A graph depicting the growth in information, people, capital and trade globalization since 2001
The real extent of globalization

Think:Act Magazine "Own the future"
The real extent of globalization

Portrait of Think:Act Magazine

Think:Act Magazine

Munich Office, Central Europe
August 6, 2019

A new study shows your perception of globalization growth may not line up with the reality

Article

by Janet Anderson
Illustrations by Maximus Chatsky

Read more about the topic "Own the future"

Globalization has brought many benefits to businesses, individuals and whole countries, but the recent backlash has called these into question. Amid growing tensions, it is vital to distinguish between perception and reality. Research by Pankaj Ghemawat, global professor of management and strategy at the Stern School of Business at New York University and co-author of the "DHL Global Connectedness Index", reveals that we both over- and underestimate the extent of globalization. Getting the facts right can help business and policymakers identify key challenges and spot opportunities.

Information shows the biggest growth in globalization

Recent trade wars and a new nationalism have had an impact on globalization, but not as great as some may think. International flows of products and services (trade), capital, information and people, are still growing overall.

Public perception differs from reality

A survey of over 6,000 managers in Germany, the UK, the US, Brazil, China and India, carried out by Pankaj Ghemawat and colleagues in 2017, shows how much we overestimate globalization. In fact, domestic activity far outweighs international – and there is still potential for growth.

Four takeaways from Pankaj Ghemawat's research:
1. There is still potential.

Current trends in nationalism and tariffs have not stopped globalization. There is room for growth, but a realistic approach should be taken.

2. Most business is domestic.

Do not overestimate globalization and assume borders and distance do not matter – they do. Many successful businesses lose money expanding overseas.

3. Plan the right strategy.

Work out whether it is better to offer a standardized product globally or a localized product for each market. Getting the right balance can be vital.

4. Globalization is not an imperative.

Do a cost-benefit analysis that is based on your business reality and not on general assumptions.

About the author
Janet Anderson
Janet Anderson is a Cambridge-educated writer and editor. As a writer, she has contributed to various B2B publications and has worked for many business clients including a large logistics company and a leading chemical producer on their corporate communications.
Further reading
Download our Think:Act magazine
yellow
Think:Act Edition

Your path to tomorrow, today

{[downloads[language].preview]}

The actions of the present lay the foundations for the future. What does this saying mean in turbulent times? Consider a mix of solidity and flexibility!

Published July 2019. Available in
Subscribe to newsletter

Curious about the contents of our newest Think:Act magazine? Receive your very own copy by signing up now! Subscribe here to receive our Think:Act magazine and the latest news from Roland Berger.

Portrait of Think:Act Magazine

Think:Act Magazine

Munich Office, Central Europe