Globalization is more fragile and less entrenched than you think!

I was shocked that the statistics I came across in a recent article in The Economist which presented Pankaj Ghemawat’s research on globalization.

We seem to take it as a given that we live in a globalized world, but on many indicators global integration is far from complete:

  • Only 2% of students are at universities outside of their home countries
  • Only 3% of people live outside their country of birth
  • Only 7% of rice is traded across borders
  • Only 7% of directors at S&P 500 companies are foreigners
  • A few years ago less than 1% of all American companies had any foreign operations
  • Exports only represent 20% of global GDP
  • Air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels
  • Foreign direct investment (FDI) accounts for only 9% of all fixed investment
  • Less than 20% of venture capital is deployed outside a fund’s home country
  • Only 20% of shares traded on stock markets are owned by foreign companies
  • Less than 20% of Internet traffic crosses national borders

More worryingly globalization seems reversible. Emigration levels today pale with those 100 years ago when 14% of Irish-born people and 10% of native Norwegians had emigrated. Back then you did not need visas. Today the world spends $88 billion a year on processing travel documents and in a tenth of the world’s countries a passport costs more than a tenth of the average annual income. Nearly a quarter of North American companies shortened their supply chains in 2008. It takes three times as long to process a lorry-load of goods crossing the Canadian-American border as it did before September 11th 2001. Even the internet is succumbing to this pattern of regionalization, as governments impose a patchwork of local restrictions on content.

Read the full article at: http://www.economist.com/node/18584204?story_id=18584204

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  • Have you ever thought what when (not if) making planes fly will cost a fortune because of shortage of kerozene?
    And what else than world’s trade collapse if as a war’s collateral damage, a few thousands ships from Maersk and CMA-CGM are sinked…
    Not many people know the high concentration/cartel you speak about and that it is a few thousands European ships that carry around international goods all over the oirld…
    Now this being said I dare to hope in Western countries at least that 90% of economic or politic decision makers have international profiles..
    Sarkozy’s English is not the best example, nor the amazingly stupid reward made to Christine Lagarde as ministry of Finance while saying her English was so good… at this level shouldn’t we rather expect that being a minimum requirement?..

  • I’m sorry but despite the time and effort put into your comment it’s still dumb and nonsensical. Translators exist and speaking English is not a prerequisite to being a good international polical figure. Next time take a bit more time to finish you thoughts