Network Analysis and Globalization
The article, “The Physicist Who Sees Crime Networks,” is particularly interesting because it details how we can apply network analysis to understand global trade. With globalization redefining the dynamics of business and the flow of people, processes and products, one man in Japan is using network analyses to study the interconnectedness of economic and social systems.
Takayuki Mizuno’s insight was first made following Japan’s 2011 Tōhoku earthquake and subsequent tsunami. The earthquake caused catastrophic supply chain damages, which in turn had resounding effects worldwide. Mizuno wanted to map exactly how businesses around the world would interact with one another in order to predict – or perhaps even mitigate – the effect of the next natural disaster. To do so, Mizuno created a ‘web crawler’ that goes to S&P Capital IQ’s website, which contains data on nearly 425,000 companies in 217 countries including their suppliers and customers, and downloads each companies’ business relationship list.
Mizuno’s network findings are fascinating. He found that businesses operate rather similarly to people. Mizuno found that 80 percent of the world’s firms could be connected to any other business via six customers or suppliers. Therefore, there is a high degree of clustering in the global business network, and I would not be surprised to see that many of the world’s largest corporations, especially banks and technology companies, have strong triadic closure with companies with local focus across many industries.
Mizuno’s research is truly groundbreaking. One day, Mizuno’s model will allow policy makers to build a map of connectivity in and among firms in Europe, and anticipate what that network would look like after the U.K.’s exit from the EU, for example. This information allows policy makers and businesses alike to make more informed decisions based on the potential fallout in existing communities. Mizuno is now applying the same concept to track the flow of drugs and crime across the globe, an important application of his research in the age of globalization and technology. In the global economy, I believe network analyses like Mizuno’s will lead to a world where public policy decisions are more black and white, based on data analytics and quantified cause-effect relationships. Mizuno is now applying the same concept to track the flow of drugs and crime across the globe, an important application of his research in the age of globalization and technology. This could help curb the rapid increase in anonymous online drug-distribution networks.
https://backchannel.com/the-physicist-who-sees-crime-networks-fb6478536e8f#.chqxav4yf