With the start of the 21st century less than two weeks away people are focussing on the changes the new millennium represents.
But the next century will begin with the world economy enjoying more similarities with the early decades of the 1900s.
Zurich Financial Services Group global economist David Halesays most people consider the process of globalisation to be relatively new.
"But it was well underway during the closing decades of the 19th century and then stopped in much of the world for nearly eight decades because of the First World War and its impact on geopolitics."
He says that in the half-century before 1914 there were tremendous capital flows between Europe and the developing countries through securities markets. The British financed much of the United States, Canada, Australia and Argentina through the purchase of debt and equity listed on stock exchanges.
Fast-forward to 1999 and the globalisation theme is one which is highlighted by most investment strategists. One of the main differences this time is that it is fuelled by technology.
Spicers director George Kerr says the world's economies have become increasingly interconnected through trade, goods, services, investment people and ideas, giving rise to new forms of competition and cooperation among firms.
"This trend will continue into the next century as the world continues to strive for global efficiency and increased productivity."
He says that information and communication technology has played a big role in the globalisation of markets and underpins the expansion of international trade in goods and services and investment flows.
"Its influence will become increasingly evident as the demands of modern-day living mean we need to become 'wired' to get the most out of life."
Mr Hale says the world economy is reconverging with the era before 1914 because of the political revolutions that have swept through the Soviet Union and many developing countries. This has seen the broad acceptance of the market economy in allocating resources and increasing competition.
Perhaps the key message is that people need to reconsider how their portfolio is structured and that they need to take a global approach to investment.
* Philip Macalister is the editor of online money management magazine Good Returns. It provides news on managed funds, mortgages, superannuation and financial planning (www.goodreturns.co.nz).
