Trade and Connectedness not Fences will make the World a Better and Safer Place

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If you’ve been following me here for some time, you might have realized already that I am definitely an admitted believer in globalization or how we call it at DHL „global connectedness“. This already starts with my personal life. I am very grateful for having been able to live in different countries – in the US during high school (85/86), in London and Toronto during my time at university (91/93), in Graz, Austria (96/97) during my days at OTTO group and in Istanbul (13/16) while I have been CEO of DHL Express Turkey. All these experiences have shown me how important and enriching it is to experience different cultures, countries and people personally. And in terms of business this is quite similar: connecting with others, with countries, businesses and customers brings trade and with this global prosperity and peace. During the last 10 years DHL has done research on the topic of globalization with NYU Stern School of Business. And the latest update of the Global Connectedness Index (GCI) proves: not even the pandemic has been able to stop globalization. The report has collected 3.5 million data points of 169 countries to analyze the international flow of trade, capital, people and information. To me, two key words really stand out in this broad analysis: resilience and opportunities.

Globalization passes Covid-19 stress test

When the pandemic hit country after country at first it seemed to bring all these countries to a complete standstill. Boarders got closed. Supply chains got disrupted and many goods were no longer available or at least in very short supply. However, with increasing security procedures and guidelines and the need for supplies like masks and Covid-19 tests around the world global trade soon started to recover. The Global Connectedness Index clearly shows that global trade declined only modestly in 2020 and then came to a recovery in 2021. And the more connected a country was, the sooner it recovered. Already by early 2021 trade of goods had surged to above 5% of pre-pandemic levels. However, according to the study the mixture of trade has changed. It moved from trade of services to trade of goods and especially all things related to handling the pandemic became part of global trade. One prominent example has certainly been the availability of vaccines and its distribution around the world. DP DHL has already shipped more than 1.4 billion doses of vaccine. Could there be any better light house of our company purpose “Connecting People, Improving Lives”? It really is in our DNA to connect the world and with our global DHL Express network we bring the world closer together for a better living.

Connectedness still limited

While it is encouraging that the GCI indicates how resilient the existing globalization level has been, it also reveals that domestic flows still by far dominate. There still is a lot of potential for many countries regarding international connectedness! The wealthiest countries are the most connected countries while less wealthy countries lack connectedness. Trade certainly is the most important opportunity for less wealthy countries which are not the most connected ones. At DHL as part of our purpose we also have great initiatives like our program GoTrade supporting small and medium-sized enterprises. This includes for example supporting women in business in Africa or organizing events explaining how e-commerce and digitalization make it much more easy to put your business on an international platform. As a logistics company we have the opportunity of building bridges also for developing countries. Once connected to global markets, their prosperity will rise as the trade level does. And the GCI 2021 forecasts that global trade will grow even more in the future offering even more opportunities and prosperity.

Politics make the difference

As 2021 marks the 10th anniversary of the study, the researchers of NYU have also included lessons learned of the past 10 years of GCI. This special report states that policymakers can really make a difference and effectively improve the connectedness of their countries to enable more prosperity. For an increasing connectedness the study identifies five key areas:

1.    peace and security,

2.    an attractive domestic business environment,

3.    regional integration,

4.    societal support as well as an

5.    openness to international flows.

With these findings the GCI also encourages governments to take a deep-dive and review the report and its finding carefully. Germany is currently ranking number 5 in terms of openness policies. This includes factors such as infrastructure quality, customs performance or visa-free travel. These factors are all increasing a country’s global connectedness. As Germany is currently undergoing a political turning point after 16 years with chancellor Angela Merkel, I am curious to see what the future brings for Germany as a country and also for Germany regarding globalization and the findings of future GCI reports.

To me, it’s trade and exchange and not fences (real or virtual) making the world a better and more resilient place.