DHL Global Connectedness Index: Globalisation hits new record high

Posted on 20/02/2019 by DHL Express 0 comments

The fifth edition of the DHL Global Connectedness Index (GCI) was released on 12 February, detailing globalisation measured by international flows of trade, capital, information and people.

The latest report is the first comprehensive assessment of globalisation developments across 169 countries and territories since the decision for Britain to leave the European Union and the 2016 presidential election in the United States.

Connectedness reached an all-time high in 2017 as trade, capital, information and people flow across national borders intensified significantly for the first time since 2017. While key policy changes such as US tariff increases have not yet been implemented, strong economic growth has boosted international flows.

CEO of DHL Express, John Pearson, spoke about the untapped potential around the world. “The GCI shows that currently, most of the movements and exchanges we’re seeing are domestic rather than international, yet we know that globalisation is a decisive factor in growth and prosperity.”

While GCI co-author and Senior Research Scholar at the NYU Stern School of Business and Executive Director of NYU Stern’s Centre for the Globalization of Education and Management, Steven A. Altman, commented on the importance of not overestimating globalisation, even after its recent gains. “This is important because, when people overestimate international flows, they tend to worry more about them. The facts in our report can help calm such fears and focus attention on real solutions to societal concerns about globalisation.”

Top ten take-aways of GCI

  1. For the first time since 2007, the shares of trade, capital, information and people flow crossing national borders have increased significantly.
  2. The Netherlands is the world’s most connected country. Singapore leads in terms of international flows relative to domestic activity, while the UK has the most distribution of flows around the world.
  3. Europe is the world’s most globally connected region and leads on trade and people flows. North America is the top region for information and capital flows.
  4. Cambodia, Malaysia, Mozambique, Singapore and Vietnam are the economies that exceed expectations of international flows the most.
  5. Emerging economies have much lower average levels of connectedness than advanced economies. The largest gap is found in information flows, into which advanced economies are 9 times as deeply integrated.
  6. Most people believe the world to be more globalised than it really is which causes more fears. The flows most likely to take place within or between countries are domestic rather than international.
  7. Global connectedness is still constrained by distance and cross-country differences.
  8. Countries that integrate more deeply into international flows tend to enjoy faster economic growth. Even top-ranked countries have untapped opportunities to strengthen their global opportunities.
  9. The policy environment for globalisation darkened in 2018 as a result of trade conflicts escalated and raised barriers to immigration and other flows. However, supporters of open markets have fought back with a wave of landmark trade agreements.
  10. The future of globalisation depends on the choices of policymakers around the world. Countries have more flexibility to shape their international flows and the distribution of their benefits than many would presume.

Click here to explore the full DHL Global Connectedness Index.

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