The research, conducted by DHL and New York University’s Stern Business School of Business tracks the flows of trade, capital, information and people around the world and measures the globalisation of 181 countries and territories.
This year’s report found that globalisation reached a record high in 2022 and remained close to that level in 2023 despite shocks including the Covid-19 pandemic, wars in Ukraine and Gaza, the US-China trade conflict and the UK leaving the European Union.
It rebuts claims that the growth of global flows has gone into reverse.
The share of global output traded internationally was back at record levels in 2022 before a slowdown last year with trade growth forecast to accelerate this year.
Information flows have been strong over the past two decades though the latest data shows a stall in growth partly due to less research collaboration between the US and China.
Corporate globalisation is rising with companies expanding their international presence and earning more sales abroad.
John Pearson, CEO of DHL Express says the report refutes claims that globalisation is declining adding that it is an influential force that has reshaped the world and has further potential.
He says, “Expanding markets and fostering opportunities empower individuals, businesses, and entire nations to flourish in unique ways. Embracing globalisation allows us and our customers to forge a promising future, fostering an increasingly interconnected world, more prosperous for all - and poised for further growth.”
The report says the world’s current level of globalisation is only 25%, meaning there is a lot of potential for future growth.
Singapore was named the most globalised country, scoring 79 out of 100, and it was named the country with the largest international flows relative to domestic activity and number 6 for countries with the largest connectedness increase since 2001.
Europe is the most globally connected region followed by North America and the Middle East & North Africa.
Ih-Ming Chan, Executive Vice President of the Singapore Economic Development Board, says, “Singapore has invested heavily in strengthening our physical and digital connectivity to the world because trade is our lifeblood. We continue to enhance our connectivity and trade links to remain a critical and trusted node in global supply chains, facilitating international trade and flows of capital, information and talent.”
US-China ties continue to diminish with the shares of both countries’ flows involving each other decreasing about one-quarter since 2016 but they remain significantly connected, demonstrating larger flows than almost any other pair of countries.
Russia had an unprecedented drop in connectedness, more than twice as much as any previous decline on record among the world’s 20 largest economies.
The reports adds that the data shows there is no wider split of the world economy between rival geopolitical blocs.
The shift from globalisation to regionalisation are not visible in international flows with the report saying flows are taking place over stable or longer distances with declines happening inside geographic regions.
Only North America showed a clear shift to more regionalised trade patterns.
Steven Altman, Senior Research Scholar and Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management says deglobalisation is only a risk, not a reality, and that while geopolitical threats and public policy shifts have led many to predict a fracturing of the world economy, the data shows international flows are growing and few countries are cutting ties from traditional counterparts.
He says, “It is important to recognise the resilience of global flows because a lopsided focus on the threats to globalisation could make deglobalisation a self-fulfilling prophecy.”