The GCI ranks 125 countries in terms of the depth and breadth of their integration into the global economy, also examining the relationship between global connectedness and prosperity. The study proves that the scope of global connections has enormous growth potential, even among the most “connected” countries.
The GCI study was presented against the backdrop of the APEC summit and the Leader’s Week meeting in Honolulu, an annual global summit of heads of state and leading entrepreneurs, where international economic issues are discussed. The study was commissioned by DHL and conducted by the world-renowned economist and global business strategist, Pankaj Ghemawat, Professor of Global Strategy at IESE Business School in Barcelona.
– The study proves that a connected world is a better world in terms of global prosperity and individual development. Free trade in goods and services contributes significantly to global prosperity – said Roger Crook, CEO of DHL Global Forwarding, Freight. – The results of the DHL study will likely benefit major entrepreneurs as well as political and economic leaders shaping business and trade strategies. By calibrating their actual connections, countries can identify opportunities and channels to increase their prosperity.
– Our research shows that global economic integration is not as deep as it is perceived. We therefore see untapped growth potential that applies to every country and the entire world. The growing scope of global connections could stimulate further growth, adding trillions of dollars to the gross domestic product – added Pankaj Ghemawat.
The DHL Global Connectedness Index 2011 analyzes data on 10 different types of international flows and covers categories such as trade, capital, information, and people, between 2005 and 2010. Unlike existing indices, in addition to the depth of countries’ international interactions, the GCI also analyzes the breadth of their geographic scope, distinguishing countries with actual connections spanning the entire globe from countries connected only to a small number of partner countries. Furthermore, this index is based solely on authoritative quantitative data. More information on the research methodology can be found at www.dhl.com/gci.
The 2011 GCI index showed that the 10 most connected countries are: the Netherlands, Singapore, Ireland, Switzerland, Luxembourg, the United Kingdom, Sweden, Belgium, Hong Kong (China), and Malta. The diversity among the leading countries is even greater in the top 50 list, which includes representatives from all six continents. The models indicate that the benefits of connectedness are available to a wide range of countries, not just the trade hubs that rank highest in many other globalization indices.
– The positive impact of global connections on world prosperity will continue to be of great importance. The concerns of some political leaders regarding the growth of global integration are unfounded. The benefits resulting from it far outweigh its potential drawbacks – said Ghemawat.
The main conclusions from the index are as follows:
• The current actual level of connectedness is significantly lower than the commonly held view, so the opportunities for its growth are significant.
• The Netherlands ranks 1st in terms of total scope of connections, Hong Kong received the highest marks for the depth of its international connections, while the United Kingdom leads in the breadth of the scope of connections.
• Despite an increase in the scope of trade interactions in recent years, the United States ranked 25th in the overall classification. The United States is a leader in terms of breadth (#3), however, as one might expect in the case of very large internal markets, it lags behind in terms of depth (#84).
• The lion’s share of international connections remains concentrated among neighboring countries (as is the case, for example, in Northern Europe) and those with shared cultural and historical ties, which indicates that a significant part of today’s globalization is in fact regionalization.
• Larger countries perform better in terms of the breadth of global connections; smaller ones lead in terms of the depth of their connections.
• Countries implementing policies that directly support the growth of international flows, as well as policies to improve the domestic business environment, can increase the scope of their global connections.