The DHL Global Connectedness Report, published regularly by DHL in collaboration with the NYU Stern School of Business, has been an important compass for decision-makers in business and politics since 2011. The report assesses the global connectedness of 181 countries and territories, making it the most comprehensive analysis of the state of globalization to date. This year’s edition confirms: There are no sustained signs of deglobalization.
The Trend Toward Globalization Continues – Despite Worldwide Shocks
The Global Connectedness Report 2024, compiled as in previous years by DHL in collaboration with the New York University Stern School of Business, is the result of a thorough analysis of nearly 9 million data points on trade, capital, information, and people flows from country to country. It quantifies the degree of globalization for 181 countries, representing 99.7% of the global economy and 98.7% of the world’s population. The report provides a unique and comprehensive picture of how goods, services, capital, information, and people circulate around the world.
Since DHL’s last Global Connectedness Report some of the pressures of globalization have eased while others have increased. The disruption caused by the Covid-19 pandemic is now in the past and its economic impact is waning. In contrast, the number of violent conflicts has grown, and geopolitical rivalry over key technologies and the trade conflict between the United States and China have continued to escalate.
In times of serious conflict such as the present, the role of globalization is often called into question and regionalization is discussed as a possible response to global disruption. However, the latest DHL Global Connectedness Report comes to a remarkable conclusion: globalization reached a record high in 2022 and remained close to that level in 2023.
Hardly any Regionalization or Fragmentation
This also implies that predictions of a global shift from globalization to regionalization are not reflected in the analysis of international flows. This may sound surprising, but the data speaks for itself: global interconnectedness continues to spread, even as the political environment becomes less conducive and cross-border conflicts dominate the headlines.
Of the countries analyzed in the DHL Global Connectedness Report 2024, 143 countries are more globally connected than before. Only 38 countries show a drop in connectedness. One of these countries is Russia. This is mainly due to the economic decoupling of Russia and Europe. Russia’s connectedness has declined to an extent that is unprecedented among the world’s 20 largest economies.
Except for Russia’s performance, the data does not indicate a fragmentation of the global economy into competing geopolitical blocs – not even when it comes to the US and China. Although trade flows between the two superpowers have been on a downward trend since 2016, the two countries remain closely intertwined and still show more bilateral flows than most other country pairings.
The most recent findings of the DHL Global Connectedness Report 2024 unequivocally dispel the notion of globalization reversing course. Far from being a mere buzzword, globalization is an influential force that has profoundly reshaped our world and has further great potential. Expanding markets and fostering opportunities empower individuals, businesses, and entire nations to flourish in unique ways. Embracing globalization allows us and our customers to forge a promising future, fostering an increasingly interconnected world, more prosperous for all – and poised for further growth.
John Pearson, CEO DHL Express
Globalization Driven by Trade Growth
Trade growth is a key factor in increasing global interconnectedness. The share of international trade in global output reached a record high in 2022. After a slowdown in 2023, trade growth is expected to accelerate again in 2024.
Adding to this picture is the ongoing globalization of companies. Many are expanding their international presence, in some cases generating more revenue abroad than in their home country.
Only the globalization of information flows is currently stagnating after a strong upswing over the past twenty years. This is due, at least in part, to the decline in research collaboration between the US and China.
Deglobalization is still only a risk, not a current reality. Geopolitical threats and public policy shifts have led many to predict a fracturing of the world economy along geographic or geopolitical lines, or even a retreat from international to domestic business. But the latest data still show that international flows are growing and very few countries are cutting ties with their traditional counterparts. It is important to recognize the resilience of global flows because a lopsided focus on the threats to globalization could make deglobalization a self-fulfilling prophecy.
Steven Altman, Senior Research Scholar and Director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management
Plenty of Room to Grow
Public perception suggests that we live in an age of unbridled globalization. In fact, data from the Global Connectedness Report reveals that international flows are still much smaller than flows within national borders.
This year, for the first time, the DHL Global Connectedness Report applies a methodology to determine the degree of globalization around the world. The scale ranges from 0% (no cross-border flows at all) to 100% (unrestricted flows across all borders and distances). The current global value is 25%. In other words, there is no such thing as a fully globalized world: Although globalization is currently at an all-time high, there is still plenty of room for growth.
Top 10 Key Takeaways from the DHL Global Connectedness Report
- Globalization at a record high: Global connectedness reached a record level in 2022 and remained close to this mark in 2023.
- Singapore on top: Singapore was the most globally connected country in 2022, followed by the Netherlands and Ireland.
- US-China ties diminish: The decline in direct trade between the US and China accelerated in 2023, but the two countries are still closely intertwined.
- Russia and Europa decoupled: Among the major G20 economies, Russia experienced the largest one-year decrease in global connectivity on record.
- No global fragmentation: Global flows do not suggest a fundamental fragmentation of the world economy into competing geopolitical blocs.
- No regionalization trend: Most international flows occur over stable or longer distances.
- More corporate globalization: Companies have expanded their international presence and increased revenue abroad.
- Trade at a record high: In 2022, the share of world trade in world GDP reached a record high. It fell slightly in 2023.
- Information flows stagnate: After twenty years of rapid growth, the globalization of information has begun to stall.
- Globalization remains limited: The world’s absolute level of global connectedness is only at 25%.
Find out much more in the new DHL Global Connectedness Report 2024.
You can download the full report and the key highlights brochure here.
