The World Is Flat
Thomas Friedman’s 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, Friedman’s 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 America’s 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 Midwestern-USA 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. Friedman’s 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.
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 Al-Qaeda. 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.
Chapter One – While I Was Sleeping
As we are introduced to Friedman’s 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.
As Friedman travels through Japan, China and back to America, we study various examples of the business outsourcing phenomenon and its impact, positive and negative, on the players involved. Homesourcing and military outsourcing are explored as Friedman explains the sheer prevalence of outsourcing in our society.
Chapter Two – The Ten Forces That Flattened the World
We are introduced to Friedman’s interpretation of the ten influencing factors that led to globalization and world flattening, the first being the falling 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.
List of Ten Forces
- Collapse of Berlin Wall--11/89: The event not only symbolized the end of the Cold war, it allowed people from other side of the wall to join the economic mainstream. (11/09/1989)
- Netscape: Netscape and the Web broadened the audience for the Internet from its roots as a communications medium used primarily by 'early adopters and geeks' to something that made the Internet accessible to everyone from five-year-olds to eighty-five-year olds. (8/9/1995)
- Workflow software: The ability of machines to talk to other machines with no humans involved. Friedman believes these first three forces have become a “crude foundation of a whole new global platform for collaboration.”
- Open sourcing: 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."
- Outsourcing: Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components, with each component performed in most efficient, cost-effective way.
- Offshoring: Manufacturing's version of outsourcing.
- 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.
- 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.
- 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.
- "The Steroids": Personal digital devices like mobile phones, iPods, personal digital assistants, instant messaging, and voice over Internet Protocol (VoIP).
Chapter Three: The Triple Convergence
Acknowledging that the ten factors he discussed in Chapter Two could not have flattened the world all on their own, Friedman explains that as each of the factors came together, they had to spread and take root to 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 person’s 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 government’s 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.
Chapter Four – The Great Sorting Out
Friedman calls for a reality check as we explore the manner in which countries and societies will cope with and adapt to the dramatic changes that globalization brings to the way we do business, as individuals and entities. His comparison of the Industrial Revolution to the current IT Revolution leads us to believe that the world flattening we see today could have been predicted by Karl Marx.
An interview with Harvard’s noted political theorist Michael J. Sandel discusses whether or not exploitation is globalization; are the outsourced people from India being exploited or given opportunity they would not otherwise have had? In search of an answer to this question, Friedman examines the India-Indiana story from 2003, where an Indian company was outsourced to upgrade Indiana’s unemployment computer system, effectively taking work from people in Indiana in order to provide more work for people in India. We examine the blurring boundaries between companies 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.
Friedman summarizes the chapter with an examination of intellectual property law and means that must be put in place to protect it, as well as the death of the human bond in the online world.
Chapter Five – America and Free Trade
Does free trade still exist in a flat world? As he sets out to explore this dilemma, Friedman considers the banning of outsourcing, an action called for by many, to protect our country’s workers and the effect such an action would have on globalization. He concludes that erecting borders and walls would be detrimental to our goals and that Americans must instead be prepared to compete on a global playing field.
Friedman encourages better education and training, as Americans now compete not only with other Americans, but with the most brilliant minds around the globe for positions. We explore the “lump of labor” theory and new job creation in a global economy. He identifies the workers that will suffer most, should they be unable to keep ahead of the globalization trend, and offers large-scale suggestions to remedy this problem. Using the history of the American agricultural industry as an indicator of future trends in various industries today, he stresses the importance of an ability to adapt and specialize where there is a need. We learn that fear stimulates change and that this is a good thing.
Chapter Six – The Untouchables
Friedman addresses a concern shared by many Americans: what do we tell our kids? As the competition for jobs stiffens, how do we prepare them for the increased competition? His suggestion that we must make ourselves “untouchables” is explored in detail as he identifies three broad 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.
Chapter Seven – The Right Stuff
In a frank discussion of the fear amongst Americans regarding competition and education, Friedman explores the “right stuff”; the educational requirements needed to survive in the flattened world and more importantly, the availability of said education in our current system. Stressing the importance of self-learning and learning to learn, Friedman offers valuable advice to parents unsure of their children’s educational and professional futures. He recommends building right-brain skills, or those that cannot be duplicated by a computer, and explores different vehicles to higher learning, including music. Friedman examines the factors necessary to create the right environment for this learning and contemplates methods of achieving this in modern day America.
Chapter Eight – The Quiet Crisis
We begin by examining the U.S Olympic Basketball Team’s unexpected loss at the 2004 Games as an example of our complacency as the rest of the world is learning and catching up in areas we are used to dominating. An interview with Shirley Ann Jackson, 2004 President of the American Association for the Advancement of Science, demonstrates that a quiet crisis is happening slowly but surely as multiple and complex forces at work creating the perfect storm; demographic, political, social, cultural, economic, etc that could lead to America falling behind in innovation, science and technology. We explore the dirty little secrets that no one is talking about – a lack of highly skilled scientists and engineers, disinterest in math and science by our younger population, lack of ambition as television and video games take over, an outdated basic education system, lack of 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 country’s 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 well-meaning 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.
Chapter Nine – This Is Not a Test
In a call to action, Friedman stresses that we simply cannot do things the same old way anymore and people must be willing to change and adapt. He compares our current crisis to that we faced in competing with the Soviet Union and the launch of Sputnik; the main challenge then came from those who wanted to put up walls while we now have to face those who want to tear them down. Now, as then, we must change our strategy to overcome these issues. He discusses the difficulty in getting America to stand up and take notice of the importance of this issue in a supercharged society where hype and terror are needed to get the public’s attention and support.
Friedman stresses the importance of shoving political barriers aside in what he calls “compassionate flatism” to prepare our country for what lies ahead. He questions leadership and education; who will lead us into the forefront of this new globalized economy? The necessity for lifelong learning and benefits to allow workers to remain mobile and adaptable is very real, though it seems to be at the bottom of our to-do list.
Finally, Friedman examines how companies such as Capital One are working on the lifelong learning objective by providing training and upgrading to employees, increasing their own productivity and bottom line in the process, as he calls for social programs that encourage workers to be creative and hardworking.
Chapter Ten – The Virgin of Guadalupe
We see the Chinese manufacture of statuettes of The Virgin of Guadalupe and their subsequent importation into Mexico as an example of the problem created when one developing country competes with another, as China replaced Mexico as the U.S.’s number two importer in 2003. Friedman discusses the need for developing countries to put policies in place to create the right environment for their companies and entrepreneurs to succeed in the flat world. He states that countries must be brutally honest with themselves in determining their place in the world market if they are to adapt and survive. A comparison of countries who have opened their borders and adopted free trade policies versus those who have not and been left behind illustrates his point.
The concept of reform retail and wholesale is introduced as we explore changes in education, infrastructure and governance. Ireland becomes a case study for financial success as their per capita GDP has risen to second highest in the European Union. Friedman contemplates a society’s ability and willingness to sacrifice for the purpose of economic development and leaders with vision as vehicles of change and conversely, the reason some countries will not.
Chapter Eleven – How Companies Cope
Friedman opines that companies willing to change and accept change are more likely to do things than have things done to them. In profiling Jill and Ken Greer, creators of Greer & Associates multimedia company, we learn of their experience with the rise of freelancers as their competition, as well as the fact that technology that should have simplified their operations made it more difficult by requiring more of them.
We look into commoditization in a wide range of industries, where everything is the same and supply is plentiful. Clients are flooded with options and everyone becomes the same. Each company is driven to be more creative and innovative, or risk falling between the cracks. At this point we meet Fadi Ghandour, cofounder and CEO of Aramex, a home-grown 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.
Chapter Twelve: The Unflat World
Friedman shares stories of the world flattening but humbly announces that he does indeed realize the world is not yet flat. He wants to draw attention to the flattening and the ever-increasing pace at which it is occurring. Part of this understanding must come from a recognization of factors that are preventing globalization from occurring in some people.
Friedman examines different groups of people he believes are disadvantaged for one reason or another and the way that this keeps them from moving forward into a flattened world. The AIDS epidemic affects people who are too sick to hope they will ever make it to middle class. Disempowered people are those who live in areas touched by the flattening of the world but lack the means, knowledge and infrastructure to benefit from it. For example, in India only 2% of the entire population are involved in the high-tech and manufacturing for export sectors.
Different societies and cultures are coming into contact with each other more frequently and more quickly than ever before, leading to great frustration. Using the Arab-Muslim world and his journalistic encounters with their youth as an example, Friedman explores the impact of freedom of thought and expression that world flattening has created and its impact on a traditionally closed society. He warns of a potential threat lurking in the not too distant future: a depletion of our natural resources as people compete to have more and better.
Chapter Thirteen: Globalization of the Local
In this examination of the impact of globalization on world cultures, we learn that globalization came to be seen by many as Americanization, creating a backlash by those who felt that they would be steamrolled and homogenized into being mini-Americans.
But as new forms of communication and innovation create a global platform for the sharing of work, entertainment and opinion, Friedman believes that globalization serves more to enrich and preserve culture than to destroy it, as each person is given their own voice and vehicle of expression through podcasts, websites, etc. The nature of the beast is such that the bad will always be there with the good. As humanitarians and businesses connect online to share ideas, so too do terrorists and predators.
Chapter Fourteen: The Dell Theory of Conflict Prevention
We begin with an in-depth study of the supply chain, using the purchase of Friedman’s own computer as a case study. This leads to an examination of how geopolitical conflicts could derail or slow globalization.
Friedman’s theory is that two countries invested in a business together by being part of the same global supply-chain are less likely to go to war, as they are now heavily invested in the success of the business venture. Any interruption to that supply chain would be critical. As we reflect on the evolution of supply chains and the effect they have had on politics and the stability of countries they affect, we remember that Asia, as opposed to much of the Middle East, has become more stable because they are part of many supply chains and therefore more interested in doing good business. Overall, the price of war is higher than it used to be and countries will have to consider the effect of a war on their place in the business world. Friedman explores both the China-Taiwan relations and India-Pakistan as examples of how the flattening of the world and supply chain have a calming effect and 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.
Chapter Fifteen: 11/9 Versus 9/11
We begin by examining two significant dates in world flattening: 11/9 as an example of creative imagination and 9/11 as destructive imagination. 11/9, with the destruction of the Berlin Wall, was the door opening to a freer, flatter, and more democratic world, where 9/11 saw our world try to snap shut against outside threat. This is Friedman’s call for positive creativity and giving people the tools to do positive things with what is available through the opening of so many doors.
We see the innovation and creativity that Bin Laden put into his 9/11 plan, as horrible as it was. Friedman concludes that the forces that flatten the world can be used to bring everyone up to the same level, or to bring them all down to the same level. Those of us who live in free and progressive societies must lead others to use their imaginations without allowing their imaginations to get the best of them – or us. Technology cannot protect us; we must harness that technology and decide how it will be used. This requires us to define the line between precaution and paranoia to keep things in perspective in a flat world. We are called to remember who we are to avoid losing our identity in a flat world. In exploring eBay as a virtual community, India as the second largest Muslim country where the context and imagination are different than in other parts of the Arab world, and the curse of oil and how it keeps countries from moving forward in other ventures, we learn about different types of creativity.
Friedman reflects on his story of Aramex from Chapter Eleven as an inspirational closing thought; one of a small Arab company that made it big in the world platform.