Tuesday, February 16, 2010

The World is Flat: a Review

During my recent trip down to the sun and sand of Cuba, I brought a book to read. Nothing unique about that, since most of the people who were lying by the ocean were reading books. In fact I thinking reading may have been more popular then going into the Ocean, the only thing more popular was the art of lying on the beach.

The book I read was entitled "The World is Flat" by Thomas Friedman. It is subtitled 'A Brief History of the 21st Century'. First of all, let me say at over 600 pages, it is anything but brief, but this is not to say the book is a struggle to read or tedious, in fact with his position as a journalist, Thomas Friedman has garnered his opinions from an interesting worldview, based upon his years of talking to some amazing people from quite a large number of nations.

The book begins with his coming to understand that the world has changed, it has become flat, or as some might describe it, as the playing field being leveled. I should point out that Friedman's thesis has brought about a number of critics who disagree with his points, but that's for another blog, perhaps. Friedman believes the world is flat and it has been the incredible transformation of technology which has brought this about, to him, the flatness can be found in the fact that companies are now being established to read x-rays, tax returns and do customer service, in places such as India, and later on you will read the same services are also expanding into Latin America, for example, to deal with the demand and the downtime on the other side of the world. The flatness is found in the interconnectivity of the world through technology.

The irony is that all this was brought about by the collapse of the tech bubble in the late 20th century. All of a sudden, all the digital infrastructure that had been put in place, such as the fibre optic cable was cheap and because it connected places such as India to North America, it now became possible to establish technology companies in India. Couple this with the fact that India decided to give up it's almost 50 year experiment with a socialist economy and build a more trade friendly one, brought about this massive explosion. It became good to be an entrepreneur, and with the fact that the post secondary education system was filled with some brilliant engineers and computer technologists, the country found itself in a place to take full advantage of the opening created.

At the same time, Friedman warns that the same technology that brought about some incredible change is also being used by groups that are not as benign. The tools are being used by groups such as Al-Quada to flatten the world in a way that is not so positive.

Thomas Friedman believes in globalization. While at times, this world has elicit scorn and anger from many quarters, to him it is the way in which people throughout the planet can raise themselves from the poverty level. He sees globalization as the expansion of jobs into places where such work doesn't exist and lifts people up. His criticism towards those who are anti-globalization is that they have no plan and the fact they tend to centre upon multinationals and not the people and nations that benefit from the jobs.

He discusses the various iterations of globalization; to him it all starts in 1492 when Columbus decided to sail west, rather then east and 'discovered' the new world. To him this is Globalization 1.0, in which nations were the main source of influence, wealth and power. It was during this period the world became round. This period lasted until about 1800, when we entered the stage of Globalization 2.0, this period was marked by the rise of corporations that quickly became multinationals. It was the time of robber barons and colossus, who ruled the world. It was also marked by the rise in both transportation and communication, so the world became small. The period we are in now is Globalization 3.0, and this is marked by the individual using the tools at his or her availability to make a difference in the world. The world is no longer round or small, it is flat.

An important part of the book is the ten forces that flattened the world. To him the great levellers are:

1. Fall of the Berlin Wall
The events of November 9, 1989, tilted the worldwide balance of power toward democracies and free markets.
2. Netscape IPO
The August 9, 1995, offering sparked massive investment in fiber-optic cables.
3. Work flow software
The rise of apps from PayPal to VPNs enabled faster, closer coordination among far-flung employees.
4. Open-sourcing
Self-organizing communities, � la Linux, launched a collaborative revolution.
5. Outsourcing
Migrating business functions to India saved money and a third world economy.
6. Offshoring
Contract manufacturing elevated China to economic prominence.
7. Supply-chaining
Robust networks of suppliers, retailers, and customers increased business efficiency. See Wal-Mart.
8. Insourcing
Logistics giants took control of customer supply chains, helping mom-and-pop shops go global. See UPS and FedEx.
9. In-forming
Power searching allowed everyone to use the Internet as a "personal supply chain of knowledge." See Google.
10. Wireless
Like "steroids," wireless technologies pumped up collaboration, making it mobile and personal

The above list was taken from the interview Wired Magazine did with Thomas Friedman.

The point he does try to get across is China and India are not interested in racing the West to the bottom, they want to race us to the top. They want to experience the comfortable life we now have in the West. They have had enough poverty, it's time for their moments in the sun and they have the resources, because we all do, the drive, desire and brainpower to do just that. If the West is to stay on top, it won't take place through protectionism and isolationism, but rather by educating ourselves with the skills to live in this new century. We need to develop greater strength in mathematics, science and the liberal arts. We need to add innovation and extras to stay on top. He also believes one place the West can stay on top is through the development of green technology. He wants to end dependency on oil, since oil has been a bane not a boon to those nations which possess it. This point is further developed in his latest book "Hot Flat and Crowded", which I did a review of a few months back.

While he is a supporter, he acknowledges the problems of globalization, for example there are still a lot of people who have not been able to enjoy the benefits of the change. These people are on the fringe and there is still a lot of them. They are there because of situations and circumstances- for example the wrong caste or the fact they are sick to give a few examples. They have been shut out because of their poverty. He does say the poor are not angry at the rich, they are angry because the way for their own wealth is block by circumstance probably not of their making. An important reason is also too humiliated. He looks at this point which has led to the rise of radical Islamism and groups such as Al-Qaida. They look at their history and their circumstance and realize they are not where they should be. Whereas at one time they were the dominant world power, they have lost a lot of strength. While much of the Islamic world is wealthy,due to oil, this wealth has not really brought about much innovation. So they seek to blame or return to that period of time when the Muslim world was the world power. Plus when they come west, they are often on the outside still, looking in, taking low end jobs and facing discrimination. This is where the suicide bombers are recruited, because humiliation leads to anger and anger to lashing out against those perceived source of the humiliation.

The book is fascinating. As I said few can have Thomas Friedman's perspective on global issues, since he's the one that talks to the people. He encounters billionaires, on one hand, and grandmothers in Utah taking his Jet Blue reservation in the next. He presents his case, not as either a cheerleader, although he admits as much, nor as someone who hates globalization, he is a realists, giving us the full portrait.

The size may frighten, but it is interesting enough to keep you going throughout the 600 plus pages.

Available through Amazon and other online retailers as well as local bookstores.

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