DHL and that New York University Stern School of Business have presented the Global Connectivity Report 2024, the most comprehensive analysis available on the status and course of globalization. It tracks how the flows of trade, capital, information and people move around the world and measures the globalization of 181 countries and territories.
The study shows that globalization reached an all-time high in 2022 and remained near that level throughout 2023, despite a series of global shocks over the last decade such as the Covid-19 pandemic, the wars in Ukraine and Gaza, and the trade conflict between the two countries the USA and China and the withdrawal of the United Kingdom from the European Union. The report data that can be downloaded in full here, categorically refute the idea that the growth of global flows has reversed. The growth of trade played a crucial role in promoting global connectivity. The share of world production traded internationally hit another record high in 2022 and after a slowdown in 2023, trade growth is expected to accelerate in 2024.
According to the study, globalization of information flows has been particularly strong over the past two decades, although recent data shows stagnation in its growth, due in part to reduced research cooperation between the United States and China. The globalization of the economy is increasing, companies are expanding their international presence and generating more sales abroad. As John Pearson explains, CEO of DHL Express«The latest findings from the DHL Global Connectedness Report clearly refute the idea that globalization is taking a U-turn. Globalization is not just a buzzword, but an influential force has profoundly changed our world and still has great potential. Expanding markets and fostering opportunity enable individuals, companies, and entire nations to thrive in unique ways. Embracing globalization allows us and our customers to shape a bright future and foster a world that is increasingly connected, more prosperous for all and poised for greater growth.«.
The report confirms significant potential for further increases in global flows. On a scale of 0 to 100%, the current level of globalization of the world is only 25%, with at the lower level no electricity crossing national borders and at the higher level, borders and distances are not a handicap absolutely.
Singapore is at the top of the list of the most globalized countries, followed by the Netherlands and Ireland
Singapore achieved first place in the ranking this year. The Netherlands and Ireland are in second and third place. 143 countries became more connected globally, while only 38 countries experienced a decline in connectivity. Other data in the report shows that Europe is the most globally connected region in the world, followed by North America, the Middle East and North Africa.
«Singapore has invested heavily in strengthening its physical and digital connectivity with the world because trade is our lifeblood. We continue to improve our connectivity and trade links to remain an important and trusted hub in global supply chains, facilitating international trade and the flow of capital, information and talent. We look forward to working with international companies seeking a starting point for business growth and supply chain expansion in Asia Pacific and beyond.“, has explained Ih-Ming Chan, Executive Vice President of the Singapore Economic Development Board.
The situation in Spain has improved since 2009
This year’s DHL Global Connectivity Report places Spain 31st out of 181 economies based on 2022 data. Its ranking has increased by 4 places since 2017. Spain’s global score, which measures the absolute level of connectivity, has increased by 2.1 points over the last five years (on a scale of 0 to 100). Since 2021, Spain has fallen one place in the ranking due to the inclusion of a larger number of analyzed countries, but its score has increased by 1.4 points.
For a country to be globally connected, it must have both large international flows relative to the size of its economy (what we call “depth”) and international flows that are globally distributed and not narrowly focused (what we call “breadth”). . . Spain ranks 61st in depth (22 places more than 2017) and 20th in breadth (no changes compared to 2017).
The DHL Global Connectivity Report consists of four “pillars” that measure the depth and breadth of trade, capital, information and people flows. In this edition, Spain ranks 47th in the trade column (out of 181 countries), 23rd in the capital column (out of 159 countries), 23rd in the information column (out of 161 countries) and 37th in the Person column (of 114). Countries).
In terms of expanding international relations, Spain’s global connectivity has been on an upward trend since 2009. It fell during the Covid-19 pandemic, but recovered quickly and was well above pre-pandemic levels. The huge increase in connectivity in Spain in 2022 was driven by trade, foreign direct investment (FDI) and the recovery of tourism after the Covid epidemic. In 2022, for the first time, Spain’s level of global connectivity was slightly above the level forecast based on its structural characteristics, such as GDP per personPopulation and proximity to international markets.
Relations between the US and China are weakening
DHL’s latest Global Connectivity Report also shows that relations between the United States and China continue to weaken, with the share of flows from both countries affecting each other falling by about a quarter since 2016. However, both countries remain strongly connected and have larger flows than almost any other pair of countries.
In addition, Russia and Europe have decoupled, resulting in Russia facing an unprecedented decline in connectivity, more than double the previous decline in the world’s 20 largest economies. At the same time, data analysis shows that there is no broader divide in the global economy between rival geopolitical blocs.
Globalization has not given way to regionalization
The report shows that predictions of a global evolution from globalization to regionalization are not borne out – at least for the moment – in the patterns of international flows. In fact, most international flows occur over stable or even greater distances, with an increasingly smaller proportion occurring within large geographical regions. In the area of trade, only in North America is there a clear shift towards more regionalized trading models.
«Deglobalization remains only a risk, it is not a current reality. Geopolitical threats and changes in public policy have led many to predict a disintegration of the global economy along geographical or geopolitical lines, or even a retreat from international to domestic business. However, the latest data continues to show that international flows are increasing and that very few countries are cutting ties with their traditional partners. It is important to recognize the resilience of global flows because a biased focus on the threats of globalization could make deglobalization a self-fulfilling prophecy.“, It says Steven Altman Senior Research Scientist and Director of the DHL Initiative on Globalization at the Center for the Future of Management at NYU Stern.