The World Is Flat: Book Review
The World Is Flat: Book Review
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chances of living a prosperous and fulfilled life were much greater there. ''Now,'' Gates says, ''I would rather be a genius born in China than an average guy born in Poughkeepsie.'' Thomas Friedmans examination of the influences shaping business and competition in a technology-fueled global environment is a call to action for governments, businesses and individuals who must stay ahead of these trends in order to remain competitive. In a narrative punctuated by case studies, interviews and sometimes surprising statistics, Friedmans message is clear: be prepared, because this phenomenon waits for no one. Without rhetoric or scare tactics, he paints a picture of a world moving faster than most can keep up. As we explore Americas place in the fast-evolving world economic platform, Friedman presents not only the problems we face, but preventative measures and possible solutions. The World is Flat is an historical and geographical journey, with stories and anecdotes from the days of Columbus to a modern day Indian call center; from the Great Depression to the home office of a MidwesternUSA housewife demonstrating the pervasiveness of the world-flattening trend. Spanning a broad range of industries, cultures and schools of thought, the real-world examples presented as evidence of his theory are undeniable. From teleconferencing to podcasts and manufacturing to restaurant order taking, The World is Flat leaves no stone unturned in a quest for answers to a problem that most cannot even define. Friedmans dissection of globalization is a valiant attempt at explaining and understanding the forces driving the flattening of the world, though he admits that the very nature of beast prevents one from having all of the answers. This candor is in keeping with the theme of the entire book, in that we must learn how to learn, teaching ourselves to stay curious and innovative, if we are to excel in a global economy. The book is done in Friedman's trademark style. You travel with him, meet his wife and kids, learn about his friends and sit in on his interviews. Some find this irritating. I think it works in making complicated ideas accessible. Another Indian entrepreneur, Jerry Rao, explained to Friedman why his accounting firm in Bangalore was able to prepare tax returns for Americans. (In 2005, an estimated 400,000 American I.R.S. returns were prepared in India. ''Any activity where we can digitize and decompose the
value chain, and move the work around, will get moved around. Some people will say, 'Yes, but you can't serve me a steak.' True, but I can take the reservation for your table sitting anywhere in the world,'' Rao says. He ended the interview by describing his next plan, which is to link up with an Israeli company that can transmit CAT scans via the Internet so that Americans can get a second opinion from an Indian or Israeli doctor, quickly and cheaply. What created the flat world? Friedman stresses technological forces. Paradoxically, the dot-com bubble played a crucial role. Telecommunications companies like Global Crossing had hundreds of millions of dollars of cash -- given to them by gullible investors -- and they used it to pursue incredibly ambitious plans to ''wire the world,'' laying fiberoptic cable across the ocean floors, connecting Bangalore, Bangkok and Beijing to the advanced industrial countries. This excess supply of connectivity meant that the costs of phone calls, Internet connections and data transmission declined dramatically -- so dramatically that many of the companies that laid these cables went bankrupt. But the deed was done, the world was wired. Today it costs about as much to connect to Guangdong as it does New Jersey. As he moves towards the end of this presentation of his theory, Friedman warns of the forces that could seriously harm or slow the flattening of the world, particularly the threat posed by terrorist networks such as AlQaeda. His perspective is refreshing in a media driven largely by scare tactics and fear mongering as he encourages a realistic and objective approach to this threat. As people become more able to collaborate, compete and share with others of different cultures, religions, educational backgrounds and languages, The World is Flat is a necessary reality check to bring these factors into perspective and offer, if not answers to every problem, the drive to uncover working solutions. He ends up, wisely, understanding that there's no way to stop the wave. You cannot switch off these forces except at great cost to your own economic well-being. Over the last century, those countries that tried to preserve their systems, jobs, culture or traditions by keeping the rest of the world out all stagnated. Those that opened themselves up to the world prospered. But that doesn't mean you can't do anything to prepare for this new competition and new world. Friedman spends a good chunk of the book
outlining ways that America and Americans can place themselves in a position to do better. People in advanced countries have to find ways to move up the value chain, to have special skills that create superior products for which they can charge extra. The UPS story is a classic example of this. Delivering goods doesn't have high margins, but repairing computers (and in effect managing a supply chain) does. In one of Friedman's classic anecdote-as-explanation shticks, he recounts that one of his best friends is an illustrator. The friend saw his business beginning to dry up as computers made routine illustrations easy to do, and he moved on to something new. He became an illustration consultant, helping clients conceive of what they want rather than simply executing a drawing. Friedman explains this in Friedman metaphors: the friend's work began as a chocolate sauce, was turned into a vanilla commodity, through upgraded skills became a special chocolate sauce again, and then had a cherry put on top. All clear? Of course it won't be as easy as that, as Friedman knows. He points to the dramatic erosion of America's science and technology base, which has been masked in recent decades by another aspect of globalization. America now imports foreigners to do the scientific work that its citizens no longer want to do or even know how to do. Nearly one in five scientists and engineers in the United States is an immigrant, and 51 percent of doctorates in engineering go to foreigners. America's soaring health care costs are increasingly a burden in a global race, particularly since American industry is especially disadvantaged on this issue. An American carmaker pays about $6,000 per worker for health care. If it moves its factory up to Canada, where the government runs and pays for medical coverage, the company pays only $800. Most of Friedman's solutions to these kinds of problems are intelligent, neoliberal ways of using government in a market-friendly way to further the country's ability to compete in a flat world. There are difficulties with the book. Once Friedman gets through explicating his main point, he throws in too many extras -- perhaps trying to make that chocolate sundae -- making the book seem slightly padded. The process of flattening that he is describing is in its infancy. India is still a poor third-world country, but if you read this book you would assume it is on the verge of becoming a global superstar. (Though as an Indian-American, I read Friedman and whisper the old Jewish saying, ''From your lips to God's ears.'') And while this book is not as powerful as Friedman's earlier ones -- it
is, as the publisher notes, an ''update'' of ''The Lexus and the Olive Tree'' -its fundamental insight is true and deeply important. In explaining this insight and this new world, Friedman can sometimes sound like a technological determinist. And while he does acknowledge political factors, they get little space in the book, which gives it a lopsided feel. I would argue that one of the primary forces driving the flat world is actually the shifting attitudes and policies of governments around the world. From Brazil to South Africa to India, governments are becoming more market-friendly, accepting that the best way to cure poverty is to aim for high-growth policies. This change, more than any other, has unleashed the energy of the private sector. After all, India had hundreds of thousands of trained engineers in the 1970's, but they didn't produce growth. In the United States and Europe, deregulation policies spurred the competition that led to radical innovation. There is a chicken-and-egg problem, to be sure. Did government policies create the technological boom or vice versa? At least one can say that each furthered the other. The largest political factor is, of course, the structure of global politics. The flat economic world has been created by an extremely unflat political world. The United States dominates the globe like no country since ancient Rome. It has been at the forefront, pushing for open markets, open trade and open politics. But the consequence of these policies will be to create a more nearly equal world, economically and politically. If China grows economically, at some point it will also gain political ambitions. If Brazil continues to surge, it will want to have a larger voice on the international stage. If India gains economic muscle, history suggests that it will also want the security of a stronger military. Friedman tells us that the economic relations between states will be a powerful deterrent to war, which is true if nations act sensibly. But as we have seen over the last three years, pride, honor and rage play a large part in global politics.
The ultimate challenge for America -- and for Americans -- is whether they are prepared for this flat world, economic and political. While hierarchies are being eroded and playing fields leveled as other countries
and people rise in importance and ambition, are they conducting themselves in a way that will succeed in this new atmosphere?
Chapters
Chapter One While I Was Sleeping
As we are introduced to Friedmans theory that the world is flat, we accompany him on a journey to the various locations around the globe that led him to this conclusion. We start off in Bangalore, India, where he finds himself surrounded by advertisements of traditionally American companies such as Pizza Hut, Epson, HP and Texas Instruments during a round of golf. Traveling with a crew from the Discovery Times channel, he encounters Indian workers and businesspeople working for American companies, speaking in American accents and even adopting American names in their own country. A visit to Infosys Technologies Ltd leaves Friedman in wonder at the massive conferencing system they have created that allows people from around the globe to congregate and collaborate in one giant room via satellite and teleconferencing technology. Friedman guides us through the different eras of globalization as he has defined them in an historical narrative from the days of Columbus to our present day state. We see the ever increasing pace of globalization through his encounters with people such as Jaithirth Jerry Rao, an outsourced businessman in India, and others. Through Jerry, we learn about the process of information exchange online and the effect it has on businesses to perform various duties from remote locations with everything from tax preparation to hair appointment scheduling to hospital bookings cited as examples of outsourcing.
of the Berlin Wall in 1989, which tipped the balance of power across the world towards democratic free market and away from authoritarian rule. A second flattener is identified as our ability to not only author our own content, but to send it worldwide with the 1995 launch of the Internet. Subsequently, free workflow software was developed, allowing people from around the world to collaborate and work together on projects using a shared medium. As Apache and Wikipedia came into play, we became able to develop and upload web content and community collaboration became another flattening force. Preparations for Y2K required resources beyond those available in the United States and as a result, we see that India became responsible for a huge portion of these preparations. Offshoring, using the Chinese manufacturing sector as a prime example, has forced other developing countries to try to keep up with their low cost solutions, resulting in better quality and cheaper products being produced worldwide. The seventh flattening factor is our introduction to supply chaining, which is discussed in much greater detail later in Chapter Fourteen. Rounding out his list with insourcing, in-forming and the steroids, Friedman examines his flattening factors, their origins and the effect they will have on the way we do business in the future.
Uploading: Communities uploading and collaborating on online projects. Examples include open source software, blogs, and Wikipedia. Friedman considers the phenomenon "the most disruptive force of all." 5. Outsourcing: Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components, with each component performed in most efficient, costeffective way. 6. Offshoring: Manufacturing's version of outsourcing. 7. Supply-Chaining: Friedman compares the modern retail supply chain to a river, and points to Wal-Mart as the best example of a company using technology to streamline item sales, distribution, and shipping. 8. Insourcing: Friedman uses UPS as a prime example for insourcing, in which the company's employees perform services-beyond shipping--for another company. For example, UPS itself repairs Toshiba computers on behalf of Toshiba. The work is done at the UPS hub, by UPS employees. 9. In-forming: Google and other search engines are the prime example. "Never before in the history of the planet have so many people-on their own-had the ability to find so much information about so many things and about so many other people", writes Friedman. 10. "The Steroids": Personal digital devices like mobile phones, iPods, personal digital assistants, instant messaging, and voice over Internet Protocol (VoIP).
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create the environment rich for flattening. He credits this spread, the creation of complementary software and the internet, and political factors that caused several developing countries, including China, Russia, India and Latin America, to open their borders at this time with the creation of the perfect storm that led to the rapid-fire pace of globalization. Through interviews with U.S. Embassy officials in Beijing, we explore the desperation of Chinese students to study and work in America. For the first time in history, we see that talent has become more important than geography in determining a persons opportunity in life. We follow the path of a Boeing jet as components of its manufacture are outsourced to Russia and then India, allowing for faster and cheaper development of more planes as Friedman demonstrates the need for individuals and businesses to be able to compete in a global marketplace. Friedman works to dispel common myths about globalization as we explore the dot.com boom and bust, the American governments misinformation of the public as the triple convergence took place and the IT revolution we have heard so much about in the last 20 years.
and different groups of workers, as well as the relationships between communities and the businesses that operate within them. Friedman demonstrates that as little people begin to act big, so too are big people able to connect on the smallest level. Identities become harder to define, which will also need to be sorted out. The traditional roles of consumer, employee, citizen, taxpayer and shareholder have all become blurred and intertwined.
categories of workers who will have job security in the flat world. Synthesizers, explainers, leveragers, versatilists and more are identified and explained as viable career options, as well as strategies for preparing for these positions.
funding for research, lack of infrastructure as we focus on war and other countries focus on developing sustainable and innovative business. Friedman explores the differences between different countrys educational systems with Bill Gates and ultimately poses the question, why are we so focused on idolizing Britney Spears when competing countries are idolizing Bill Gates? Friedman contemplates The Innovate America Report, a wellmeaning document ignored by the President as he chased his own agenda and wonders whether China will beat us to the implementation of our own innovation. He sums up the chapter with a call to action to kick-start the long process of preparing ourselves for the future into motion before we are literally left behind.
package delivery service. His web-based global network cut costs and allowed him to compete with the biggest in the business and come out ahead. We see through other business models that globalization forces the big to act small: case in point, Starbucks learning from their customers to use soy milk in their coffees. We learn that companies must be willing to collaborate and focus on niche markets, doing themselves what they need to do to stay in front of their customers and outsourcing the rest. The best companies use outsourcing as a method of growth, not to shrink their workforce. Outsourcing allows them to provide more and better services more efficiently. We also explore socially responsible outsourcing; giving the outsourced workers a good wage and opportunity within their own country that they would not have otherwise.
too distant future: a depletion of our natural resources as people compete to have more and better.
cause countries to think rationally about the true cost of war, making diplomatic solution more likely. As we explore the darker side of the supply chain phenomenon, we understand how Al-Qaeda and other terrorist networks form mutant supply chains for the purpose of destruction, not profit. In a flat world, the transmission of terror is much easier. We must examine our abilities to derail the nuclear threat by using our capabilities to disrupt the terrorists supply chain.