Nationalism: Could digital technology offer hope for a new era of financial interconnectivity?
Global banks are in retreat. Some countries stand on the brink of exclusion from the conventional financial system.
Cross-border capital and lending flows are declining, albeit from previously unsustainable and dangerous highs. Trade is lagging even anaemic global expansion. Protectionism and nationalism are the rising political forces.
And yet away from war zones and populations suffering from the worst extremes of poverty, the digital economy makes most of us feel more inter-connected than ever before.
Is it to be our redemption?
A McKinsey report, Digital globalization: new era of global flows, attempts to measure the growth of cross-border flows in data, which it estimates have increased 45 times in the 10 years from 2005, even as trade and financial flows have flattened.
McKinsey contends that the cross-border bandwidth of data flows will grow by another nine times in the next five years as digital flows of commerce, information, searches, video, communication and intra-company traffic continue to surge. It suggests that data flows are already contributing more to GDP growth than cross-border flows of manufactured goods, and that data flows account for $2.8 trillion out of the total of $7.8 trillion of global GDP contributed by the combined cross-border flows of traded goods, FDI and data in 2014.