Global Connectedness Index: Development Trends Globalization

Global Connectedness Index: Development Trends Globalization
parcelLab
parcelLab
Mon, 03/06/2017
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How connected is the world?

DHL has published the 4th edition of the Global Connectedness Index (GCI). This index provides a detailed analysis of the level of globalization worldwide. It is measured by cross-border trade, movement profiles of citizens, and capital and information flows. It shows that the world was 8% more interconnected in 2015 than in 2005.

  • Information exchange is becoming more intensive
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In the period from 2013 to 2015, the variable "information" grew the most. This is measured by Internet use, minutes of telephone conversations and printed publications. In contrast, the variables "capital" and "internationality of citizens" grew only moderately and "cross-border trade" even decreased.

  • Politicians and managers support globalization
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The GCI shows that globalization is slowly recovering from the financial crisis, but the future is still uncertain. In the process, politicians and business leaders are initiating supportive policies to drive further development and improve the lives of citizens worldwide.

Country and Region Results

In addition to an overview of the status quo of globalization, the report maps detailed knowledge of the interconnectedness of individual countries and regions. Countries were assessed in both depth and breadth. Depth describes the intensity of internationality, while breadth describes the geographical distribution. When both dimensions are combined, the result is a 'connectedness score' between 0 and 100.

  • Advanced countries are more international than emerging countries
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Advanced countries are four times more likely to be integrated into international capital flows and nine times more likely to be integrated into information flows compared to emerging countries. In addition, their citizens cross national borders more often.

  • Countries and regions that are most connected
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The Netherlands is considered the most connected country, while Europe is considered the most connected region. Apart from Singapore and the United Arab Emirates, the top 10 countries are in Europe. North America ranks second by region and leads in capital and information, with the U.S. as the most connected country. Overall, the U.S. ranked 27th out of 140 based on the index's measurement. North America had the largest increase in Global Connectedness within the last two years, followed by South and Central America and the Caribbean. Countries in South and Central Asia and Sub-Saharan Africa, on the other hand, suffered a decline in the average level of Global Connectedness.

  • Strongest Change in Ranking
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Suriname, Jamaica, and Fiji were the biggest gainers in terms of their changed position in the rankings between 2013 and 2015, with Suriname moving up 23 places (from 112 to 89), Jamaica 22 places (from 107 to 85), and Fiji 20 places (from 94 to 74). Suriname's rise was achieved by substantially expanding its international interactions, while both Jamaica and Fiji increased their GCI in breadth and depth. Nigeria, Togo, and Nicaragua experienced the largest drops in the rankings. Nigeria dropped 28 places (from 67 to 95), Togo dropped 21 places (from 72 to 93), and Nicaragua dropped 19 places (from 71 to 90).

  • New indexes for cities: "Globalization Giant" and "Hotspots"

The twin trends of globalization and urbanization have led to a growing interest in global cities. The latest edition of the DHL Global Connectedness Index introduced two new indices for cities. The "Globalization Giant" index compares the amount of international interactions in cities. The "Globalization Hotspot" index combines the "depth" dimension of the GCI's country level with the ranking of cities, measuring the intensity of international trade, capital, information exchange and citizen movement profile compared to internal activity.

  • Singapore ranks #1 in city rankings
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Singapore tops both of these new indexes. Even if you don't include structural advantages, no one can top the city in the depth of its international flows. Particularly notable are the methods used to promote the growth of connections to Singapore's immediate neighborhood. The persistent leaders in the rankings of global cities are London and New York. They rank third and fourth in the Globalization Giant index, but only 47th and 76th in the Globalization Hotspot index. If the report is to be believed, small cities often focus more on international activities than these two megacities. Unexpectedly high places in the Hotspot Index were occupied by Manama (2nd), Tallinn (6th) and Mumbai (13th).

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Opportunity for e-commerce companies

Overall, increased Internet usage across national borders was registered, although international trade as well as information flow remained below its potential. This creates many opportunities for international e-commerce companies: They can expand their business activities and increase consumer options worldwide.

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