Jamie Gray

Jamie Gray is a business reporter for the New Zealand Herald and APNZ wire agency

NZ 21st among 60 nations for globalisation

Broadband penetration key to country moving further up its index, says Ernst & Young.

New Zealand performed better in terms of movement of goods and services, movement of capital and finance, exchange of technology and ideas, and cultural integration. Photo / Dean Purcell
New Zealand performed better in terms of movement of goods and services, movement of capital and finance, exchange of technology and ideas, and cultural integration. Photo / Dean Purcell

New Zealand has been ranked 21st in a 60-country globalisation survey conducted by consultants Ernst & Young.

The survey ranks Hong Kong as number one and Iran at the bottom. Australia was ranked 24th and the United States 25th.

Ernst & Young's report draws on the international consultants' globalisation index, which measures the world's 60 largest economies according to their degree of globalisation, relative to their gross domestic product, and a survey of 750 senior business executives worldwide.

The index comprises five main categories - openness to trade, capital movements, exchange of technology and ideas, labour movements, and cultural integration.

Broadband penetration would be the key to New Zealand climbing further up the index, Ernst & Young said.

"We expect New Zealand to climb up into 12th position by 2016, helped by an exceptionally strong performance in technology, where it will top the ranking on broadband penetration."

New Zealand performed better than the global average in terms of movement of goods and services, movement of capital and finance, exchange of technology and ideas, and cultural integration.

But the country performed slightly lower than average for advanced economies, with a poor score in the movement of labour category.

New Zealand's overall ranking has not changed from 2011. Since then, the country has improved on broadband penetration, from 25.7 per cent to 30 per cent of the population, and internet subscriptions, 86 per cent to 88.8 per cent.

Ernst & Young said globalisation was increasing among a majority of the world's 60 leading economies, despite weak growth in 2012 and an uncertain economic outlook for many markets this year.

While most forecasters thought global GDP would be 3 per cent to 3.5 per cent in 2013, with a modest increase in subsequent years, the index suggested that globalisation would continue to advance, driven primarily by technology and the cross-border flow of ideas.

Improved globalisation scores in the past 12 months came from medium-sized, rapid-growth markets such as Vietnam, Malaysia, Thailand and the Philippines, as well as smaller European countries including Belgium, Slovakia and Hungary.

Ernst & Young's chairman and chief executive, Jim Turley, said globalisation would continue to define the business landscape, with increasing levels of cross-border trade, capital and labor integration.

"Despite the highly volatile economic backdrop, the trend for greater integration and closer co-operation continues to outweigh the threat of protectionism for the majority of the world's markets."

Turley said respondents pointed to the increasing challenges of operating in some Bric (Brazil, Russia, India and China) economies as well as slowing growth in some of these markets. "Nearly half of the survey's respondents expect an increase in protectionism in the Bric countries."

- APNZ

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