Getting Global

0 Comments | Insight on the News, Feb 26, 2001 | by David R. Sands

The United States places 12th in a new ranking of countries measuring globalization trends.

Singapore comes in first and the United States 12th in a new survey that attempts to measure a country's exposure to the forces of globalization. The index, compiled by the journal Foreign Policy and the business consulting firm A.T. Kearney, is an effort to quantify a phenomenon that has prompted both hope and fear as technology and economic change reshape the world.

"There are many definitions of globalization out there," says Moises Naim, editor of Foreign Policy. "What you don't get are the real scope and reach of what people are talking about. We decided to put some numbers to it."

Researchers looked at 50 countries accounting for 95 percent of the world's economic output in 1998. Among the nine factors they considered: trade as a percentage of gross domestic economy, percentage of the population using the Internet, foreign direct investment and the number of minutes of international phone calls per capita. While the United States scored highest among the top 20 countries in terms of technological innovation and the Internet, other countries ranked far higher in their interactions with the global economy and the exposure of their citizens to those outside the country.

After Singapore, a commercial and financial center for much of Southeast Asia, the next eight spots were held by Western European countries, led by the Netherlands, Sweden and Switzerland. "Size matters," says Naim. "There is this notion that globalization works best for the big countries, but we found that the smaller you are, the easier it is to be globalized."

The United States is so big that personal and commercial interactions with foreigners are much less frequent, according to the index. The average Swiss citizen logs four times the number of international telephone minutes as the average American. Foreign direct investment in the Netherlands is five times as high as the United States as a percentage of gross domestic product.

The index did not measure the cultural aspects of globalization, including rising fears of the dominance of American movies, music and marketing ideas. But according to Paul A. Laudicina, managing director of A.T. Kearney's Global Business Policy Council, the survey challenges one key criticism of globalization. Combining the index rankings with other surveys that compare levels of corruption and democracy, researchers found that the countries most open to globalizing forces are also likely to enjoy more political freedom, greater income equality and lower levels of official corruption.

The Internet and technological innovation will continue to erase international barriers at an ever-increasing rate, the index notes. But economic aspects of globalization -- including trade, investment and stock-market investments -- have slowed in the wake of the Asian and Russian economic crises of 1997 and 1998.