Looking beyond the obvious
Globalization and new opportunities for growth
About the 2012 Globalization index
Globalization has become more nuanced since 2011 as different aspects of the Ernst & Young Globalization Index have become more important in driving global integration.
The performance of the major Index components shows higher growth in the integration of goods and services, technology, and capital in the medium term.
By contrast, we expect labor and cultural integration to show less progress toward further integration than in the five years before the financial crisis. The biggest increases in cross-border integration continue to be driven by technology, particularly global connectivity through broadband penetration and internet access, as well as increases in R&D trade.
While integration in mature markets appears to be slowing down, reflecting the already high penetration levels of technologies such as the internet and broadband, it is ramping up for rapid-growth markets. This suggests that the BRICs and other emerging economies can reap particularly big opportunities from further technological integration through 2016.
Ernst & Young’s 2012 Globalization Index was developed by the Economist Intelligence Unit for Ernst & Young to measure the 60 largest countries/territories by GDP according to their degree of globalization. The top 10 country profiles in this document were developed as an extended analysis of the Globalization Index, highlighting the areas of change in each market.
Ernst & Young’s annual Globalization Index was first developed in 2009 in conjunction with the Economist Intelligence Unit. The Index is based on a comprehensive understanding of the underlying drivers for globalization across five main pillars: openness to trade, capital flows, exchange of technology and ideas, labor movements, and cultural integration. With these key categories, the Index incorporates a broad range of sub-indicators for 60 countries and spans a 20-year time horizon from 1995 to 2016.
As globalization evolves, and new and better data sets become available, it is appropriate to review the index data and methodology to accurately reflect these developments. In 2012 we introduced revisions to the Globalization Index scoring system and included several new sub-indicators to better reflect the state of play in the global economy, technology and markets.
|Country||2012 score||Change in score since 2011|
- Changes in the Globalization Index methodology
The new scoring system uses a dynamic normalization technique. In addition, the following variables are included in the 2012 Index:
- Share of main trading partners in total trade, as a percentage of GDP (trade in goods and services)
- Trade in information and communications technology (ICT) goods, as a percentage of GDP (technology)
- Foreign direct investment (FDI) stocks, as a percentage of GDP (capital and finance)
- Total international fixed telephone traffic (culture)
The last two of these variables are substitutions for FDI flows as a percentage of GDP (capital and finance) and international outgoing fixed telephone traffic (culture). The sub-indicator weights in the index have been redistributed to reflect the changes in the variables.
The purpose of these changes is to better capture relative country performance and performance over time across the five main drivers of globalization. The changes are reflected in some larger-than-normal historical revisions to the 2011 ranking, but the updated Index methodology better captures the nuances in globalization in the world today, suggesting improved forecasting capability and insights into key business opportunities and challenges.
- Globalization Index indicators, sources and weighting
Ernst & Young’s 2012 Globalization Index was developed by the Economist Intelligence Unit for Ernst & Young to measure the 60 largest countries/territories by GDP according to their degree of globalization. The table below shows, for each of the headline categories, the individual indicators used and their source. The categories were then weighte.
Browse the data from the Globalization Index and create your own charts to use in presentations or share with clients and colleagues, using the Globalization Index charting tool.