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Borderless Society - Long Way Off

Pankaj Ghemawat, a professor at IESE Business School in Barcelona, Spain, says national borders still exert a strong-enough force to prevent the world from becoming fully globalized.

He estimates only 10% of any given activity in the world that could occur across borders actually does so. And less than 10% of the world’s capital formation was generated by foreign direct-investment between 2002 and 2005.

Trade might have grown between countries, but preferences for trading with fellow countrymen stubbornly persist. For example, despite the creation of the North American Free Trade Agreement in 1994, trade between Canadian provinces is five times larger than their trade with similarly sized and similarly distant U.S. states.

Even in the apparently borderless realm of cyberspace, internet traffic within countries is rising at a faster rate than traffic across borders.