Nowadays, people have more opportunities to move to different parts of the world than ever before, thanks to globalization. Global trade, therefore, is changing with the increasing mobility. A new report says that, while the last era of globalization was driven largely by sourcing low-cost production, the next era will center on the rise of the global knowledge economy.
The exchange of knowledge-intensive goods such as aircraft, automobiles, pharmaceuticals, and professional services is significantly expanding. Its share in global trade rose at nearly an eight percent annual rate from 2002 to 2012, compared to 6 percent for both lower-tech, capital-intensive goods and labor-intensive goods. In 2012, knowledge-intensive flows reached $12.6 trillion - more than the combined 2012 GDP of China and Germany.
This increase is most likely due to the improvement of digital technologies. The spread of the Internet is changing many facets of the global economy. Businesses are more interconnected than ever before. A study has shown that international Skype-call minutes grew to 40 percent of the present level of traditional international calls, in just a decade. Cross-border trade now represents 10 percent of trade in goods. Businesses and people alike are moving into a new economic era with advanced technology.
As the buying power of emerging countries is rising and as those markets become more open, new centers of consumer demand are emerging. Developing economies now represent 38% of global flows, nearly triple their share in 1990. The traditional trade in goods is not enough to keep pace with the increasing global economy. Trade in intellectual property and human capital thus becomes more important and essential in the world economy.
The pattern of global trade is becoming more complex as a result of the increasing demand of emerging markets and the expanding web of connection. Opportunities are embedded in this large global economy. All participants in global flows need to take full advantage of smart strategies and policies to avoid falling behind.