One of the biggest fears evoked by the current global economic slowdown was that governments across the world would tighten their borders in an attempt to protect their economies, repeating the mistakes that exacerbated the Great Depression.

Having committed to major fiscal stimulus packages and carrying out the biggest corporate bailouts ever, governments again have become big market players, but in spite of the bevy of concerns, the process of globalisation is expected to resume as the economy recovers from the current recession, according to one report.

One of the two major trends singled out in a recent Ernst&Young study is that while globalisation has been reversed, opponents of the process will only get a brief respite.

"The financial crisis has put the brakes on globalisation. But as the economy recovers, the [Globalisation] Index predicts that the globalisation rate will once again resume, although at a slower pace than earlier in the 2000s," the report said.

The Globalisation Index, introduced in the report, measured and tracked the performance of the world’s 60 largest countries according to 20 separate indicators that capture the key aspects of cross-border integration of business.

The indicators were grouped into five broad categories: openness to trade; capital movement; exchange of technology and ideas; labour movement; and cultural integration.
These categories have been weighted, ranging from 17 per cent to 22 per cent for each, based on the significance placed on each factor by 520 surveyed senior company executives doing international business.

To provide a basis for comparison, the index has been calculated retroactively to 1995 and future behaviour was forecast until 2013, measuring relative globalisation – a country’s trade, investment, technology, labour and cultural integration with other countries relative to its gross domestic product rather than by the absolute value of these elements being exchanged.

Singapore ranked top of the list, a predictable outcome since small countries that rely more on international integration were favoured by the report’s definition of globalisation.
Hong Kong was second, followed by Ireland, Belgium and Sweden. Rounding up the top 10 were Denmark, Switzerland, The Netherlands, Israel and Finland.

Bulgaria ranked 28th, scoring highest in the movement of capital and movement of goods and services, but doing poorly in the exchange of technology and ideas category.
Bulgaria is expected to become slightly more globalised in respect to movement of finance, movement of labour and cultural integration, while the movement of goods and services score is expected to decrease.

Starting from such a low point, the exchange of technologies is expected to shoot up, in line with the report’s second major trend, namely that technology would remain the main driver of globalisation.

"Without technological innovations such as mobile telephony and the internet, globalisation in its current form would not have been possible. As globalisation picks up from 2010, it will be the spread of technology that once again provides the main impetus behind greater integration," the report said.

That is not to say that globalisation would proceed as smoothly as it had before the economic downturn.

"At a macro level, global and domestic economic imbalances have yet to be unwound and could again cause disruption if left unaddressed. Global governance still lags market integration, multilateral institutions are grappling with the changing balance of power in the world economy, and momentous challenges such as climate change and food and energy shortages loom ever larger," the report said.

"Much of the debate will be framed by the seismic shift in economic power from West to East, and this will reshape micro-level thinking within companies too. This involves long-term reallocation of capital and resources and a profound reappraisal of how companies should be structured to meet the needs of the world’s emerging customers."

Redrawing the Map: Globalisation and the Changing World of Business was drafted by consultancy and audit firm Ernst&Young, using research by the Economist Intelligence Unit, and published on January 29 2010, during this year’s World Economic Forum in Davos, Switzerland.