CSCMP's Supply Chain Quarterly
March 23, 2019
Forward Thinking

Globalization hits new high

Comment
International flows of trade, capital, information and people intensifies, according to DHL Global Connectedness Index.

Globalization hit an all-time high in 2017, according to the most recent DHL Global Connectedness Index, released this month.

The transportation and logistics giant said its most recent CGI report reveals globalization trends across 169 countries and territories since the Brexit referendum in the United Kingdom and the 2016 presidential election in the United States. The report authors said that despite anti-globalization tensions in many parts of the world, global connectedness reached a record high in 2017, as the flows of trade, capital, information and people across national borders intensified greatly for the first time since 2007. They said strong economic growth boosted international flows while key policy changes such as U.S. tariff increases had not yet been implemented.

"Increasing international cooperation continues to contribute to stability, so companies and countries that embrace globalization benefit tremendously," John Pearson, CEO of DHL Express, said in a statement announcing the new report.

DHL's newest index measures the state of globalization, as well as individual rankings for each country, based on the depth (intensity of international flows) and breadth (geographical distribution of flows) of countries' international connections. The world's top five most globally connected countries in 2017 were the Netherlands, Singapore, Switzerland, Belgium and the United Arab Emirates. Eight of the top 10 most connected countries are located in Europe, helping make it the world's most connected region, in particular for trade and people flows, the report showed. North America, the leader in capital and information flows, ranked second among world regions, followed by the Middle East and North Africa in third place, the authors said.

Despite the gains, the study authors also said that the world remains less connected than most people think. The GCI shows that just about 20 percent of economic output around the world is exported, roughly 7 percent of phone call minutes (including calls over the internet) are international, and just 3 percent of people live outside the countries where they were born.

The GCI also showed that emerging economies remain less connected than advanced economies, and that Southeast Asian nations beat connectedness expectations. The report's authors said that the five countries where international flows exceed expectations the most are Cambodia, Malaysia, Mozambique, Singapore and Vietnam, four of which are located in Southeast Asia.

"Southeast Asian countries benefit from linkages with wider Asian supply chain networks as well as ASEAN policy initiatives promoting economic integration," the authors said. "This is positive news for the region, because deeper global connectedness can help accelerate countries' economic growth."

The 2018 DHL Global Connectedness Index was commissioned by DHL and writen by Steven A. Altman, Pankaj Ghemawat and Phillip Bastian of the New York University Stern School of Business and the IESE Business School. It draws on more than three million data points from international flows covering trade, capital, information and people, according to DHL.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter : Globalization hits new high"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.