As the ‘old order’ of globalisation is being undermined by data flows, will localisation prosper?


Shawn Donnan of the FT reports that the volume of container traffic at ports in America, Europe and Asia has fallen and the value of goods traded around the world was 13.8% lower in 2014.

With the development of the digital economy there has been a shortening of global supply chains as some manufacturers are producing many of the intermediate parts that they once imported for assembly.

Localisation potential?

Instead of exporting production to low-cost countries, there is a surge in flows of cross-border data as new manufacturing technologies, including 3D printing are being used. Donnan notes, “the flow of digital information around the world more than doubled between 2013 and 2015 alone, to an estimated 290 terabytes per second”.

According to the McKinsey Global Institute, flows in finance and services have also fallen and a growing number of economists argue that this slowdown is a sign that the forces that have driven globalisation for decades are beginning to shift.

Some economists note that the plateau in worldwide trade in goods and capital has coincided with a surge in data flows — an indicator, they say, that the digital economy of the 21st century is starting to overturn the old order.

Next: A globalisation wanes, will localisation replace it?


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