Overview of the U.S. production network
- Learn about the concept of upstreamness in production networks
- Visualize and explore the upstreamness of different U.S. industries
3. Upstreamness in Production Networks
At the end of the previous section, we saw that some industries, like state and local government, only sell to final consumers and not to other industries. We can think of these industries as being the most "downstream" in the network, in the sense that if we keep tracing the arrows in the visualization, we can't go further down than these industries. There are other industries, like nursing and residential care facilities, that both sell to final consumers and to a certain number of very downstream industries (like state and local government). These industries are still relatively downstream in the overall production network, though they are further upstream than those at the lowest point.
Using this type of reasoning, we can assign an "upstreamness" value to each industry, where industries that are the least upstream (i.e., most downstream) receive a value of one, and all other industries receive a value greater than one proportional to how upstream they are. Below is a beeswarm visualization that illustrates each industry's upstreamness based on the same data used in the previous section.
Specifically, for this visualization, we use an upstreamness definition based on Antràs et al. (2012), which yields upstreamness values for the 71 industries in 2015 ranging from one (most downstream) to 4.5 (most upstream). The most upstream industry is support activities for mining, while there are several industries tied for most downstream, including "hospitals," "housing," "food and beverage stores," and "state and local government."
Hover over an industry to see more information, and click on an industry to change which one is in focus. As with the visualization in the previous section, industries colored orange are suppliers to the focus industry, while industries colored green are customers of the focus industry. Industries colored purple are both suppliers to and customers of the focus industry.
As we would expect, the least upstream industries tend to be those that sell goods and services that consumers buy directly, such as healthcare, recreation, motor vehicles, and retail stores. Upstream industries tend to be those that produce goods and services at the "beginning" of many supply chains and, in some cases, rely directly on the natural environment. These industries include mining, wood products, and primary metals.
The beeswarm visualization also reveals that all industries have connections throughout the production network. This is true even of the most upstream industries, which have suppliers that—according to the upstreamness definition we're using here— are actually downstream of them in the network. This observation emphasizes the fact that economic production networks do not contain simple chains of inputs-to-outputs that continue in a single direction; there are many loops and cycles throughout the network that create complex relationships among all of the industries in the economy.
The visualization below combines the network visualization from the previous section with the beeswarm visualization above. Clicking on either of the visualizations will update the focus industry in the other visualization. Before continuing, feel free to use this visualization to explore the U.S. production network in more detail.
The final section will wrap up what we've discussed regarding production networks and will highlight some additional content to be added a future time.