New Globalization: Who Gains, Who Gets Left Behind?

Supply chains are rewiring quietly. Here’s how that changes the game for small and big countries – and for the middle class.

Hi everyone,

this is the third article in our mini-series based on my new book Transition Science in the Economy. After looking at the Green and Digital Transitions, today we turn to New Globalization – not deglobalization, but a quieter rewiring of supply chains, alliances and power.

In this edition we’ll explore:

1. why trade didn’t disappear, it just changed shape,

2. how this New Globalization creates new winners and leaves regions behind, and

3. what this means for small vs big countries – and for your own middle-class security.

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We were told globalization was over.

Trade wars.
Brexit.
Pandemic shocks.
Geopolitics on fire.

And yet, when you look at the data,
trade flows and cross-border investment are still huge.

So which is it?

Is globalization dead,
or more alive than ever?

The answer that emerges from the AWTY data is simple:

We are not in “deglobalization”.
We are in New Globalization.

And it comes with a very different map of winners, losers and middle-class risks.

New Globalization is not less trade. It’s rewired trade.

Old globalization was built on a simple story:

• move production to where it’s cheapest,

• ship goods back to rich consumers,

• everyone gains in the long run.

That story is broken.

Costs still matter.
But now countries and firms also worry about:

• security of supply,

• geopolitical alignment,

• control over strategic technologies.

Instead of pure offshoring,
we get friend-shoring and near-shoring.

Instead of one big global market,
we get overlapping blocs and corridors.

This is New Globalization.

What I measure when I say “New Globalization”

In the AWTY Transition Index, the New Globalization score tracks how exposed and how strategic countries are in this new landscape.

The indicators are drawn from World Bank, IMF, UN Comtrade, OECD and related datasets, with public, comparable series on trade, investment and exposure.

Roughly, think of four blocks.

1. Trade openness and concentration

   • How large is trade relative to GDP?

   • How concentrated are exports and imports in a few products or partners?

2. Position in global value chains

   • Does the country sit at the low-value end (assembly, commodities)
     or at the high-value end (design, standards, IP, services)?

3. Strategic dependencies and resilience

   • How dependent is it on a few partners for critical inputs (energy, minerals, tech)?

   • How diversified and resilient are its suppliers?

4. Rewiring capacity

   • Can the country pivot when shocks hit?

   • Does it have logistics, institutions and finance to adapt supply chains, not just suffer them?

Put together for 180+ countries (1990–2024), this gives each economy a New Globalization score.

On its own, the score is useful.
But when we connect it to jobs, wages and debt, we see how New Globalization feeds the middle-class squeeze.

How New Globalization squeezes the middle class

In the old story, globalization was supposed to lift all boats.

In practice it lifted some yachts and sank quite a few small boats.

New Globalization continues this pattern, but with extra tension.

Three mechanisms show up repeatedly in the data.

1. Supply-chain shocks as a tax on stability

The pandemic, the war in Ukraine, and Red Sea disruptions all had something in common:

• the actual events were limited in space,

• the price effects were global.

Every shock turns into:

• higher prices for essentials,

• more volatility for firms,

• and uncertainty about jobs and projects.

For highly leveraged households, and for middle-income firms with thin margins, this volatility acts like a hidden tax on stability.

You don’t always lose income, but you lose predictability.

That’s enough to make medium-term planning almost impossible.

2. Friend-shoring that leaves regions behind

When big firms and countries “rewire” supply chains, they don’t move everything everywhere.

They pick a few favoured locations:

• friendly jurisdictions,

• with good infrastructure,

• attractive incentives.

Regions that get picked can experience a boom.

Regions that don’t see factories close or shrink, with few alternatives.

From the perspective of the middle class, New Globalization means:

• some cities become hubs,

• others become peripheral to the periphery.

If your skills, property and networks are anchored in the “wrong” place, your personal transition risk explodes.

3. Strategic competition crowding out social investment

As states worry about semiconductors, critical minerals, defence supply chains, they pour money into strategic industries.

Some of this is necessary.
But there is a trade-off.

If budgets tighten, something gets squeezed:

• education,

• health care,

• housing,

• or local infrastructure.

This is how New Globalization can indirectly erode the middle class:
not because trade disappears, but because the way we compete for trade diverts attention and money from services that sustain everyday security.

Small vs big countries: different traps

One of the most interesting patterns in the AWTY data is the contrast between small and big countries.

• Some small countries use New Globalization
  to specialise in logistics, finance, digital or regulation.
  They plug themselves into key corridors.

  If they manage housing and inequality well,
  their middle class can do quite well.

  If they don’t,
  they become ultra-global hubs with local residents priced out.

• Many big countries rely on size and internal markets.
  They have more buffer,
  but can be slower to adapt.

  When shocks hit supply chains,
  entire regions can be exposed to sudden industrial decline.

For both, the risk is the same:

Being global enough to import volatility,
but not strategic enough to shape the rules.

That’s what I call a New Globalization trap.

When New Globalization meets the other transitions

New Globalization doesn’t act alone.

It interacts with:

• the Green Transition (critical minerals, energy routes),

• the Digital Transition (data flows, platform power),

• the War Economy (sanctions, arms, alliances),

• the Housing Crisis (global capital into local real estate).

Some of the most fragile profiles in the index are:

Open economies with high exposure to shocks,
weak housing and war-economy readiness,
and a digital sector dominated by foreign platforms.

On slides, they look like
“successful, open economies”.

On the ground, their middle classes live with:

• higher price volatility,

• more job uncertainty,

• and an ever-present sense that the rules are set elsewhere.

How to navigate New Globalization without losing the middle class

In Transition Science in the Economy, I don’t argue for autarky or nostalgia.

Global trade is not going away.

The question is:

How can countries stay connected
without turning their middle classes
into shock absorbers for every crisis?

The data point to a few principles.

1️⃣ Diversify for resilience, not for press releases.
Diversification is only real if you can actually switch suppliers and routes without huge delays and costs.

That means investing in ports, rail, digital infrastructure, and institutional capacity to manage crises.

2️⃣ Build local buffers around global links.
If you plug deeply into global chains, you also need local safety nets:

• unemployment insurance that works,

• retraining that leads to real jobs,

• regional policies that don’t abandon “loser” regions.

3️⃣ Be strategic about specialisation.
Chasing every industry is a recipe for weakness.
New Globalization rewards countries that pick a few strategic roles and support them consistently.

This makes it easier to negotiate better terms,
instead of competing mainly on cheap labour or lax rules.

4️⃣ Protect essential goods and services.
Some goods and services are too critical to be fully exposed to global chaos:

• basic food,

• energy,

• health,

• core digital infrastructure.

Keeping some redundancy here is not inefficiency.
It’s insurance.

In the book, I use the New Globalization scores to show where these principles are respected and where they are ignored.

That’s part of developing transition literacy:
Seeing global headlines not as random storms, but as the predictable outcome of structural choices.

How this fits into the bigger picture

New Globalization is the third pillar in the five-transition framework of the book:

• Green Transition

• Digital Transition

• New Globalization

• Return of the War Economy

• Housing Crisis Transition

Individually, each transition can be justified.

Together, if mismanaged,
they can collapse the middle class and lock countries into new development traps.

In Transition Science in the Economy,
I use the AWTY Transition Index to map these patterns across 180+ countries
from 1990 to 2024.

If you want a clearer sense of where your country stands
– and what might come next –
the book is my best attempt at a practical compass.

📘 Transition Science in the Economy:
How Five Global Shifts Are Collapsing the Middle Class and Rewriting Prosperity and Power
→ Amazon

Next in this series
we’ll look at the Return of the War Economy
and how defence, security and dual-use innovation change the rules of economic transitions.

Because New Globalization is not just about containers and tariffs.

It’s about who writes the rules,
and whether the middle class still has a seat at the table.