Despite concerns about the dangers of globalisation in many industrialised countries, a study published Friday shows that industrialised countries reap the greatest economic profits from increased global interconnectedness.
The study, which was executed by the Prognos consulting firm and published Fridayexternal link by the Bertelsmann Foundation, measured the real gross domestic product (GDP) per capita across 42 industrialised and industrialising nations between 1990 and 2016. During that period, real GDP grew about €1 trillion (CHF1.2 trillion) on average per year across all countries surveyed.
While all countries saw positive growth in GDP per capita, there was extreme variation. Switzerland came out on top in the ranking, with GDP per capita from globalisation growing on average by €1,190 per year between 1990 and 2016. Other nations that saw economic output increase most markedly were Japan, Finland, Ireland and Israel. India came out at the bottom of the ranking, with GDP per capita increasing by an average of €20 per year, followed by China (€80) and Mexico (€120).
"The report shows: globalisation can clearly create welfare gains. Protectionism is not the right way forward. However, globalisation must be shaped in such a way so the focus is on the people. This is the only way we can live up to our promise of success," said Bertelsmann Foundation CEO Aart De Geus in a statement.
The Foundation criticised the unequal distribution of globalisation profits, and said that market openings in industrialising countries and reduced subsidies in industrialised countries were two possible ways to ameliorate the problem.
"We must promote an international economic order that does not promote the right of the strongest, but sets common binding rules and standards," said Bertelsmann Foundation economics expert Cora Jungbluth. "Only in this way can globalisation profits be distributed as widely as possible."
The authors of the study measured “international connectedness” of each nation based on economic, political and social globalisation indicators, as well as the resulting increase in real GDP per capita. The globalisation index used, which assigns nations a value between 0 and 100, is similar to the KOF globalisation index of the Swiss Federal Institute of Technology ETH Zurich.
The authors note that the lowest indices measured could be partially due to the fact that low-ranking nations opened themselves to the world economy later than more industrialised countries, and that some still face barriers to trade and market entry.