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 “Enron corporate governance scandal” and blowups at Tyco and WorldCom sent CEOs running for cover, effectively hiding from the public. Meanwhile, 9/11 prevented the American government from recognizing the impact of the flatteners. Consequently, Friedman argues, America has been slow to respond to the new business environment. Friedman confesses that he was largely unaware of it until 2004 when he visited India. Ultimately, “thanks to the triple convergences, this new flat-world platform is, in effect, blowing away our walls, ceilings, and floors—all at the same time.” Friedman suggests that the IT Revolution is only now beginning.

Now, the world is about to face what Friedman calls “the great sorting out” as things move from a vertical “command and control” system to a horizontal “connect and collaborate” system. Friedman locates the "sorting out" within a Marxist tradition of analysis in which capitalism erodes boundaries to the global marketplace. These boundaries provide “friction.” The nation-state is one source of friction and Friedman wonders whether it can survive in a flattened world. The corporation does not care about where profits come from, but the nation wants steady jobs that are close to home. “Sort it out,” suggests Friedman.

Friedman now discusses what impact the flat world will have on America. Friedman considers his children and the many jobs that will no longer be “American” when they enter the workforce, and wonders “wouldn’t individual Americans be better off if our government erected some walls and banned some outsourcing and offshoring?” Friedman considers the argument of the economist David Ricardo:

if each nation specializes in the production of good in which it has a comparative cost advantages and then trades with other nations for the goods in which they specialize, there will be an overall gain in trade, and overall income levels should rise in each trading country.

Although there are millions of people in India willing to take IT jobs from Americans, Friedman maintains that Ricardo will ultimately be proven correct. Nevertheless, Friedman argues that American children must be educated to compete in the flat world.

Friedman advises Americans to find “untouchable” jobs. These are the jobs that are not fungible and that cannot be digitized or automated. The “special and specialized” jobs should recall Madonna or Michael Jordan. “Localized” or “anchored” jobs are those that require face to fact contact. He suggests that there will be new middle class jobs. The “synthesizers,” for example, are those that can bring disparate skills together to create new products. The “explainers,” meanwhile, are people that can explain complexity in a way that is simple to understand. Without them, complex systems will not find users. The “leveragers” are a third group of “middlers” that can make technology work in a way that enables people to be more productive. Friedman argues that people will continue to want things, and that technology will create new jobs for people with the right education and skill set. Friedman argues that America is founded on principles that will allow people to develop these skill sets and to succeed in the flat world. Friedman calls on his readers to train the next generation to acquire the necessary skills as well as the necessary mindsets to succeed in the flat world.

Friedman considers what impacts the flatteners will have on the developing world. While talking to his colleagues from around the world, Friedman asks when they first realized that the world is flat. For those from Mexico and Egypt, it was when they realized that their low-wage workers were no longer able to compete with those from China. Friedman ponders the policies developing nations can take in order to remain competitive. There are four things that Friedman suggests countries need in order to compete: infrastructure that allows for collaboration; education that teaches people about innovation and collaboration; the right governance, since countries are not only competing privately but also in the public sector; and natural environments since they tend to attract knowledge workers. Friedman goes on to suggest that countries must make it easy to start businesses, so it becomes easy for companies to adjust to market pressures and enforce contracts. Friedman advises countries to deregulate when possible and he cites the IFC’s advice to make “reform a continuous process.” Finally, Friedman maintains, countries need to adopt a pro-globalization policy to bring their people out of poverty.

Friedman offers nine rules for companies to follow. The first is that “whatever can be done will be done,” though not every company will choose to be the agent responsible for it. Therefore, the “most important competition today is between you and your imagination.” Friedman goes on to suggest that small companies need to act big, but conversely, big companies need to "act small” by enabling their clients to follow the third rule. Friedman argues that the best companies will be the ones that are collaborative and that these companies will “stay healthy by getting regular chest X-rays and then selling the results to their clients.” Another strength is to “outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists—not to save money by firing more people.” Price is no longer the only thing that differentiates one company from another; how they do business is more important than before. Finally, Friedman advises companies to “reach for a shovel and dig inside yourself” when the world goes flat, as opposed to creating walls.

In recent editions of the book, Friedman explores the impact the flat world has on culture. He suggests that uploading is a flattener that seems to be neutralizing American cultural imperialism and making more room for cultural diversity than ever before. Friedman suggests that “globalization of the local” allows diaspora communities to hold on to their cultural norms and traditions. Further, these flatteners empower the individual to mount campaigns that force multinational companies to change their practices. Friedman argues that “if it’s not happening, it’s because you’re not doing it.”

Though Friedman is optimistic about the flat world, he acknowledges some problems posed by it. People are so connected to their devices that they lose track of each other. The web can also be a source of constant interruption and Friedman wonders whether hotels will soon advertise rooms that are completely without access to wireless Internet services. Additionally, what happens when people can say whatever they want and can also hear whatever anyone else is saying about them? Finally, people’s actions are no longer left behind in locations. These memories arrive at locations ahead of the actual person. The flat world means that everyone in the world is using more energy. However, it also empowers people to find ways to reduce their energy usage. The flat world enables al Qaeda to recruit members, but it also also means that countries with global supply chains will have less incentive to go to war unless they are willing to disrupt their economy. Ultimately, Friedman concludes, the future is about imagination. He writes:

This is not all that complicated: give young people a context where they can translate a positive imagination into reality, give them a context in which someone with a grievance can have it adjudicated in a court of law without having to bribe the judge with a goat, give them a context in which they can pursue an entrepreneurial idea and become the richest or the most creative or most respected people in their own country, no matter what their background, give them a context in which any complaint or idea can be published in the newspaper—and guess what? They usually don’t want to blow up the world. They usually want to be a part of it.