What You Need To Know About the Globalization Index

The globalization index was developed in order to classify countries of the world on the account of global connectivity. It has also been helpful in depicting the interdependence of countries based on economic, social, technological, cultural and political level.

The globalization index metric accepted globally is known as the KOF Globalization Index.

The Metric

There are different aspects of globalization which have been set as the yardstick for the calculation of the globalization index. The three main indicators are economic, social and political connectedness. These three elements constitute the main indices, and their subtypes are derivatives of them. This can include the indices of economic flows and restrictions, information flows and cultural proximity.

The current index is based upon data that has been compiled and updated through the years 1970 to 2013.

Globalization Index and Business

One of the main things that the Globalization index has an effect on is the business and the investment ecosphere. The importance of this parameter can be predicted from the case that giants like Ernst and Young have developed their own globalization index. Famous analysts like COO John Ferraro EY have given their thoughts. They believe this index has a- major influence in driving business decisions.

The impact on business can be judged as the capital flow can be predicted. The rate of globalization is not uniform and one of the main factors aiding globalization is technology. It has also come to light that the dispersion of skillful talent across the globe is not uniform. This is vital information for business leaders who can use it to transform their economic setups.

Actionable Tips

Business leaders of today and tomorrow would be decided on the account that who understands the global market in a better manner. Those who are able to modify and adjust their businesses accordingly will remain upfront.

Factors like risk assessment, capital flow, technology acquisition and similar ones can be understood from the globalization index. The important thing to understand is that the magnitude of information that available is unprecedented. It is dependent on perception, as how to translate it into higher profits.

In the current status quo, there is constant shift from fast growth to slow growth and then back again. In order to make the most out if, investors and businessmen need to be on the look for newer avenues.

As for globalization, the ecosphere of the market can change in no time. The main plot holder is technology and how efficiently is one able to use it. For instance, business analytics has evolved greatly and now it is possible for investors to study various outcomes and opt for the best one based on scientific data, rather than hunches. Social networking also aids the information flow which can be translated to profits.

The bottom line is that parameters like Globalization Index are an information avenue for investors and businessmen. Not only are these metrics informative, but also definitive for business strategy.