The World Is Flat: The Globalized World in the Twenty-first Century by Thomas L. Friedman

Apparently this book, in the author’s own words, has spawned a “cottage industry of articles with variations on the title ‘The World Is Not Flat’”. Well, saying the world is flat is definitely a provocative assertion. Mr. Friedman is putting forth that we are now entering an era of a new kind of globalization, what he terms Globalization 3.0. The Internet, communications technology and work flow software has made the horizon disappear; everyone on all corners of the world can communicate and connect with each other for both good and evil.

Before I discuss this book any further I would like to point out that it’s not a work of scholarship but of journalism. It’s akin to one very long Newsweek article. He travels, meets with influential people, does interviews, observes and opines. His clever use of analogies, buzzwords and snazzy subtitles make for interesting reading, but the core message is very simple. Essentially he’s telling us stories and anecdotes to illustrate what he thinks this new globalization is all about.

Mr. Friedman identifies three distinct phases of globalization. The first phase started when Columbus discovered America in 1492, lasting to 1800. Globalization 1.0 was about empires, power and natural resources.

The second phase was from 1800 to 2000. The Industrial Revolution and advances in transportation and telecommunications enabled multinational companies to have an increasingly global marketplace. The world become smaller as travel became easier - goods and services were exchanged all over the globe.

The previous two eras of globalization were about countries and then companies; since the year 2000, globalization has been about the empowerment of individuals. The “flat-world platform” is the term Mr. Friedman gives to the “phenomenon that is enabling, empowering, and enjoining individuals to go global so easily and so seamlessly”. This platform is the result of the convergence of the PC, fibre-optic cable ubiquity and work flow software.

This is how the story goes: there was the dot-com boom which saw a huge amount of investment in Internet infrastructure. The dot-com bust left a huge glut in fibre-optic cable capacity which resulted in very cheap broadband. At the same time, a shortage of software engineers in the western world meant that they were unable to fix the Y2K bug on their own. So this work was outsourced to India. Apparently the Indians did such a good job – at very competitive rates – that American companies decided to outsource software development and call centres to India on a permanent basis. (Mr. Friedman traveled extensively to India in the course of writing this book and talks about India a lot). At the same time, the emergence of VOIP (which enables cheap international calls) and advanced teleconferencing and videoconferencing hardware and software made the outsourcing of work to India that much more feasible. It’s a riveting story involving nerds, billions of dollars, technology, different peoples and cultures, underdogs, and paradigm shifts. In essence, Mr. Friedman would like to interpolate from the outsourcing industry in India to a whole new way of doing things.

Of course, it’s not just about India: it’s also about the fall of the Berlin Wall, the invention of the world wide web, the infamous Netscape IPO, the open-source software model, China as a manufacturing power, Wal-Mart (i.e., extreme supply-chaining), insourcing and “in-forming”. I’ll let Mr. Friedman explain more about the last two.

Insourcing:

“… If you own a Toshiba laptop computer that is under warranty and it breaks and you call Toshiba to have it repaired, Toshiba will tell you to drop it off at a UPS store and have it shipped to Toshiba, and it will get repaired and then shipped back to you. But here’s what they don’t tell you: UPS doesn’t just pick up and deliver your Toshiba laptop. UPS actually repairs the computer in its own UPS-run workshop dedicated to computer and printer repairs at its Lousville hub. I went to tour that hub expecting to see only packages moving around, and instead I found myself dressed in a blue smock, in a special clean room, watching UPS employees replacing motherboards in broken Toshiba laptops. Toshiba had developed an image problem several years ago, with some customers concluding that its repair process for broken machines took too long. So Toshiba came to UPS and asked it to design a better system. UPS said, ‘Look, instead of us picking up the machine from your customers, bringing it to our hub, then flying it from our hub to your repair facility and then flying it back to our hub and then from our hub to your customer’s house, let’s cut out all the middle steps. We, UPS, will pick it up, repair it ourselves, and send it right back to your customer.’ It is now possible to send your Toshiba laptop in one day, get it repaired the next, and have it back the third day. The UPS repairmen and -women are all certified by Toshiba, and its customer complaints have gone down dramatically.” (p. 168)

In-forming:

“In-forming is the individual’s personal analog to uploading, outsourcing, insourcing, supply-chaining, and offshoring. In-forming is the ability to build and deploy your own personal supply chain – a supply chain of information, knowledge, and entertainment. In-forming is about self-collaboration – becoming your own self-directed and self-empowered researcher, editor, and selector of entertainment, without having to go to the library or the movie theater or through network television. In-forming is searching for knowledge. It is about seeking like-minded people and communities …” (pp. 178-79)

So that’s the first half of the book. The rest talks about the economic, political, social and cultural impact that a flat world will have on America. Mr. Friedman goes on to dispense some prescriptions on how to survive and thrive in this flat world, which boils down to having imagination and being open to all sorts of new possibilities.

This book is very much from the point of view of an American who is concerned about the impact of Globalization 3.0 on his country. What about Malaysia?

For one, Malaysia has always been caught in the middle of globalization. The Portuguese, the Dutch, the British and the Japanese have all colonized this land for our spices, rubber, tin and palm oil. Large numbers of Indonesians, Chinese and Indians have settled here. In the eighties and nineties, the Japanese came again, this time to utilize cheap and amenable blue-collar workers. The US has long been our largest export market.

I would say that Malaysia is still at Globalization 2.0. The Malaysian economy is pretty much dependent on foreign direct investment by multinational companies. The reason we can’t as yet go to the next level is because we lack that critical mass of world-class knowledge workers. As it stands things are still fine as long as we’re more productive and more cost effective than Vietnam, Thailand and Cambodia. These countries and other such countries around the world will soon start beating us at our own game. Then we’ll have to find a niche as some sort of regional hub for something, like how Singapore is for finance and Thailand is for car components. As individuals, to maintain the lifestyle to which we’re used, we’ll have to be not just good at what we do, but world experts at things not many other people do.

In conclusion, Mr. Friedman wants us to believe that the world has changed completely. It has – for a few thousand Internet millionaires; for a percentage of the population in India, China, Eastern Europe and East Asia reaping the benefits of outsourcing and offshoring; for laid-off blue collar workers in developed countries; and for those in the right place at the right time with the right skills. Otherwise it’s still somewhere between Globalization 1.0 and 2.0 for the rest of the world.

21 July 2008 | Book review | Comments