Selective Disentanglement: What Fractures vs. What Keeps Flowing
China's share of US mobile phone imports dropped from 65% to 20% since 2000. India is now the largest supplier as Apple shifted iPhone production. This is fracturing by design – security-driven, not cost-driven. But toys, furniture, and clothing? They'll keep flowing.
Key Components
The Strategic vs. Non-Strategic Divide
Shearing's core prediction: fracturing will be confined to strategically important areas – anything affecting supply chain — as explored in how AI is restructuring the…
The Mobile Phone Case Study
The smartphone shift illustrates the mechanism perfectly. Mobile phones are "essentially computers in our pockets" with massive data and security implications.
Implications for Business
The critical question: Are you operating in a sector that could be perceived as geostrategically important? This breaks into two sub-questions: Are you in a strategic sector?…
Key Takeaway
As the AI Value Chain shows, the implications for a toy manufacturer are "somewhat different" from chips or biotech. Know where you sit on the strategic spectrum.
Real-World Examples
AppleTarget
Key Insight
As the AI Value Chain shows, the implications for a toy manufacturer are "somewhat different" from chips or biotech. Know where you sit on the strategic spectrum.
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FourWeekMBA x Business Engineer | Updated 2026
China’s share of US mobile phone imports dropped from 65% to 20% since 2000. India is now the largest supplier as Apple shifted iPhone production. This is fracturing by design – security-driven, not cost-driven. But toys, furniture, and clothing? They’ll keep flowing.
The Strategic vs. Non-Strategic Divide
Shearing’s core prediction: fracturing will be confined to strategically important areas – anything affecting supply chain — as explored in how AI is restructuring the traditional value chain — security, national security, or global technological leadership.
WILL FRACTURE (Bloc-sourced or reshored):
– Chips, semiconductor — as explored in the economics of AI compute infrastructure — s, AI
– Batteries, EVs, green tech
– Biotech, pharmaceuticals
– Dual-use goods (drones)
– Telecommunications equipment
– Critical minerals, rare earths
The smartphone shift illustrates the mechanism perfectly. Mobile phones are “essentially computers in our pockets” with massive data and security implications. Apple made the strategic decision to shift production of the latest iPhone out of China into India.
This wasn’t about labor costs – it was about reducing single points of failure in a strategically important sector. The fracturing is sector-specific, not universal.
Implications for Business
The critical question: Are you operating in a sector that could be perceived as geostrategically important? This breaks into two sub-questions: Are you in a strategic sector? Are you using geostrategically important inputs?
Key Takeaway
As the AI Value Chain shows, the implications for a toy manufacturer are “somewhat different” from chips or biotech. Know where you sit on the strategic spectrum.
What is Selective Disentanglement: What Fractures vs. What Keeps Flowing?
China's share of US mobile phone imports dropped from 65% to 20% since 2000. India is now the largest supplier as Apple shifted iPhone production. This is fracturing by design – security-driven, not cost-driven. But toys, furniture, and clothing? They'll keep flowing.
What is the strategic vs. non-strategic divide?
Shearing's core prediction: fracturing will be confined to strategically important areas – anything affecting supply chain — as explored in how AI is restructuring the traditional value chain — security, national security, or global technological leadership.
What is the mobile phone case study?
The smartphone shift illustrates the mechanism perfectly. Mobile phones are "essentially computers in our pockets" with massive data and security implications. Apple made the strategic decision to shift production of the latest iPhone out of China into India.
The critical question: Are you operating in a sector that could be perceived as geostrategically important? This breaks into two sub-questions: Are you in a strategic sector? Are you using geostrategically important inputs?
What are the key takeaway?
As the AI Value Chain shows, the implications for a toy manufacturer are "somewhat different" from chips or biotech. Know where you sit on the strategic spectrum.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
