The World is Flat

The World is Flat, A brief History of the Twenty First century, by Thomas Friedman

This book is a superb introduction to globalization in our world today. You really cannot understand the 21st century without it.

Thomas L. Friedman’s aim in The World Is Flat is not to give a speculative preview of the wonders that are sure to come in our lifetime, but rather to get you caught up on the wonders that are already here. Friedman explains how the flattening of the world happened at the dawn of the twenty-first century; what it means to countries, companies, communities, and individuals; and how governments and societies can, and must, adapt. What Friedman (a New York Times columnist) means by "flat" is "connected": the lowering of trade and political barriers and the exponential technical advances of the digital revolution have made it possible to do business, or almost anything else, instantaneously with billions of other people across the planet. This in itself should not be news to anyone. But the news that Friedman delivers is that just when we stopped paying attention to these developments - when the dot-com bust turned interest away from the business and technology pages and when 9/11 and the Iraq War turned all eyes toward the Middle East - is when they actually began to accelerate. Globalization 3.0, as he calls it, is driven not by major corporations or giant trade organizations like the World Bank, but by individuals: desktop freelancers and innovative startups all over the world (but especially in India and China) who can compete - and win - not just for low-wage manufacturing and information labor but, increasingly, for the highest-end research and design work as well. (He doesn't forget the "mutant supply chains" like Al-Qaeda that let the small act big in more destructive ways.)

What created the flat world? Friedman stresses technological forces. Paradoxically, the dot-com bubble played a crucial role. Telecommunications companies like Global Crossing had hundreds of millions of dollars of cash - given to them by gullible investors - and they used it to pursue incredibly ambitious plans to ''wire the world,'' laying fiber-optic cable across the ocean floors, connecting Bangalore, Bangkok and Beijing to the advanced industrial countries. This excess supply of connectivity meant that the costs of phone calls, Internet connections and data transmission declined dramatically - so dramatically that many of the companies that laid these cables went bankrupt. But the deed was done, the world was wired. Today it costs about as much to connect to Guangzhou as it does Paris. The next blow in this one-two punch was the dot-com bust. The stock market crash made companies everywhere cut spending. That meant they needed to look for ways to do what they were doing for less money. The solution: outsourcing. General Electric had led the way a decade earlier and by the late 1990's many large American companies were recognizing that Indian engineers could handle most technical jobs they needed done, at a tenth the cost. The preparations for Y2K, the millennium bug, gave a huge impetus to this shift since most Western companies needed armies of cheap software workers to recode their computers. Welcome to Bangalore.

Friedman divides globalization into 3 phases:
Globalization 1.0 : up to 1800 when things depended on states
Globalization 2.0 : when it was multinational corporations 1800-2000
and then
Globalization 3.0 : since 2000 when it has been up to the individuals.

Friedman vividly describes his travels around the world, where he has witnessed first-hand the effects of the great “flattening.” In a Bangalore calling centre, 2,500 young Indians answer calls from the other end of the planet, imitating accents of various English-speaking countries as they help Britons reboot their laptops and Americans refinance their homes. In Mexico City, one finds statuettes of the country's patron saint, the Virgin of Guadalupe, manufactured in China and imported through California. Meanwhile in Salt Lake City, a Mormon housewife named Dolly takes airline reservations for JetBlue. When you ship your Toshiba laptop for repairs via UPS, it's actually UPS's guys in the ''funny brown shorts'' who do the fixing.

All these are potent illustrations of how IT has rewired the world, fueling growth in the US while pushing hundreds of millions around the world out of poverty.

Friedman wants to tell how exciting this new world is, but he also wants you to know you're going to be trampled if you don't keep up with it. There's no way to stop the wave. You cannot switch off these forces except at great cost to your own economic well-being. Over the last century, those countries that tried to preserve their systems, jobs, culture or traditions by keeping the rest of the world out all stagnated. Those that opened themselves up to the world prospered. But that doesn't mean you can't do anything to prepare for this new competition and new world.

The World is Flat is a lively, provocative and sophisticated book. We have no real idea how the 21st century's history will unfold, but this terrifically stimulating book will certainly inspire readers to start thinking it all through. Highly recommanded.