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Is it possible to measure globalization?
Schulze and Ursprung (1999) say there is no firm agreement about how to measure globalization. One reason is that it is a difficult concept to measure at all (Schulze, Ursprung, 1999 in Daniels, Radebaugh, Sullivan, 2007). Currently about 25 percent of world production is still sold outside its country of origin, as opposed to about 7 percent in 1950. Restrictions on import have been decreasing and foreign ownership of assets as a percentage of world production has been increasing. Almost every year since World War II, world trade has grown more rapidly than world production. At the same time, globalization is not as pervasive as it might appear on the surface. Only a few countries, mainly very small ones, either sell
12 over half their production abroad or depend on foreign output for over half of
their consumption. Thus, most of the world´s goods and services are still sold in the countries where they are produced. Further, the principal source of capital in almost all countries is domestic rather than international. Finally, some countries are more globalized than others. The A.T. Kearny/Foreign Policy Globalization Index ranks 62 countries across four dimensions: economic (international trade and investment), technological (Internet connectivity), personal contact (international travel and tourism, international telephone traffic, and personal transfers of funds internationally), and political (participation in international organizations and government monetary transfers). (Daniels, Radebaugh, Sullivan, 2007).
The Globalization Index 2011 released by Ernst & Young showed that Singapore was ranked third after Hong Kong and Ireland among 60 largest economies in the world. The Globalization Index measures and tracks the performance of the world’s 60 largest economies in relation to separate indicators in five broad categories: openness to trade; capital movements; exchange of technology and ideas; movement of labor; and cultural integration. Hong Kong ranks first in openness to trade, capital movements and cultural integration. (Ernst & Young, 2012)