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Samenvatting en recensie The World is Flat (Thomas L. Friedman)

By 19/11/2007 One Comment

The World is FlatGisteren heb ik The World is Flat (Thomas L. Friedman) uitgelezen. Niet alleen omdat het een boek was wat ik al langer wilde lezen, maar met name ook omdat het te maken heeft met een aankomend project (waarover op een later moment meer).

Eindresultaat: een Engelstalige (vond ik voor het moment makkelijker) samenvatting met kritiekpunten. Lezen kan hieronder, maar ook in Google Docs.

The World is Flat – A brief history of the twenty-first century
Thomas L. Friedman
Farrar, Straus and Giroux, New York, 2006
Reviewed by Polle de Maagt

Summary

Friedman states that the world is flat. There are many developments levelling the playing field for countries, companies and individuals to compete and collaborate globally (shrinking and flattening the world in his words). He states that the first wave of globalization (Globalization 1.0) was about competing globally with countries (1492-1800), Globalization 2.0 was about competing globally with multinational companies (1800-2000) and Globalization 3.0 is all about individuals collaborating and competing globally (2000 and on).

He defines ten flatteners, events or developments that are levelling the playing field of the global economy (flattening the world):

  1. 11/9/89: the fall of the Berlin Wall; tipping the world balance towards the democratic, consensual, free-market-oriented governance, away from authoritarian rule and centrally planned economics, or as he quotes Amartya Sen: “the Berlin Wall was not only a symbol of keeping people inside East Germany – it was a way of preventing a kind of global view of our future. We could not think globally about the world when the Berlin Wall was there. We could not think about the world as a whole.“;
  2. 8/9/95: the day Netscape went public: the Netscape webbrowser was the first easy-to-use webbrowser aimed at mainstream use and helped make the internet truly interoperable by adopting open standards and protocols in contrast to closed and heavily patented protocols that walled certain portions of the internet. Besides that, the huge money that was made with Netscape going public stimulated loads of other people to begin webbased software and websites;
  3. Work Flow Software: software and standardized protocols that made it easy to digitize content and send digital content around the globe, helping to collaborate with other people;
  4. Uploading: everyone can place content (software and code, but also text, images or videos) online to share it with others and collaborate;
  5. Outsourcing: taking some specific, but limited, function that a company was doing in-house and having another company perform that exact same function for that company and reintegrating that work back into the overall operation (usually in a context of European or American companies outsourcing tasks to countries like India and China), a trend started with Indian software developers checking all Western computers for the Y2K bug;
  6. Offshoring: moving a whole factory or production facility and moving it to another country aiming to profit from lower production cost by having cheaper labor, lower taxes, sunsidized energy and lower health-care costs (usually in a context of European or American companies offshoring a factory to countries like India and China);
  7. Supply-Chaining: a method of collaborating horizontally (among suppliers, retailers and customers) to create value, usually by balancing factors to get the most reliable, low-cost delivery system in place combined with coordinating disruption-prone supply with hard-to-predict demand;
  8. Insourcing: the delegation of operations or jobs from production within a business to an internal (but ‘stand-alone’) entity (such as a subcontractor) that specializes in that operation, for example UPS handling global supply chains;
  9. In-forming: being able to find (in contrast to search) anything you want (by searchengines like Yahoo!, Google and Windows Live), enabling people to focus time, attention and brainpower on being creative or productive, not looking for stuff;
  10. The Steroids: certain technologies amplifying the other flatteners:
    1. The growth of computational capability, storage capability and input/output capability;
    2. Breakthroughs in instant messaging and file sharing;
    3. Breakthroughs in making phone calls over the internet;
    4. Videoconferencing;
    5. Advances in computer graphics;
    6. New wireless technologies and devices;

These ten flatteners lead to something Friedman calls “triple convergence“: first, creating a new, flatter, global playing field stimulating businesses and individuals to adopt new habits, skills and processes to get the most out of it, second, stimulating businesses and individuals to move from vertical means of creating value to more horizontal ones and, third, to enable a whole new group of people (China, India and the former Soviet Empire) to join this playing field. Really dealing with this triple convergence needs a lot of sorting out to be done.

The effects of globalization, flattening and triple convergence are best described by the free-trade theory of comparative advantage (David Ricardo) which stipulates that if each nation specializes in the production of goods in which it has comparative cost advantage 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. This, in contrast of the lump of labor theory, the notion that there is a fixed lump of labor in the world and that once that lump is gobbled up, there won’t be any more jobs to go around.

The free-trade theory of comparative advantage means that also individuals have to find their comparative advantage, to make themselves “untouchable” (a person whose job cannot be outsourced, digitized or automated). Consequently, either being “special or specialized” (jobs that are so special or specialized that they can never be outsourced, automated or made tradable by electronic transfer), “localized and anchored” (jobs that involve specific local knowledge or require face-to-face or personalized interaction) or becoming “new middle”. Friedman defines a large middle-class group of people, whose job will be tradable thanks to the ten flatteners. They will have to adapt to become the new middlers by becoming great collaborators and orchestrators, great synthesizers, great explainers, great leveragers, great adapters, passionate personalizers or great localizers. Young people, not yet working, will have to learn how to learn, be passionate and curious, play well with others and combine right and left brain to compete in this new world.

Countries, on their part, have to adapt differently. America, for example, is in a crisis now, caused by a declining number of scientists and engineers, a declining level of top-students, a lack of ambition, a declining level of education, a relatively low government spending on education and a lag in information infrastructure. Resolving this needs “compassionate flatism”, built around five action areas: leadership, muscle building (better education and import knowledge from other countries), cushioning (facilitate the transition form old middle to new middle by social security systems), social activism (good global citizenship) and parenting (having parents set good examples for their children).
Developing countries can only profit from the flattening world by applying the basic formula for economic success: reform wholesale, reform retail, plus good governance, education, infrastructure and the ability to glocalize (having a culture that is open to foreign influences and ideas and has a sense of national solidarity and a focus on solidarity and collaboration).

Companies have to create value by creativity and imagination, take advantage of all the new tools for collaboration, tailor to the customers exact needs (or enable the customer to do so), collaborate (because the next layers of value creation are to difficult for a single firm of department), regularly analyze and optimize their business, outsource to win not to shrink and be a good global citizen.

However, the world is
not flat at this moment and even more, Friedman cannot predict the extent to which the world will flatten eventually. He determines several forces impeding the flattening process: Some people are just too sick to compete in the flattened world, some people are too disempowered (they don’t have the tools, skills or infrastructure to participate), some people are too frustrated (extremists who don’t want to participate) and there is a constraint of natural resources.

Some are concerned that a flattening world will threaten cultures. Friedman argues that Americanism may be the dominant culture, but believes that especially Uploading, In-forming and The Steroids will preserve and strengthen cultures. Even more, he believes that a certain state of economic interdependence between countries will make countries avoiding conflicts, to protect the equity they have built up (the Golden Arches Theory of Conflict Prevention or the Dell Theory of Conflict Prevention, named after the fact that economic interdependent countries usually have McDonald’s and are part of a global supply chain like Dell’s).

To conclude it all, Friedman makes a strong point promoting imagination: the creative imagination of 11/9 (the fall of the Berlin Wall) in contrast of the destructive imagination of 9/11. Societies should have dreams (“does your society have more memories that dreams or more dreams than memories?”), facilitate imagination, be open and exchange ideas and create positive role models for their children, so that the future children can act on imagination and can leverage the flattened world.

Criticism

Friedman’s Ten Flatteners aren’t actually ten flatteners, or, at least, they aren’t evenly balanced. The first three flatteners are presented as being the foundation of the other flatteners (pp. 91-92), while the tenth flattener is the combination of several technologies amplifying the other flatteners (p. 188). Making this distinct difference himself, it seems more likely that there are really 3 flatteners (11/9/89, 8/9/95 and work flow software), triggering 6 new developments (uploading, outsourcing, offshoring, supply-chaning, insourcing and in-forming), amplified by several technologies.

In the first chapter, Friedman states the first wave of globalization (Globalization 1.0) was about competing globally with countries (1492-1800), Globalization 2.0 was about competing globally with multinational companies (1800-2000) and Globalization 3.0 is all about individuals collaborating and competing globally (2000 and on). Countries, companies and individuals. However, discussing the implications of the flattening world, Friedman discusses “America and the Flat World” and “Developing countries and the Flat World” (Countries, although not discussing Europe), “Companies and the Flat World” (Companies) and “Geopolitics and the Flat World”, never discussing individuals, the basis of Globalization 3.0.

This is only a part of my criticism on the structure of the book. Where the first part is clearly devided in introduction, flatteners, the effect of the flatteners and the fact that the flattening has consequences, the second part is a less well-structured combination of explaining the implications for different stakeholders.

Although it is a book on the flattened world (and promoting itself as “a brief history of the twenty-first century”), the main focus is on the U.S. situation, especially chapter 5 to 10 (pp. 261-393) and 15 (pp. 543-573), which is almost contradictionary to the aim (explaining “how and why globalization has shifted into warp drive”) and subtitle of the book (“a brief history of the twenty-first century”). Also, the Americanized view of the author is irritatingly present in his superficial view on Islam and Mid-Eastern countries. The effect of 9/11 and anti-Islamism is clearly present what makes it a great mark of time, but a less well-balanced and objective document on the flattening world.

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