The World Is Flat: A Brief History of the 21st Century (2005) is a history and an analysis of globalization. The book sold well and was praised by most critics. However, the book includes many ideas already explained in his earlier book, The Lexus and the Olive Tree (1999).

Friedman discusses outsourcing and wonders if the US should ban the practice. Specifically, he writes about Indian tax accountants who prepare returns for their American clients. This is an example of how Americans must now compete with others around the globe for jobs.

Friedman also argues that America can compete in this new world by investing in education and argues in particular that Americans need to prepare for positions that will not be replaced by computers. He also stresses the importance of self learning. This investment in the future is vital, he posits, for maintaining the current American standard of living in a world economy that is changing dramatically.

The US also has to prepare for a "flat world" by investing in its infrastructure. He argues that spending too much on the military is an error, and those expenditures leave the country ill-prepared to face the "flat world." (Interestingly, Friedman supported the US invasion of Iraq, so perhaps he is inconsistent.)

Friedman believes these changes are a crisis for America. In the 1950s, the US responded to Soviet space exploration with an intense—and ultimately successful—effort to outdo the Communists. Thus, Friedman argues that America needs another "Sputnik" to catalyze an American response to current threats posed by globalization.