Globalization Metrics & Measurements

As distance has become less of a hindrance to segmenting and relocating business processes, the international trading system has become more dynamic, flexible, responsive and complex. New, previously unimagined business models have arisen to leverage and arbitrage globally “distributed” capabilities, labor markets, regulatory regimes, and markets. Producing for global markets provides opportunities for scale — even in narrow segments of the value chain — that never existed when markets were only local, domestic or regional. Internet retailing allows individual shoppers to assess and purchase the wares of sellers the world over. What we are witnessing is not a simple fragmentation of existing industrial systems but a basic transformation of how buyers connect to sellers, how work is accomplished, how production is organized, and how distribution is coordinated.

The greater scale, complexity, and transformational potential of economic globalization demand that we ask more from our economic statistics. Because the picture provided by current official statistics is incomplete, the causal links to economic welfare indicators such as employment and wages tend be weak and unconvincing, allowing a set of highly charged, politically motivated, and unproductive debates over the basic facts of economic globalization to flourish. New thinking and new data will be required to develop clear, incontrovertible, evidence-based insights into the character and implications of economic globalization.

IPC researchers have helped to develop data collection frameworks that are being tested in their own research and by international a national statistical agencies. They are advising statistical agencies on ways to systematically differentiate arms-length trade from intra-group trade and external international sourcing, ways to track services trade in more detail, ways to determine the real location of value added, and ways to differentiate globally-engaged from non-globally-engaged enterprises so the performance of these very different segments of national economies can be tracked in terms of profits, innovation, employment, and wages paid. Old and new data sources must be better harmonized, integrated, and linked, not only to each other but to “international business registers” that identify the ownership structures of enterprises across borders and link to detailed information on employment, investment, and economic performance.