Deglobalization in a hyper-connected world

Abstract

In the age of hyperconnectivity, we are undergoing an explosive increase in the interdependence of the political, commercial, financial, and social spheres. The recent rise of deglobalization movements across the world highlights the local negative externalities of poorly designed networked structures at the global scale: high social complexity derived from immigration shocks, elevated risk of contagion in financial downturns, as well as increasing inequality and social polarization. While global interdependencies on networks enable opportunities for cultural and economic growth, they also establish channels for unresolved conflicts and design errors to propagate across social systems. We analyze failure propagation on networks as a function of density and centralization of inter-dependencies. We show that the risk of failure in both overly distributed and centralized systems behave similarly when the number of connections exceeds a system-dependent threshold number. The scale of interdependencies matters and must be considered for the design of policies targeted at increasing or decreasing the connectivity of social systems.