DHL Global Connectedness Index 2014

68 4. The Breadth of Global Connectedness
Figure 4.11 Merchandise Exports Average Distance Traversed (in kilometers) and % Intra-regional,
and Proportion of World GDP Generated by Emerging Economies, 1980–2013
6,000
70%
5,000
60%
4,000
50%
40%
3,000
30%
2,000
20%
1,000
10%
0
0%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Distance (Left Scale) % Intra-regional (Right Scale) Emerging Economies % of World GDP (Right Scale)
The regionalization of merchandise exports began falling after 2003, when emerging economies’ shares of world GDP started surging upward.
from North America and Europe (even with constant
shares) traversed 7% and 5% greater distances respectively
in 2013 than in 2005, while exports from advanced
economies in Asia traversed shorter distances (Taiwan 11%
shorter, Singapore 7%, South Korea 6%, Japan 5%). This
distinction provides a valuable reminder that, particularly
when undertaking geographic analysis, a shift toward
emerging economies in general is often better understood
as a shift specifically toward Asia. The earth’s economic
center of gravity has shifted from somewhere in the mid-
Atlantic in 1980 to somewhere in Turkey today and it will
be somewhere more than halfway across Asia (probably
somewhere in China or between China and India) by
2050. 10
Distance and regionalization—like breadth and concentration—are
measures of countries’ international interactions
for which there is neither a general prescription to increase
nor decrease. However, the differences among regions
described here in the context of merchandise exports
do suggest that recommendations would tend to vary by
region. In light of Asia’s rising share of economic activity,
countries (and firms) in other regions should generally
increase their capacity to tap into distant opportunities,
while those within Asia may benefit from increasing focus
on their neighbors.
The Real Distance Between Advanced and
Emerging Economies
That advanced economies have not been able to redirect
their international interactions toward emerging economies
on pace with those economies’ growth is not surprising,
when one considers the range of cultural, administrative/political,
geographic, and economic (“CAGE”)
distances and differences between advanced and emerging
economies. Selected differences are presented on
Figure 4.13. The most obvious differences, of course, are
emerging economies’ lower per capita incomes ($6,968 on
average in 2013 as compared to $42,925 across advanced
economies) and faster real growth rates (4.6% versus 1.8%
from 2003 to 2013). 11 And there are also other economic
differences. Emerging economies average larger shares of
value added coming from agriculture and smaller shares
from services, more volatile GDP growth, and higher levels
of inequality.
Emerging economies also differ from advanced economies
culturally, administratively, and geographically. Culturally,
people in emerging economies report that they accord work
a higher priority in their lives, presumably an advantage for
employers. However, generalized levels of trust are lower in
emerging economies, which complicates all sorts of business
dealings, and societies are typically more hierarchical,
implying differences in the styles of leadership that will be
most effective. 12 Emerging countries are also, on average,