In this article, we will look at the 25 most globalized countries in the world. If you want to skip our in-depth analysis, head straight to the 5 Most Globalized Countries in the World.
Globalization in 2023
In the rich tapestry of globalization, countries often find themselves interdependent and connected. The essence of globalization has gained immense traction in recent years. On July 11, Harvard Business Review reported on the status of globalization in 2023. The report discusses how the world economic status has grown after a long period of decline post-COVID. In mid-2022, world trade grew 10% above pre-pandemic levels. Despite poor global economic growth during the last quarter of 2022 and the first quarter of 2023, the International Monetary Fund predicts world trade will grow by 2.4% by the end of 2023.
The implications of COVID-19 had only begun to die down when the Russia-Ukraine conflict surged. Russia, a major trade partner for the rest of the world, especially Europe, ultimately limited the flow of goods and services. With a decline in foreign direct investments and a lack of trust in global currencies, the world’s economic conditions worsened. However, the decline is less strong than during the coronavirus pandemic. Therefore, economists predict that the impact of the war on world trade will eventually die down, and the world economy will grow back in the fourth quarter of 2023 and the first half of 2024.
Is Reverse Globalization the New Trend?
Globalization occurs when businesses begin to sell and produce their products to markets across borders. While more and more countries continue to engage with each other, concerns related to the impact of globalization on domestic economies are growing. Some countries have begun to restrict imports from developed economies primarily to protect local businesses and cultures. However, globalization is here to stay.
“Think Global, Act Local” was first coined in 1915 by Patrick Geddes. This term reflects the status of globalization as of today. While it is true that globalization has hurt local businesses and developing economies, this does not mean that countries would go back to the pre-globalization era. The term “Think Global, Act Local” is a concurrent phenomenon worldwide.
“Think Global, Act Local” means that companies fixate on global markets while they alter their products to fit local tastes and culture of the region they are operating in. This phenomenon has enabled companies to penetrate untapped markets and grow their business globally. Companies are highly invested in empowering communities across the globe. These companies are more than interested in garnering support and awareness from global markets.
The incidence of social media has allowed companies to transgress international markets and learn more about consumer behavior without having to spend millions. According to a report by Forbes published on May 18, 77% of businesses use social media to reach and connect with customers. Moreover, over 90% of social media followers follow at least one brand on social media, and 76% of social media users have purchased an item through social media. Such indicates that the world is getting closer to each other in a virtual space, limiting discrepancies and making it easier for firms to target global markets.
How Do Companies Race to Become Global?
Thinking globally but acting locally is no less of a challenging task. It requires huge amounts of capital and knowledge of international markets. A few companies are leading the global market by acting globally and thinking locally. Such companies usually experience high returns and have mastered the art of catering to global markets. Such examples include GSK plc (NYSE:GSK), Shell plc (NYSE:SHEL), and McDonald’s Corporation (NYSE:MCD). You can also view other global stocks to invest in.
GSK plc (NYSE:GSK) is a pharmaceutical and biotechnology company based in the United Kingdom. The company has its headquarters based in London. The company is a pioneer in innovating medicine. On March 31, Reuters reported that the company recently signed deals with companies allowing them to produce cheaper versions of their HIV medicine. The company did this to make the medicine available to the masses, especially in developing economies. The companies involved in the production are Aurobindo Pharma, Cipla, and Viatris. The aim of doing so was to propagate the mass availability of the medicine for the global market. You will often find companies enhancing their global supply chain and distribution.
Shell Plc (NYSE:SHEL) is a global oil and gas industry leader. The company has its headquarters based in London, United Kingdom. The company differentiates itself from others based on its commitment to society and the environment. On June 14, the company reported that its primary goal was to enhance value to its customers and shareholders by prioritizing an intended decline in emissions and a balanced energy transition. To shed light on this, Wael Sawan, the chief executive officer, stated:
“We are investing to provide the secure energy customers need today and for a long time while transforming Shell to win in a low-carbon future. Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions while enabling the energy transition.”
By 2025, Shell Plc (NYSE:SHEL) aims to become a net-zero emissions energy business. The company plans to invest $10-15 billion between 2023 and 2025 to build on more energy-efficient solutions such as biofuels, hydrogen, electric vehicle charging, and carbon capture storage to achieve this goal.
McDonald’s Corporation (NYSE:MCD) is leading the way with its global strategy. The company is known to tailor its menu and offerings based on local tastes and cuisines. From breakfast broth in Hong Kong to a past fried chicken combo in other parts of the world, McDonald’s believes their global success comes from satisfying customers across borders. On February 29, CNBC reported the rise of McDonald’s Corporation (NYSE:MCD) in China. The company is set to open 1,900 stores by the end of this year, with half of them located in China. The company’s rising success in China comes from the McDonald’s Corporation’s (NYSE:MCD) ability to adapt to local tastes. McDonald’s is also among the top fast-food restaurants.
Companies heavily contribute to the global economy. In fact, they keep countries connected. With that, let’s discuss the 25 most globalized countries.
Pixabay/Public Domain
Our Methodology
Globalization refers to the process by which organizations and businesses gain international influence. International trade and foreign direct investment for a country are two different ways to assess countries’ influence over each other. We sourced our data from The World Bank for both metrics. Both metrics correspond to an equal weight for our ranking. We chose the top 25 common countries of the two lists to shortlist our data. We tried to ensure our data consists of the most recent value available. The year is mentioned against each metric. The ranking is in ascending order.
25 Most Globalized Countries in the World
25. India
International Trade as a Percentage of GDP (2022): 49%
Foreign Direct Investments as a Percentage of GDP (2022): 0.4%
India is emerging as one of the fastest-growing economies in the world. The country is highly open to foreign trade and foreign investments and therefore ranks as one of the most globalized countries in the world.
Companies that are at the forefront of globalization include GSK plc (NYSE:GSK), Shell plc (NYSE:SHEL), and McDonald’s Corporation (NYSE:MCD).
24. Canada
International Trade as a Percentage of GDP (2022): 67.3%
Foreign Direct Investments as a Percentage of GDP (2022): 3.8%
Canada is known for being one of the most globalized countries in the world. The country is home to people from all over the world. With a strong communications and IT network and a globally friendly economy, Canada ranks as the 24th most globalized country in the world.
23. United Kingdom
International Trade as a Percentage of GDP (2022): 68.9%
Foreign Direct Investments as a Percentage of GDP (2022): 5.2%
The United Kingdom, a prominent member of the global economy, ranks as one of the most globalized countries in the world. The country is also among the biggest exporters and importers in the world.
22. France
International Trade as a Percentage of GDP (2022): 72.1%
Foreign Direct Investments as a Percentage of GDP (2022): 3.1%
France, a major tourist hub, is one of the most globalized countries in the world. The country is a major player in global economics and continues to experience an increase in trade.
21. Italy
International Trade as a Percentage of GDP (2022): 75.8%
Foreign Direct Investments as a Percentage of GDP (2022): 0.4%
Italy is a major player in the global industry. The country is a founding member of the European Union and has strong economic ties with the rest of the world.
20. Spain
International Trade as a Percentage of GDP (2022): 81.7%
Foreign Direct Investments as a Percentage of GDP (2022): 3.1%
Spain owns a diversified economy by pioneering the manufacturing, pharmaceuticals, and financial services industries. With a large investment in trade, Spain ranks as one of the most globalized countries in the world.
19. Norway
International Trade as a Percentage of GDP (2022): 83%
Foreign Direct Investments as a Percentage of GDP (2022): 2.6%
Norway is one of the most globalized countries in the world. The country specializes in exporting oil and mineral fuels, seafood, and aluminum.
18. Finland
International Trade as a Percentage of GDP (2022): 92.5%
Foreign Direct Investments as a Percentage of GDP (2022): 4.7%
Finland, also one of the happiest countries in the world, is known for being one of the most globalized countries. Primary exporting sectors in Finland include transportation, electronics, forestry, and chemicals.
17. Iceland
International Trade as a Percentage of GDP (2022): 93.6%
Foreign Direct Investments as a Percentage of GDP (2022): 0.5%
Iceland has a rapidly growing economy and is also among the most globalized countries in the world. The Icelandic economy is built on aluminum smelting, fishing, and tourism.
16. Germany
International Trade as a Percentage of GDP (2022): 98.6%
Foreign Direct Investments as a Percentage of GDP (2022): 4.4%
Germany is among the most globalized countries in the world. The country is also one of the largest economies in the world and in Europe. Being an economic hub, the country is an attractive option for global investors.
15. Sweden
International Trade as a Percentage of GDP (2022): 102.7%
Foreign Direct Investments as a Percentage of GDP (2022): 11%
Sweden enjoys one of the highest standards of living. The country engages in extensive trade and thus is an attractive option for international investors. With such a high record of international trade, the country is among the most globalized countries in the world.
14. Greece
International Trade as a Percentage of GDP (2022): 107%
Foreign Direct Investments as a Percentage of GDP (2022): 0.9%
Greece, a popular tourist hub, is also one of the most globalized countries in the world. The tourism industry contributes heavily to the country’s rank.
13. Austria
International Trade as a Percentage of GDP (2022): 120.1%
Foreign Direct Investments as a Percentage of GDP (2021): 4.4%
Austria is known for exporting vehicles, engines, machine parts, pharmaceuticals, and beverages. With their high engagement in international trade, Austria is among the most globalized countries in the world.
12. Poland
International Trade as a Percentage of GDP (2022): 122.3%
Foreign Direct Investments as a Percentage of GDP (2022): 1%
Trade and investment have been key contributors to the country’s rank as one of the most globalized countries in the world. Poland also enjoys strong economic ties with the rest of the world.
11. Denmark
International Trade as a Percentage of GDP (2022): 128%
Foreign Direct Investments as a Percentage of GDP (2022): 7.2%
Denmark’s economy is heavily based on the service industry, international trade, and manufacturing. The country’s prominent engagement in trade contributes to the country’s rank as one of the most globalized countries in the world.
10. Czechia
International Trade as a Percentage of GDP (2022): 149.8%
Foreign Direct Investments as a Percentage of GDP (2022): 1.1%
With a huge international trade-to-GDP ratio, Czechia ranks as the 10th most globalized country in the world. The country specializes in the export of cars and motor vehicle parts and accessories.
9. Switzerland
International Trade as a Percentage of GDP (2022): 137.7%
Foreign Direct Investments as a Percentage of GDP (2022): 1.04%
Switzerland enjoys a very high standard of living, and therefore, is a prominent member in global trade. The country is home to the headquarters of many leading companies, and therefore, holds strong connected ties with the rest of the world.
8. Estonia
International Trade as a Percentage of GDP (2022): 171.6%
Foreign Direct Investments as a Percentage of GDP (2022): 5.2%
Estonia enjoys a huge telecommunications and electronics industry. Moreover, with strong regional trade ties, Estonia ranks as one of the most globalized countries in the world.
7. Netherlands
International Trade as a Percentage of GDP (2022): 175.9%
Foreign Direct Investments as a Percentage of GDP (2022): 8.4%
The Netherlands stands as the 7th most globalized country in the world. Based in Europe, the country connects to all other countries in the region.
6. Cyprus
International Trade as a Percentage of GDP (2022): 183.4%
Foreign Direct Investments as a Percentage of GDP (2022): 9.2%
The tourism industry is huge in Cyprus. In fact, it is a major contributor to the economy of Cyprus and also contributes to the rank of the country as one of the most globalized. Refined petroleum and pharmaceutical products are the primary exporting goods of the country.
Some of the most notable global stocks to buy according to hedge funds include GSK plc (NYSE:GSK), Shell plc (NYSE:SHEL), and McDonald’s Corporation (NYSE:MCD).
Click to continue reading and see the 5 Most Globalized Countries in the World.
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Disclosure: None. 25 Most Globalized Countries in the World is originally published on Insider Monkey.