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A popular trope in recent years has it that we are witnessing the end of an era of globalisation. That may turn out to be true.
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But it's probably not the end of globalisation that we're seeing. It's the advent of a new era of globalisation, in which data flows are the new shipping containers.
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Between 2008 and 2013, cross-border internet flows grew sevenfold. And by 2025, they predict those cross-border flows could be worth more than the current global trade in goods, or some $20 trillion. Much of that is obvious. It has to do with new technologies like the smartphone.
But our cars are data emitters, too. Drive a new Audi or a BMW, and you'll find it's sending data back to engineers in Germany. We live in an age where the global trade in some spare parts just means sending an email file to a bank of 3D printers in a far-off land.
Of course, that assumes that governments don't get in the way, but we are already seeing the advent of digital protectionism. China's great firewall is as much about protecting local high-tech industries and [INAUDIBLE] like Alibaba from international competition as it is about censorship. Across Asia, Europe, and the Middle East, governments are using privacy rules to restrain data flows and requiring companies to keep local servers.
Research has shown digital protectionism can restrict a nation's GDP growth by up to 1.7 percentage points. So the next major trade battle could well be over data localisation. Call it globalisation 3.0 if you want, but a new era is definitely taking hold.