What is "Global" in "Globalization"?

Pankaj Ghemawat's blog has some interesting - and revealing - statistics about Globalisation.
(for those who are not in the know, Pankaj Ghemawat is a Prof at Harvard Business School, and currently on sabbatical with IESE, Barcelona)

In one of his posts, Globalization Myth vs Reality, he mentions:

"...most types of economic activity that could be carried out within or across national borders are actually still concentrated domestically... of all the capital being invested around the world, how much is foreign direct investment by companies outside of their home countries?... The fact is, the ratio is generally less than 10% and, while it may be pushed higher by merger waves, has never reached 20%."

He goes one to put some statistics on key parameters of cross-border activities - telephone calls, long-term migration, university enrollment, stock investment, and trade as a fraction of gross domestic product (GDP) - look at the blue bars in the diagram below. "they fall much closer to 10% than the levels close to 100% that one would expect if one took the gurus of globaloney at their word."

and what are the figure shown by the green bars?

"... 400 respondents to a poll about globalization levels on HBR.org came up with the responses summarized in green in the chart... Note the systematic tendency to overestimate globalization levels, and by a wide margin: the responses (the green bars) averaged 30% versus real values (the blue bars) that averaged 10%. And to aggravate matters, respondents with more than 10 years’ experience actually are farther off the mark than ones with less experience!

So perhaps, "Globalisation" is not so global, as the hype around it show.... Or as Pankaj Ghemawat puts it:

"...managers assume the world to be more globalized than it actually is..."

However,, there is one parameters, which Ghemawat seems to neglect in his analysis:

The movement of the most unregulated commodity - currency/Forex - across borders

Bank of International Settlements' Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in 2007

Daily "turnover in traditional foreign exchange markets increased by 71% between April 2004 and April 2007 to reach $3.2 trillion."

$3.2 trillions/day!!!

... Which is quite a global activity, considering that according to WTO's International Trade Statistics 2007:

the entire inter- and intra-regional annual merchandise trade in 2006 was $11.8 trillions (of this around $6.5 trillions was intra-regional trade - i.e., only $5.2 tillions of trade accounts for annual international merchandise trade)

add $2.8 trillions which is the value of world exports of commecial services

..and the value of entire annual world global trade in merchandise and commercial services turns out to be $9 trillion....

Or in other words, global trade of Forex in 3 days exceeeds the annual global trade of goods and services!!

A couple of years back, I had made a post on this global trade - Living in a Global Casino - and how it differs from other trade activities:

"The FX market also differs from investments in goods and services, in that speculators make money from money alone. No jobs are created and no services provided. The losers are often those least able to pay the price - the poor and marginalised who are the victims of financial crises triggered by (a) "capital account convertibility", normally a condition for loans by the international financial institutions, and (b) the rapid withdrawal of funds from emerging economies by speculators."