Why the world is less connected than five years ago

The global economy is less international than our connection through social media.

In 2007 we weren't following live tweets from protests halfway around the world and Facebook users represented only a fraction of the population of the United States. While the world is more connected in some ways, in other ways we're less globalized.

That's the conclusion from a new report from the 2012 Global Connectedness Index by the German logistics company DHL. The report says that global connectedness has yet to recover from the global financial crisis, failing to reach its pre-crisis peaks.

The report measures connectedness by its depth -- how much of a country's economic flows are international rather than domestic -- and its breadth -- how many different countries connect with it.  Measures that are important because, as the report argues, "global connectedness is a powerful contributor to prosperity."

Using these measures, the most connected countries are:

  1. Netherlands
  2. Singapore
  3. Luxembourg
  4. Ireland
  5. Switzerland
  6. United Kingdom
  7. Belgium
  8. Sweden
  9. Denmark
  10. Germany

Still, overall capital and trade flows became less globalized after the financial crisis and while trade has picked up somewhat, capital flows have fallen to their lowest point. On the other hand, information flows are continuing to grow thanks to social media. Some other observations from the report:

  • Even online, borders and distance matter -- most international flows take place within regions
  • Europe is the most globally connected region
  • Sub-Saharan African countries had the largest connectedness increases, but it's still the least connected region
  • Increasing global connectedness could mean trillions of dollars in growth

Read the full report here.
Photo: Flickr/F.d.W.

This post was originally published on Smartplanet.com

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