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