A research study indicates that the Korean economy’s globalization ranks 20th, falling behind Malaysia and Poland that are much smaller in economic size.
According to a report titled “Global Flows in a Digital Age” put forth on May 7 by research firm The McKinsey Global Institute (MGI), Korea ranked 20th in global connectedness, trailing behind Malaysia (18th) and Poland (19th) out of 131 countries in the world.
The rank was based on how much a nation contributed to international flows in goods, services, finance, human resources, and data in 2012.
In the same year, Korea’s Gross Domestic Product (GDP) ranked 15th with a total overseas trade size of US$1.4 trillion, 123 percent of the GDP.
The local economy stood 7 in rank in goods, 14 in service, but fell behind in the people segment such as immigration, travel, and overseas education by ranking 58, while in data and finance it ranked 34 and 25 respectively.
Japan ranked 21st, behind Korea, due to the former’s lack of people-based transactions.
The most connected country turned out to be Germany, followed by Hong Kong and the U.S., to be trailed by Singapore, England, Holland, France, Canada, Russia, and Italy. China came in 25th.
The report estimated that global flows of goods, services, and finance in 2012 reached $26 trillion, or 36 percent of global GDP, and global flow could double or nearly triple by 2025 to reach US$54 to 85 trillion.
In addition, the report found that economies with more connections see up to 40 percent more benefits from participation than do less connected economies. It further pointed out that knowledge-intensive flows account for half of global flows, and they are gaining share. For instance, knowledge-intensive goods flows are growing at 1.3 times the rate of labor-intensive goods flows.