Friday, December 7, 2012

The World Is Flat Book Review


In his book “The World Is Flat: A Brief History of the Twenty-First Century,” Thomas Friedman writes about the events that triggered “Globalization 3.0,” and its effects on the individual, national and international levels. Friedman calls these effects a “flattening” of the world because as the 21st century progresses, little people have the power to act big and big people are able to connect on the smallest level, thus bringing us closer to operating on a flat plane. Globalization 3.0 has leveled cultural walls and shattered national barriers as business, government, individuals, and even terrorists have the ability to share and connect like never before.

Friedman begins by explaining how it happened in his “Ten Forces That Flattened The World,” which are:
1)   Collapse of the Berlin Wall on 11/9/1989 (Friedman later contrasts this event to 9/11, calling 11/9 “creative imagination” and 9/11 “destructive imagination.”)
2)   Netscape brings the internet browser to the installed base of millions of PCs
3)   Work flow software allows computers to communicate without people
4)   Open-source projects and the self-organizing collaborative communities that make them possible. Examples include Wikipedia and Linux.
5)   Outsourcing has allowed companies to split manufacturing and services into stages, and hire outside parties to complete certain stages in a more cost-efficient way
6)   Offshoring differs from outsourcing in that Offshoring allows a company to take a factory that used to be in the USA, and move it to China or India where the exact same tasks can be done cheaper. Offshored tasks are still internal to the company.
7)   Supply-chaining. Friedman uses Wal-Mart as an example of how business uses technology to manage the supply chain for maximum efficiency.
8)   Insourcing. Friedman uses UPS as an example of a company that creates value for other companies who cannot afford a complex supply chain management system.
9)   In-forming, or the ability to find information.
10)  “The Steriods,” or the cell phones, tablets and laptops. All of the wireless, portable, ubiquitous and relatively affordable ways we connect.

Friedman then writes how these flatteners have and will change world culture, business, economics and politics. For example, on page 183 Friedman writes, “We tend to think of global trade and economics as something driven by the IMF, the G-8, the World Bank, the WTO, and the trade treaties forged by trade ministers. I don’t want to suggest that these governmental agencies are irrelevant. They are not. But they are going to become less important. In the future globalization is going to be increasingly driven by the individuals who understand the flat world, adapt themselves quickly to its processes and technologies, and start to march forward – without any treaties or advice from the IMF. They will be from every color of the rainbow and from every corner of the world.”

Relevance and Analysis:

All who read this book should be alarmed if its contents is news to them, for those who cannot keep up with the flattening of the world will be left behind. This is true on the individual or national level. Before Globalization 3.0, a B student from an American college was more highly valued than a genius from India or China. Now employers will hire that latter. As the world flattens talent becomes more valued than geography and the entire world must compete with each other.

Some fear this shift and want to build barriers such as banning outsourcing. The argument is that outsourcing harms America by giving away American jobs to foreigners. However, by running as efficient as possible, businesses can produce products and services at a lower cost and pass along these saving to the consumer as competition forces prices down. If we don’t utilize the global labor market to remain competitive, other countries will, allowing them to produce superior products at better prices. These products could steal enough market share to put American companies out of business, thus leaving even more Americans out of a job!

We must not bury our heads in the sand regarding what is happening around the globe. As more and more countries become highly educated and economically developed, America won’t be so special anymore.  If America remains ignorant by resisting forces that it cannot control we risk losing our status as the world superpower to smarter, hungrier nations. The fear of being surpassed will stimulate positive change, such as a higher skilled labor force.

Friedman makes another very interesting point regarding the benefits of outsourcing, free trade and modern supply chains in Chapter 12, which begins with the quote, “Free Trade is God’s diplomacy. There is no other certain way of uniting people under the bonds of peace.” If two countries are invested in a business together, they are less likely to go to war because war becomes more costly. Now imagine a world where every superpower is interconnected through business. The cost of war would be a global economic meltdown! This is both good and bad thing. It is good because no superpower would willingly go to war with costs that high. Outsourcing, free trade, and global business would effectually create world peace. The down side is that while the great leaders of nations would not willingly go to war, war can still be brought about by the actions of terrorist organizations. Friedman believes that we cannot separate the good from the bad; Globalization 3.0 unites business, politics, art and culture as well as terrorists.

In Chapter 11, ‘The Unflat World,’ Friedman addresses criticisms of his theory. He admits to being a technological determinist (a reductionist theory that presumes that a society's technology drives the development of its social structure and cultural values) and not a historical determinist. A critique can be quoted on page 373: “To listen to you, Friedman, there are these ten flatteners, they are converging and flattening the earth, and there is nothing that people can do but bow to them and join the parade. And after a transition, everyone will get richer and smarter and it will all be fine. But you’re wrong, because the history of the world suggests that ideological alternatives, and power alternatives, have always arisen to any system, and globalization will be no different.”

There is no guarantee that everyone will use these new technologies for the benefit of themselves or their countries. Technology is only a tool; it does not make us smart, moral, wise, fair, or decent. We can only hope that technology will be used for creation and growth, but that does not have to happen. The world is not yet flat and we do not know how it will look when it is.

In ‘The Unflat World’ Friedman lists three constituencies impeding the flattening process: the sick, the disempowered and the frustrated. The sick are the millions of people in India, Africa, China, and Latin America who are not taking off like the middle and high classes. These are the people who are afflicted by HIV, malaria, TB, polio, alcoholism, crime and broken governments. They do not have clean water or electricity. They have much bigger concerns than how Globalization affects them. The disempowered live in between the unflat and flat world. These are the Chinese and Indian peasants and farmers who see the effects of the flattened world, but lack the tools, skills or infrastructure to participate in any meaningful way. The frustrated are the groups who resist Globalization, sometimes to an extreme level such as al-Qaeda suicide bombers.

Assuming that the world does become ever-flatter and the sick, disempowered and frustrated end up joining the flat world, a problem that is already at crisis point will be pushed further into the red zone: pollution. Friedman lists the alarming statistic that in April 2004, over 1,300 cars were added to the streets of Beijing daily. Smog has become so bad that Beijing keeps track of “blue sky days.” The use of clean energy will be necessary in the flat world; its growth must coincide with world flattening or we will choke ourselves in clouds of pollution.

Personal Takeaways:

This is a truly comprehensive guide to the newest phase of Globalization. Friedman covers the past, present and future of the flat world and makes sure to admit that the world is flatter, not entirely flat. With the individual having the power to offer goods and services globally borders no longer restrict the marketplace. Soft powers such as culture and language are bigger barriers than geography in today’s world. Perhaps Globalization 4.0 will see a unification of diverse of culture and language. Until world peace is achieved and borders between nations dissolve I would not say the world is completely flat, and I do not see that happening until more “soft” barriers are broken.

For soon-to-graduate students like myself the book is a scary read. Employers can recruit from anywhere in the world, not just locally anymore. And with the amount of high quality entertainment readily available at extremely low cost, it is becoming increasingly difficult for American students to leave childish pursuits behind and reach adulthood. A portion of America’s youth is amusing themselves to death (as Neil Postman would say). I believe countries where Xbox, Television, Netflix are not so readily available and do not adopt an advertisement-saturated consumption culture may produce a higher quality workforce than America. The geniuses will do fine but the B-students will find it increasingly difficult to find satisfying employment. And as American students continue to amuse themselves to death, we will produce more B-students and fewer geniuses.

One “issue” I have with the book is that it is a little dated. I would love to read a new edition, or “The World Is Flat Part 2.” One flattener that I feel has become more relevant that Friedman only briefly touched on is online education. Online education began with a social stigma but as time passes it is becoming more serious. For example, MIT and Harvard provide free online courses with its website edX. And not just college/professional courses, but something as simple as watching a recorded speeches/lectures online and tutorial videos on Youtube can provide valuable online educational resources.

In conclusion I would recommend this book to anyone who wants a better understanding of just how different 21st century business and culture is compared to last century. Our world is changing exponentially and if we do not understand this we run the risk of being left behind.