Looking beyond the obvious

Globalization continues, but it is different

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If your company plans its future strategies based on assumptions made even just a year or two ago, it will struggle to stay competitive.

The financial crisis and subsequent recessions provided a tipping point that has slowed globalization.

Businesses need to make some radical changes to their assumptions and strategies if they are to weather the next round of globalization.

What has changed?

The overall rate of globalization is slowing and its character is different. Although trade in goods and services is returning to pre-financial-crisis levels and the flow of capital shows a stable increase, the game changer today is technology and the flow of ideas.

EY - Globalization  index components show varying integration ratesTechnology is the foundation of today’s increasingly digital and connected world and it is having a profound impact on every market. By contrast, the globalization of talent is still at an early stage: businesses worldwide struggle to find workers with the right skills and experience, and pools of top talent cluster in some locations but are scarce in others.

EY - Technological advances are the top driver of globalizationEY’s 2012 Globalization Index shows distinct geographic differences between markets as capital flows show a return to the US and core Eurozone countries. Trade, technology, culture, labor and capital will integrate at different rates across the 60 countries/territories measured in the Index.

As trade integration stabilizes, we see a shift between import and export countries. Rapid-growth markets emerge as stronger consumer markets and developed markets regain strength as producers and exporters of goods and services.


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