Pankaj Ghemawat,
a professor at IESE Business School in Barcelona, Spain, says
national borders still exert a strong-enough force to prevent the
world from becoming fully globalized.
He estimates
only 10% of any given activity in the world that could occur across
borders actually does so. And less than 10% of the world’s capital
formation was generated by foreign direct-investment between 2002
and 2005.
Trade might
have grown between countries, but preferences for trading with
fellow countrymen stubbornly persist. For example, despite the
creation of the North American Free Trade Agreement in 1994, trade
between Canadian provinces is five times larger than their trade
with similarly sized and similarly distant U.S. states.
Even in the apparently borderless realm of cyberspace, internet
traffic within countries is rising at a faster rate than traffic
across borders.
