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Post-crisis, the world reconnects its dots

Measures of globalization show a rebound of connectedness since the 2008 economic crisis. Tracking what unites people is more critical than identifying what splinters them.

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Investors in Shanghai, China, sit in front of an electronic board showing stock information at a brokerage house.

Reuters

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One sign of humanity drawing closer is a rise in measurement of worldwide topics. We now have a global index on happiness, for example, as well as those on terrorism, carbon emissions, obesity, etc. Only a few studies, however, look at globalization itself, or the bonds that connect us across borders and that imply a universal nature to human activity.

The obvious connectors are trade, money, information, and people movements. These were all going up until the 2008 economic crisis and then either fell or leveled off. Global integration was down about 10 percent. The notion of “the world is flat” was in retreat.

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Not to worry. The latest DHL Global Connectedness Index shows a rebound last year. Compiled by New York University’s Center for the Globalization of Education and Management and the IESE Business School, the index has yet to regain its pre-2008 heights. But at least a small recovery has restored faith in the upward march toward a smaller world (after all).

A similar index, released last April by the McKinsey Global Institute, shows how much globalization has taken hold. The world flow of goods, services, and finance in 2012 was 1-1/2 times the level in 1990. One in 3 goods now crosses a border. The DHL index found that nearly 20 percent of Internet traffic crosses borders.

Most of the recent rebound in globalization occurred in emerging countries, especially in Latin America. This may be caused by an economic slowdown in many wealthier nations. Yet the advanced countries, especially the Netherlands, Germany, and Singapore, still rank highest in their breadth and depth of connectedness to other markets. Poor countries are still catching up.

Globalization can be easily overestimated. Only 5 percent of phone calls, for example, are international. And many people in rich nations believe immigration is much higher than it actually is. In fact, the number of migrants remains close to the 3 percent of world population that it was a century ago. Tourism is up, but staying put in one’s own land is still the norm. In fact, a negative reaction to globalization has spawned movements toward localization, such as local food, local economies, and even local currencies in a few cities.

When the ancient Greek philosopher Diogenes was asked where he came from, he replied, “I am a citizen of the world.” Most of the human boundaries were artificial to him. Today, few people would see themselves as world citizens. Boundaries are more porous, for sure, yet remain. One reason is that people feel either buffeted by the global effects (terror, Ebola, transfer of jobs) or the benefits of a closer world (Internet, easier travel, new ideas, cheaper goods).

Tracking these global trends is more vital than ever. These indexes help show that people need not become uniform in their ways but can draw closer, and perhaps even find something universal in one another.