While visiting a company in Bangalore, India, Thomas L. Friedman looks at a wall screen that connects Infosys Technologies Limited’s global supply chain. At any time of day, individuals within this company—no matter where in the world they are—can meet via a video conference call. Friedman realizes that the “world is flat”—in his words, “the global competitive playing field was being leveled. The world was being flattened.” Friedman looks at the history of globalization and identifies three periods. The first lasts from 1492 to 1800, a time when trade begins between the New World and Old World. “Globalization 2.0” lasts from 1800 to 2000, and here the “dynamic force driving global integration” is multinational companies. This is the era in which the global market is born. Globalization 3.0 will continue to shrink and flatten the world, but it will differ from the previous periods that Friedman identifies because it will become decreasingly a Western driven process.
Friedman goes on to discuss forces that are flattening the world. He notes that when the Berlin Wall fell, the world became a little flatter. Friedman argues that although many forces caused the Wall to fall, the “first among equals” was the use of information technology like fax machines to spread information. The creation of the World Wide Web accelerated this process, as did work flow software. Friedman also points to the power of the community that arose in the twenty-first century, which can be seen in groups of people creating open-source software in their spare time while large companies are trying to sell the same service. Outsourcing and offshoring are also "flatteners." Here, Friedman travels to India and China to explain how business models need to change in order to remain competitive in the flat world. The next flattener is supply-chaining, which allows Wal-Mart to be the biggest retail chain in the world, even though it does not make anything. What Wal-Mart offers, Friedman explains, is a supply chain. Insourcing, meanwhile, takes Friedman to UPS, where “UPS engineers come right inside your company; analyze its manufacturing, packaging, and delivery processes; and then design, redesign, and manage your global supply chain.” The result of this insourcing is that some companies no longer touch their products. Toshiba laptops are not only transported but also fixed by UPS workers. Friedman refers to the rise of information found through search engines as “In-Forming.” It allows people around the world access to the same information. The final flattener is “the steroids,” which Friedman explains are “digital, mobile, personal, and virtual.” Friedman marvels that while riding a Japanese bullet train traveling 150 miles per hour, his colleague is able to access content from the Internet. The early flatteners seem to be growing faster than before, as though they are taking steroids, and it will continue to empower collaboration.
Friedman then discusses the "triple convergence." The first “convergence” was that of the flatteners, which provided a new playing field for doing business. These flatteners have been around for decades but after they established roots, they began to mingle with one another. The second convergence is the merger of the new playing field with new ways of doing business. Friedman points out that a new platform for doing business, such as the emergence of computers in the workplace, is not enough to increase productivity. It takes time for practices to catch up. The third convergence was the emergence of several billion people in the playing field. Friedman points out that closed economies, like Russia and China, opened up at almost the exact moment that the flatteners emerged, which allows billions of people to compete and collaborate for the first time. Friedman emphasizes that the triple convergence is not only happening, but happening faster than most people realize.
Friedman argues that the
winners will be those who learn the habits, processes, and skills most quickly—and there is nothing that guarantees it will be Americans or Western Europeans permanently leading the way.
One advantage that the billions of people that have only recently joined the “playing field” enjoy is that they do not have to “worry about all the sunken costs of the old systems.” They can skip stages of development. Friedman explains that the Chinese use more cell phones than Americans, in part because they “skipped over the landline phase.” The world’s economy seems to be changing, and that change is largely being driven by individuals rather than governments because individuals can now meet and interact using online services like Skype. People used to rely on visas to travel to areas with opportunities, but now, Friedman explains, people can “innovate without having to emigrate.”
Friedman notes that there was a second triple convergence that prevented people from fully realizing that the first one was happening. The dot-com bust was “wrongly equated” with the end of globalization. At the same time, the...
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