Is globalization still the answer? Maximizing economic and human potential

We don't trade nearly as much as we could do with other countries. We don't read news sites from other countries. And the news we read is dominated by domestic issues - despite disasters abroad. We prefer giving money to poor people nearby, rather than those in distant countries. We trust people who live far abroad ten times less than those nearer to home. Apparently, despite our blackberries and our Facebook friends, given how localised our concerns are, we might as well be living in caves.

Professor Pankaj Ghemawat, author of the DHL Global Connectedness Index 2012, raised some eyebrows with these statements during a recent Delphi Dialog in Frankfurt. And despite the fact that trillions of dollars could be generated through greater connectedness, we still aren't improving, Ghemawat said. "Global integration is still quite limited. And what surprised me the most in the 2012 report was that we are actually less connected than we were in 2007."

The index analyzes the state of globalization around the world - and concludes that the world today is less globally connected than it was in 2007. It documents how global connectedness, measured by international flows of trade, capital, information and people, grew robustly from 2005 to 2007, and then dropped sharply at the onset of the financial crisis. Despite modest gains since 2009, global connectedness has yet to recapture its pre-crisis peak.

Why? A diverse audience from politics, the media and business considered different aspects of connectedness. "We tend to see globalization chiefly from a trade perspective, but a lot of the concerns I hear about it go beyond the realm of the economic," Ghemawat remarked. He and his fellow panellists Wendy Kopp and Frank Appel talked about possible limiting factors, from language, through culture, to politics.

Fear of voters' opinions has always been the single most constraining factor for politicians, said Ghemawat. Moderator Andrew Hill wondered whether managers at multinational companies, unconstrained by national constituencies, think differently about people living in different countries. "I care about my employees equally, whether they are in Germany, the U.S. or China," said CEO Frank Appel. "People are human beings first, before they are Chinese, or American, or German."

Is language the culprit for the lack of connectedness? Frank Appel noted that it is always easier to connect with colleagues in a language they share, rather than needing an interpreter, which can feel like a barrier. Kopp described deprived children learning English at a school in Delhi. "This will enable them to break the cycle of poverty," she said. But what of the other children, the poorest in different countries? Socioeconomic background completely predicts people's success, said Kopp. "We have to ask ourselves if we want to increase educational equality." Otherwise, she warned, globalization will exacerbate the inequalities we see today.

We tend to view education as a local issue. But the potential for broadening access - and the benefits this would generate - are significant. Education is one of the best ways to combat fears about globalization, and make it safe, said Ghemawat. And as far as caring for our distant neighbours goes, we would only have to care about them marginally more than we do for closer compatriots to fulfil poverty reduction goals, he added.

Comments and analyses on the fifth Delphi Dialog in Frankfurt

• "Our idea of distance has changed, from people in the south of France, twenty years ago, to China nowadays, for example." (CEO Frank Appel)
• "Not everyone can travel abroad - but it is our duty to bring the stories back that human beings are not different." (CEO Frank Appel)
• "We have not done nearly as much as we could to break down barriers - but technology could help." (Pankaj Ghemawat) 
  
• "We have to ask ourselves as a global community whether we are going to make a different level of commitment to expanding educational opportunity." (Wendy Kopp)