Interconnectedness means having links. Interdependence means relying on one another, and that reliance can be unequal.
A bag maker orders custom zips from an overseas supplier. They are connected by orders, payments and deliveries. If each relies on the other for its regular supplies or sales, the connection also involves interdependence. Sales revenue means money received from sales before costs are deducted; it is not the same as profit.
Interconnectedness describes links among people, businesses or countries. Interdependence goes further: they rely on one another for something, such as materials, services, knowledge, finance or customers. A contact list or a single message establishes a link but does not, by itself, show mutual reliance.
Interdependence does not mean equal dependence. One business may have several alternatives while its partner relies heavily on that relationship. Explain what each side needs and how easily it could obtain a replacement.
Worked example: Zips and repeat orders
A Singapore bag maker needs regular deliveries of custom zips from a Thai supplier. The supplier receives half its sales revenue from these orders. The bag maker has another approved supplier; the Thai supplier would need months to find a replacement buyer.
- Orders, payments and shipments link the two businesses. This is interconnectedness.
- The bag maker relies on the supplier for zips, while the supplier relies on the bag maker for a substantial part of its sales. Both rely on the relationship.
- The supplier faces greater difficulty replacing this business. Mutual reliance exists, but its strength is unequal.
Watch out for this
Any link between two countries proves that they depend equally on each other.
First identify an actual reliance, not just contact. Then examine each side separately; one may have more alternatives or depend on the relationship more heavily.
Check your understanding
Two schools in different countries exchange a newsletter once. The report gives no evidence that either school needs the other to carry out its activities. Which conclusion is supported?
- They are interconnected, but mutual reliance has not been established.
- They are equally interdependent because the exchange crosses a border.
- They are not interconnected because no physical goods were exchanged.