that biologists are themselves only beginning to understand how far a tree depends on it.
He said the book is about supply chains and does not say so on the cover: "That's not in the title because I guess the publishers didn't think that was kind of sexy enough." What it is really about, in his framing, is "About why supply chains are extraordinary and why our understanding of how they actually function... is relatively primitive."
The recurring problem is that the structure only becomes visible when it breaks. "Generally speaking, we tend to realise how the world around us is structured, mostly when something goes wrong." His examples were a factory fire, the Strait of Hormuz being blocked and a ship stuck in the Suez Canal.
His reason for writing it now is that the system is under live stress and "where geography is returning." He was careful about the phrasing: "Geography never went away. Geology never went away. But we're now at this point where everyone's kind of realising, oh, hold on, this stuff actually matters."
2. One Electrode in Birmingham
The starting point for the book was a visit to a small factory, and the number he came away with is the one the whole argument rests on.
The factory, on the outskirts of Birmingham, makes little metal parts that feed the car supply chain. The one he watched being made was a tiny electrode that goes into a rear-view mirror and drives the auto-dimming function, "So if someone flashes their headlights behind you, you don't get blinded in your mirror."
He asked the obvious question and got an answer he did not expect. "And I said to the guys at the factory, how many of these are you making? And they said, we're producing 55 or more percent of the global supply." The figure is the factory's own, relayed by Conway.
That answer set the book's question: "And to some extent, the point of this book was to ask the question, how is it that we've got to the point where we have concentrated so much production for something in a single place?" The second half of the question is what happens when the network comes apart.
The scale it sits inside is a car with "30,000, if not more, parts," almost all of them sourced from other companies and assembled at the plant at the end.
His own verdict on the arrangement was double-edged. It "seems immensely dysfunctional," and yet, looked at from the bottom up rather than the top down, some of what he found had "a surprising resilience."
3. The Fish Finger's Detour
Conway's second worked example is a supermarket freezer item, and it is the one he uses to show how little a label discloses.
A fish finger sold in Britain may start with fish caught just off the coast of Scotland. "A lot of the time, that fish having been gutted in the boat that catches it, it gets flash frozen, sent to China to be processed 15,000 miles, and then sent back to here for its final stage of production to be put into a box and go to the supermarket."
The label records none of that journey: it says the fish was caught in the North Sea and packaged in the UK. Conway's point about the shopper: "And you would have no conception about this extraordinary journey that has gone on."
His statement of what the book is for came in the cold open and again in the body: "Part of the point here is to say, beneath the surface of everyday objects, and this time, you know, I'm looking at everyday objects, cars, bread, and clothes. Beneath the surface, beneath the label, there is this story that is far more fascinating, sometimes disturbing, sometimes bonkers, about where stuff actually came from."
He said that backstory is what makes current events legible — a trade war, or events in Hormuz — and that the answers cut both ways, some of them frightening and some of them showing a resilience a reader would not have expected.
4. Diversifying Into Risk
Somerset Webb pulled up a chart from page 340 of the book, and the exchange around it is where the central claim gets made.
She described it for listeners: a carmaker at the top, its tier-one suppliers beneath, tier two beneath those, and then "lots of tier three suppliers" underneath again. Conway said he drew the original himself and that it was messy enough that the publisher produced a tidied version.
Her reading of the shape: three tier ones, six tier twos on the drawing and "maybe there are loads more than that," then possibly hundreds of tier threes making the mirrors, the lights, a chip or a casing for a chip. She noted the joke that artificial intelligence now handles chart-drawing.
Conway's inversion of the investing analogy is the heart of the episode. Branching production across the world looks like diversification, "But actually, it brings in a new element of concentration, which is kind of worrying." The reason: "Yeah, because that part that goes into the rear view mirror, most of them are made in a single factory. And if that factory goes down, then you've got a problem."
The natural experiment he goes into in depth is the 2011 tsunami in Japan. Alongside Fukushima, car-parts factories nobody had heard of — making obscure electrodes and obscure types of paint — were knocked out.
His account of the realization inside the industry: "Toyota and everyone else realised, oh, hang on, this actuator we're using to make our electric windows go up and down, the majority of the world's supply comes from a single place, and that single. Place has just gone down."
Carmakers subsequently could not get the shades of paint they wanted, or all the GPS systems they wanted.
His structural claim is that cost-minimization did this deliberately, and that the second half of it is under-studied. Cheapness pushed production out of Britain and into China, "But to make it so, they increasingly come from a single factory in China, or indeed in Birmingham or somewhere else. And that is a concentration which is unnerving."
The outsourcing went further than manufacturing. "They've outsourced their stockpiling, they've outsourced inventory control, they've outsourced all these mini manufacturing bits. And, by doing that, they've outsourced responsibility at the same time, outsourced control and outsourced knowledge of their supply lines because no CEO of a big car company can understand 30,000 separate suppliers."
His plea for a research agenda is that economics should map the web before the break rather than after it: "Wouldn't it be nice to know about that stuff ex ante rather than ex post, or just to have some sniff of it?"
The bottom line he keeps returning to: "In practice, no one really knows their supply chain in depth. And whether that's reassuring or not, I don't know."
5. Offshoring's Lost History
Somerset Webb put outsourcing and offshoring among the ten most important trends of the past fifty years, and Conway agreed and then named what is missing from the record.
Her framing of the move of production to another country: "I would say that is one of the most consequential economic trends we've seen in the last half century."
Conway's list of what it produced is political, not economic. "Because if nothing else, that's what's contributed to the China shock. It's what's contributed to the rise of Donald Trump. It contributed to Brexit, the sense that all of these areas of our industrial heartland have been hollowed out and we're not making stuff anymore."
What he says has never been written is the story of how it actually happened, so he went back to the first people who did it: garment manufacturers who flew to Hong Kong and asked whether work then done in South Carolina could be done there instead. American and, to a degree, European clothing firms taught the factories in Asia to make clothes to a standard good enough to buy back cheaply.
That template then ran through the rest of the economy, into technology, "offshoring of toys, offshoring of car production."
6. China Makes the Parts Too
Conway's claim about the present is that the competitive gap is no longer only about labor cost, and that Europe's car industry is where it lands first.
He put it as an existential moment: "And here we are in 2026 talking about the car industry in, to some extent, America, but even more in Europe, facing the single biggest existential crisis it ever has because there is this wave, this tidal wave of cheap cars coming from China."
The part he thinks is underrated is capability rather than price. "It's not just that they're able to make cars cheaper than we can. It's not just that they have almost all of the battery supply chain for EVs. It's that they are also better at making tiny little components that go inside them than we are. They are better at making the car from the bottom up than we are."
The knock-on is the reason he thinks this is the biggest story coming. "It's not just the job cuts of the car makers. It's the fact that those car makers support a massive industrial base that stretches across all of those countries of good, pretty well-paying jobs. If the car companies go. Basically, most of your manufacturing sector is gone as well."
He said the effects are only starting to show: "And we're just only beginning really to see the impact of it now."
7. Who Really Makes a Car
Somerset Webb raised the finding from the book that surprised him — how many small and medium British firms make precision parts for cars and other industries — and Conway used it to attack the idea of a carmaker.
His line on the badge: "It's the carmaker. Everyone thinks of the OEMs. They think of the badge that goes on the front of the car." Earlier he had said the company whose badge is on the front "isn't really the maker of the car."
The example he chose is the seat. A distinctive Porsche or Volvo seat is not made by Porsche or Volvo: "They're made by one of three companies, for the most part. There's this kind of triopoly of companies that control the manufacture of car seats all around the world."
The small British firms making "precise little things," in Somerset Webb's phrase, are where the actual manufacturing sits — crisscrossed across the country and largely invisible.
The conclusion drawn in the exchange is that what the label says is one thing and the reality is very different, and that the gap tells you about both the vulnerabilities and the opportunities ahead.
8. Defense Before Opulence
The conversation turned to whether the West has a comparative advantage left in making things, and the frame both of them used came from Adam Smith.
Somerset Webb supplied the line, which Conway uses at the start of the book: "defense is of more importance than opulence."
Conway's gloss: "It's more important to have a secure nation than it is to have the little luxuries that come from abroad." He added the historical caveat — in Smith's day, high transport costs meant imports were luxuries rather than staples, so the trade-off looked different.
What a country loses with its factories is not only factories. "If you lose your manufacturing base, then you also effectively lose an awful lot of things. You lose your tax base. You lose your ability to do what, of course, we did in World War II, which was convert every every car manufacturing factory into a weapons factory."
His historical parallel for the current argument is the Corn Laws, which he called "the kind of Brexit of its day" — a decision about whether to grow wheat at home or buy it cheaper from abroad, usually remembered as the birth of free trade and, he argues, still live. "It was about whether security trumped economics you know and what are we living through at the moment if not exactly the same debate."
Asked whether the manufacturing base is irrecoverable, he called the question "Super dangerous. It's a really good question." Then he answered from the British case: "I mean, I think the UK is at the vanguard, you know, for better or for worse of this, because we have de-industrialized faster than anyone else and continue to." Since he wrote Material World, he said, many of the plants he visited have shut — fertilizer plants, steel plants — which he attributed partly to high energy prices and called "choice-related, policy-related," on top of a long deindustrialization curve.
9. The Tungsten Left in Devon
Conway's worked example of the trade-off between cheapness and security is a mine that has been sitting idle in the south-west of England.
The strict economic reading, in his words: "This question, this balancing act between something where if you were being an absolute kind of economic fundamentalist, you would say, it makes no sense to be mining tungsten in the UK."
The mine is not marginal. "You know, it's the second biggest resource of tungsten in the world. It has been out of action for years and years and years because it is just cheaper to buy tungsten from China."
Tungsten matters, he said, because it goes into weaponry and tools and the rest of what an industrial economy — or a response to war — needs.
The honest version of reindustrialization is that it costs money. "But that means more expensive tungsten. And it means more expensive everything that you want to produce here. It means more expensive fish fingers if you're going to get them processed here."
He connected the cheapness to wages: decades of disinflation ran alongside flat real wages in the UK, and there comes a point at which people cannot afford even the cheap goods. "You have to pay people good wages if you want them to be able to afford to buy anything."
Services are not his answer, even though he praised them. Financial, legal and building businesses keep rolling "whatever you throw at it," but "But in the end, solid economies really need to make stuff." He called it "a really unfashionable argument" and "quite a lonely argument to have," while saying people are now starting to see the logic.
On expertise versus scale, his example is the battery patent. The original patents for lithium ferrophosphate batteries — the chemistry in "pretty much every Chinese electric car these days" — were invented in the US and owned until recently by Johnson Matthey. "So it's not like we don't necessarily have the expertise in theory. What we don't necessarily have is industrial scale."
His proposed institution for that problem is a seed bank for security-relevant innovations, on the model of the Norwegian seed vaults. "But we just don't think in those terms, particularly in the UK."
He also made the historical case that tariffs built something. Without tariffs in the early 20th century, he said, "we probably would never have had a car industry" — America would have kept shipping in knocked-down Fords — and without Longbridge and Trafford Park, Britain would not have had the plant to build the planes, artillery and tanks the wars required. Modern war, he added, runs on drones and light batteries, which is "a brand new supply chain" that China dominates.
10. Cheap Transport Did It
Somerset Webb's own contribution to the diagnosis is that the politics of trade gets the credit but the shipping cost did the work.
Her argument: tariffs, GATT and most-favored-nation status all matter, "But it wouldn't work if transport wasn't so cheap."
Her illustration, from the opening of the book, is aircraft landing at obscure UK airports carrying pre-addressed packets from Shein and Temu — "so cheap to fly stuff around the world that you can now fly a five pound dress from China to the UK and have it delivered. Insane, right?"
The question she put is what happens to the underground network if that reverses, with oil a little higher than before the geopolitical difficulties — though she noted it has not risen nearly as much as people expected — and freedom of navigation under pressure for a couple of years.
Conway's answer was that it would be enormous, and that the fall in shipping costs is the least-discussed foundation of the modern economy: "In the same way that the slow, mostly invisible reduction in the cost of getting something from this side of the planet to the other is arguably an even greater kind of contributive factor to the world we live in today than the stuff that most people talk about, like tariffs going down and innovation and all the rest of it."
His list of what made it possible is containerization, bigger ships and freedom of navigation: "These are the foundation stones." They are why, in his account, essentially all of the world's wool is shipped to China to be processed.
11. Your Wool Isn't All Wool
The textile chapter produced the episode's most personal exchange, with the host interrupting to say it had changed how she thinks about her own clothes.
Somerset Webb stopped him mid-answer: "Oh God, well that's been a shock. I have to interrupt you. I had absolutely no idea about the plastic coating on my jumpers."
Conway's explanation: "Washable merino wool jumpers, when you are brushing your finger along the surface of your washable, 100% supposedly, merino wool jumper, you are actually touching plastic. And that's because they're coated with plastic in order to make them machine washable." He said it had changed his own appetite for merino.
The labelling rule is why this is legal. A garment label has to say where the final stage of production happened — where it was cut and sewn — and what fibre it is made of, and nothing else. "It doesn't tell you where the cotton was picked. It doesn't tell you where it was spun. It doesn't tell you where it was ginned. which most of the time is other countries entirely."
On the wool claim specifically: "And in the case of wool, they can say it's 100% wool because the fibre is wool and no extra fibres have been added. But there is about 2% coating of polymer on top of those follicles of wool."
His other example from the same chapter is that non-iron cotton "is actually kind of suffused with formaldehyde."
The general rule he draws: "But because the point of this is to say, the label on your clothing, the label on your packet of fish fingers, the label on your car, it tells you very little about the real story of where those things come from, what was done to them on their way to you."
Somerset Webb said she was wearing one of the jumpers as they spoke. Conway's consolation was that the polymer is why it feels the way it does: "Well, it's smoother though, Merryn. It feels great. It's got a nice sheen, and that's partly because of the plastic."
12. Sanctions and Middlemen
Asked for the optimistic version of the next 20 years for British and European manufacturing, Conway answered with a story about sanctions-busting, which he offered as hope in "a slightly perverse way."
What strikes him about how trade actually works is the durability of "this network of middlemen, I call them" — the people whose business is connecting supply to demand.
He went to the border between Russia and Georgia to test whether sanctions were working. On the statistics they were: European cars — Porsches, BMWs, Lamborghinis — had stopped going to Russia, and "All the politicians were like, this is great. Sanctions are working. They're so good."
The cars were arriving in Azerbaijan, Georgia and Kyrgyzstan instead, and from there they went on. "They're going into Russia. It's just they're going in on the sly."
He watched the relay in person, and the division of labor is the point: one person drives the car to the border, another fits the transit plates, another takes it across into Russia, another collects it on the far side.
"And what's been created there is thousands of jobs in this grey market whose entire existence is about this primal force in humankind to try to connect supply on one side of the world with demand on the other." He was explicit that in this case it works against something he supports.
The stakes claim he ends on has no historical parallel: "I think that the fungal network of trade, or whatever you want to call it, the extent to which we are all interwoven with each other means the stakes are much, much, much greater than in any other point in history. There isn't really a precedent for having a world economy arranged in this way."
His hope is that trade barriers teach their own lesson — that when they fail to work as intended, it is because the system is "far more resilient than you might have thought." His image for what happens next: "And that new strands, new webs kind of grow up and sprout up when you try and sunder another one."
Somerset Webb closed the thread back on Smith: bartering and trading is one of the things that makes us human, "And as long as we need to do it, we'll just keep finding a way to do it." Conway agreed.
13. What to Study Now
Somerset Webb's last question was what all the factory visits had taught him about what his own children should study at university.
Before asking it she made an aside for the audience: all of this is good news for small-cap investors, because the more attention the hidden suppliers get, the more of them there are to go and find.
Conway's answer starts from artificial intelligence and lands on pastry. "There's a lot of people right now making a lot of money through crafting beautiful bits of patisserie and selling it covered in sugar."
The generalization: "So I think that having some sort of a skill that is artisan and human and is immediate... is probably going to be a safer bet than most other careers at the moment."
He called it "a kind of enlivening time" because everyone is now asking what it is they actually do, and said that is a good thing even though the fear is real.
His closing note was on why he expects demand to persist: "But I think we are attuned to interact... And to come up with new crazy ideas and products to sell each other. And long may it continue because there won't be a shortage of that in the future."
Bonus Insights
Conway said the research was among the most enjoyable he has done: "And it's been one of the most fascinating kind of journeys, sets of rabbit holes I've ever gone down."
Somerset Webb teased him that the bakery chapter was obviously his favorite. He did not deny it: "It was very important for me, Merryn. To go to Paris and to sample all. Of the delights."
The chart on page 340 is Conway's own drawing, tidied up by the publisher — a detail that says something about how little standard data exists on the shape of a supply chain.
Conway's argument for why he rooted a global book in the British story: "if there's any country in the world that has gone gangbusters for both free trade and de-industrialisation, and let's just focus on cheap things, it is Britain."
On carbon dioxide, he gave the example of a fertilizer plant shutting down and the chain of consequences that followed — the country discovering that pigs could not be slaughtered and fizzy drinks could not be made, because that plant was where the carbon dioxide came from.
Conway's bottom line is that the world economy is not a chain but a web nobody has mapped, that decades of chasing cheapness concentrated each strand of it in a single place rather than spreading the risk, and that the countries now trying to reverse that will find the security is real and so is the higher price.
Products, Companies & Tools Mentioned
Toyota (Named as one of the carmakers that discovered after the 2011 tsunami that the world's supply of an electric-window actuator came from a single site)
Porsche and Volvo (His example of badges on seats that neither company makes — the seats come from one of three suppliers worldwide)
Shein and Temu (Somerset Webb's illustration of how cheap air freight has become: pre-addressed packets landing at obscure UK airports)
Johnson Matthey (Held the patents until recently for the lithium ferrophosphate battery chemistry that dominates Chinese electric cars — Conway's evidence that the West has the expertise but not the scale)
Ford (His counterfactual for British tariffs: without them, America would have kept shipping knocked-down Fords and Britain would have had no car industry)
Sky News (Where Conway is economics and data editor)
The Times (Where he writes a column, alongside the Sunday Times)
Books & Resources Mentioned
Trade World – Ed Conway (The new book the interview is about: a history of trade told through bread, cloth and cars, with the tier-supplier chart on page 340)
Material World – Ed Conway (His previous book, which he calls a companion piece; several of the plants he visited for it have since closed)
The Wealth of Nations – Adam Smith (The source of "defense is of more importance than opulence," the line Conway puts at the front of the book)
The Corn Laws (His parallel for the current argument — a fight over whether to grow wheat at home or buy it cheaper abroad, which he calls the Brexit of its day)
The Svalbard Global Seed Vault (His model for what a country ought to do with security-relevant industrial know-how it is not currently using)
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