SAN FRANCISCO – Global trade still conjures images of giant container ships. But our world has changed. The transport of physical goods across borders is no longer the only, or even the primary, driving force behind global integration. Instead, we are increasingly connected by flows of intangibles, services, and talent. From the cloud-based applications that companies use to manage customer relations to the research that led to the development of the COVID-19 vaccines, knowledge is binding our world together.
As we show in a new report, global flows associated with know-how have taken the baton from manufactured goods, resources, and capital – the primary drivers of interconnection until the late 2000s. Between 2010 and 2019, international trade in services, intellectual property, and education grew twice as fast as trade in goods. Cross-border data flows – the fuel of the digital era – have exploded, increasing at an annual rate of 45%. In terms of trade in services, knowledge-intensive categories – including professional, government, IT, and telecommunications services – are growing most rapidly.