More Details on Globalization Study

The misgivings some political leaders have about increasing global integration are misplaced, says study

By ·

The Global Connectedness Index (GCI), a study released by DHL last week indicates that globalization is still not as advanced as most people believe.

The DHL Global Connectedness Index 2011 examines data on 10 different types of international flows, covering the categories of trade, capital, information and people, over the years from 2005 to 2010. Unlike existing indices, the GCI analyzes not only the depth of countries’ cross-border interactions but also their geographic breadth – distinguishing countries that are truly connected across the globe from those with deep ties only to a small set of partner countries. Additionally, it is based exclusively on hard quantitative data.

The 2011 GCI found that the 10 most connected countries are the Netherlands, Singapore, Ireland, Switzerland, Luxembourg, the United Kingdom, Sweden, Belgium, Hong Kong (China) and Malta. The diversity of the leading countries is even greater in the top 50 list, which includes representatives from all six continents. These patterns indicate that the benefits of connectedness are accessible to a broad range of countries, not just trading hubs that lead many other globalization indices.

??“The positive impact of global connectedness on world prosperity will continue to be of great importance. The misgivings some political leaders have about increasing global integration are misplaced; its benefits far outweigh the potential downsides,” said Ghemawat.?? Key takeaways from the index include:?

?• The actual level of connectedness today is much lower than commonly believed; its potential for positive growth, therefore, is significant.??

• The Netherlands ranks No. 1 in terms of overall connectedness, Hong Kong scores the highest regarding the depth of its international connections, and the United Kingdom tops the list for the breadth of its connections.?

?• Despite increasing its trade interaction in recent years, the United States ranks No. 25 overall. The United States is a leader in term of breadth (#3), but as is expected for a country with a very large internal market, it lags on depth (#84).??

• The lion’s share of international connections are still concentrated among countries that share borders (such as in Northern Europe) as well as cultural and historical ties, which indicates that much of today’s globalization is actually regionalization.??

• Larger countries score higher on the global breadth of their connections; smaller countries excel in the depth of their connectedness.??

• Countries that pursue public policies that directly encourage greater international flows, as well as policies that improve the domestic business environment, can enhance their global connectedness.

Georg Schaur, assistant professor of economics, The University of Tennessee told SCMR that if national initiatives shorten transit times, exporters and importers to benefit, because trade times decrease for both.

“Firms like short response times to smooth uncertainty,” he said. “The bottom line is that firms like short response times for many reasons other than just capital cost savings of short delivery times.”

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Warehouse Management Systems (WMS) / Inventory Management Technology: 6 Trends for the Modern Age
Here’s how the next generation of warehouse and inventory management systems are evolving to help logistics operations operate more efficiently and improve their bottom lines in our brave, new digital age.
Download Today!
From the March 2018 Logistics Management Magazine Issue
We know e-commerce is reshaping logistics, but what are the technologies savvy managers can leverage to meet evolving requirements and shifting operational constraints? We’ve rounded up insights from leading analysts to share tools that are available now as well as what’s on the horizon.
Reverse Logistics in the “Age of Entitlement”
Logistics Management’s Viewpoint on E-commerce: Leveraging available tools
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Securing IoT data across the connected supply chain
Learn why a holistic approach to IAM is the most effective way to govern access to your systems and information requested by your partners, vendors, customers, and connected devices.
Register Today!
Evolution of E-commerce: The possibilities of tomorrow
We know e-commerce is reshaping logistics, but what are the technologies savvy managers can leverage...
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...

2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...
Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...