Pankaj Ghemawat: Globalisation or Globaloney?
Pankaj Ghemawat began his presentation by asking delegates at the Fifth Annual European Investment Conference a series of provocative questions. How global are we? What patterns do we observe about our inter-connectedness? And finally, what are the implications for Europe?
Popular perceptions today are that the world is shrinking, technology is reducing the barriers to distance, and national borders are increasingly unimportant. Yet Ghemawat contends that despite the benefits and ease of technology, human behaviour still matters, distance still matters, and yes, borders still matter — and these factors overwhelm the perception of a small, frictionless world. Citing evidence from his primary research on the subject of globalisation, Ghemawat argued that we are a lot less globalised than many people perceive. He shared data highlighting the percentage of all telephone calls that are international (2%), the percentage of all citizens in a given country who are recent immigrants (3%), the percentage of all foreign direct investment (10%), and finally, the percentage of all exports relative to GDP (30%). Importantly, Ghemawat argued, most people overestimate the percentages in each of these categories by a substantial margin — hence, he refers to globalisation as “globaloney”.