World’s Current Level of Globalization Still Lower Than Pre-Crisis Peak, DHL Global Connectedness Index Reveals

  World’s Current Level of Globalization Still Lower Than Pre-Crisis Peak, DHL
  Global Connectedness Index Reveals

  *Global connectedness has yet to recover from its steep drop at the onset
    of the financial crisis
  *Europe still world’s most connected region, Netherlands on top
    individually; Sub-Saharan Africa averages largest increase from 2010 to
    2011
  *Even the most connected countries can benefit from deeper integration;
    potential gains can reach trillions of dollars
  *The world’s shifting economic center of gravity is reshaping industry
    connectedness

Business Wire

FRANKFURT, Germany -- November 28, 2012

DHL today released the second edition of the DHL Global Connectedness Index
(GCI), a comprehensive analysis of the state of globalization around the
world. The report, drawing on over one million data points from 2005 to 2011,
concludes that the world today is less globally connected than it was in 2007.
It documents how global connectedness, measured by international flows of
trade, capital, information and people, grew robustly from the report’s
baseline year of 2005 to 2007, and then dropped sharply at the onset of the
financial crisis. Despite modest gains since 2009, global connectedness has
yet to recapture its pre-crisis peak.

“The GCI 2012 indicates that today’s volatile and uncertain business
environment bears the lasting impact of the financial crisis,” remarked Frank
Appel, CEO Deutsche Post DHL. “Especially in this period of slow growth, it’s
important to remember the tremendous gains that globalization has brought to
the world’s citizens and to recognize it as an engine of economic progress,”
he added. “Above all, governments must resist protectionist measures that
hinder cross-border interactions.”

Changes in connectedness: Sub-Saharan Africa improves; Netherlands still on
top

While the world as a whole experienced only a modest increase in global
connectedness from 2010 to 2011, some individual countries had large gains.
The countries with the largest increases in their global connectedness scores
are Mozambique, Togo, Ghana, Guinea and Zambia – all of which are located in
Sub-Saharan Africa. While this region remains the world’s least connected, it
averaged the largest connectedness increases from 2010 to 2011.

The Netherlands retained its 2010 position as the world’s most connected
country. Of the top ten most connected countries in 2011, nine of them are
located in Europe. This is the world’s most connected region.

“Europe’s high level of global connectivity points to one of the greatest
achievements of European integration,” commented Appel. “We have to remember
this as talk of fragmentation enters the debate over the continent’s future.”

Although it tops the 2011 ranking, the Netherlands has headroom to further
increase its integration with the world, as revealed in a new case study in
this edition of the GCI.

“Investigating the actual extent of globalization on a country-by-country and
regional basis reveals two critical things,” explains Professor Pankaj
Ghemawat, author of the GCI. “First, cross-border flows are significantly
lower than commonly perceived, and second, every country – even the
Netherlands – has untapped possibilities to benefit from more connectedness.
At a time of economic weakness, this represents one of the most powerful
levers available for boosting growth.”

Connectedness and prosperity strongly linked

The 2012 edition also includes case studies on Mexico and Vietnam and offers
eight recommendations to help countries enhance their connectedness with the
rest of the world. This new chapter highlights evidence that the depth of
global connectedness – the proportion of flows that cross national borders –
contributes to economic development and prosperity.

“The benefits of expanding merchandise trade are much larger than traditional
models indicate,” explains Professor Ghemawat. “Adding to that the gains from
services trade and other kinds of cross-border flows, the estimated economic
benefits double to at least 8% of global GDP.”

Industry connectedness impacted by the rise of emerging markets

A further key enhancement to the 2012 edition of the GCI is an analysis of
industry-level connectedness. The report concludes that the world’s shifting
economic center of gravity is reshaping industry connectedness. The migration
of production and consumption to emerging markets has specific implications
for the three industries highlighted in the report: pharmaceuticals, passenger
cars and mobile phones. The report offers lessons on how companies can adapt
their strategies to benefit from the changing geography of production and
consumption.

Contact:

DHL
Verena Huetteneder, 954-626-2336
Verena.huetteneder@dhl.com
 
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