The World is Flat

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The World is Flat

• Thomas L. Friedman

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Flattener 1When the Walls came Down and the
Windows Went Up

• The fall of the Berlin Wall tipped the balance of
  power across the world toward those advocating
  democratic, free-market-oriented governance.
• It also allowed us to think about the world as a
  seamless whole.
• The first version of the Windows operating system
  shipped in 1985 and the real breakthrough version
  Windows 3.0 shipped on May 22, 1990.

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Flattener 1When the Walls came Down and the
Windows Went Up

• The diffusion of personal computers, fax
  machines, Windows, and dial-up modems connected
  to a global telephone network all came together
  in the late 1980 and early 1990s to create the
  basic platform that started the global
  information revolution.

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Flattener 2When Netscape Went Public 1995

• Today we take the browser technology for granted,
  but it was actually one of the most important
  inventions in modern history.
• Netscape helped make the Internet truly
  interoperable.
• Netscape eventually fell victim to overwhelming
  competitive pressure from Microsoft.

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Flattener 3Work Flow Software

• When the walls went down, and the PC, Windows,
  and Netscape browser enabled people to connect
  with other people as never before, it did not
  take long before all these people who were
  connecting wanted to do more than just browse and
  send e-mail, ionstant messages, pictures, and
  music over this Internet platform.
• They wanted to shape things, design things,
  create things, sell things, buy things, keep
  track of inventories, do somebody elses taxes,
  and read somebody elses X-rays from half a world
  away.
• And they wanted to do any of these things from
  anywhere to anywhere and from any computer to any
  computer-seamlessly.

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Flattener 4Open-Sourcing

• The Open Source Movement involves thousand of
  people around the world coming together online to
  collaborate in writing everything from their own
  software to their own operating systems.
• The word Open Source comes from the notion that
  companies or ad hoc groups would make available
  online source code- the underlying programming
  instructions that make a piece of software work-
  and then let anyone who has something to
  contribute improve it and let millions of others
  jus download it for their own use for free.

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Flattener 5Outsourcing

• Y2K led to this mad rush for Indian brainpower to
  get the programming work done. The Indian
  companies were good and cheap, but price wasnt
  first on customers minds- getting the work done
  was, and India was the only place with the volume
  of workers to do it. Then the dot-com boom comes
  along right in the wake of Y2K, and India is one
  of the few places where you can find surplus
  English-speaking engineers, at any price, because
  all of those in America have been scooped by
  e-commerce companies.
• After the dot-com bubble burst, American IT
  companies needed low cost Indian engineers.

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Flattener 6Offshoring

• Every morning in Africa, a gazelle wakes up
• it knows it must run faster than the fastest
  lion or it will be killed.
• Every morning a lion wakes up.
• It knows it must outrun the slowest gazelle or
  it will starve to death.
• It doesnt matter whether your are a lion or a
  gazelle.
• When the sun comes up, you better start running.
• Ever since the Chinese joined the WTO, both they
  and the rest of the world have had to run faster
  and faster.

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Flattener 6Offshoring

• This is because Chinas joining the WTO gave a
  huge boost to another form of collaboration-offsho
  ring. Offshoring, which has been around for
  decades, is different from outsourcing.
  Outsourcing means taking some specific, but
  limited, function that your company was doing
  in-house such as research, call centers, or
  accounts receivable- and having another company
  perform that exact function for you and then
  reintegrating their work back into your overall
  operation.
• Offshoring, by contrast, is when a company takes
  one of its factories that is operating in Canton,
  Ohio, and moves the whole factory offshore to
  Canton, China. There, it produces the very same
  product in the very same way, only with cheaper
  labor, lower taxes, subsidized energy, and lower
  health-care costs.
• Just as Y2K took India and the world to a whole
  new level of outsourcing, Chinas joining the WTO
  took Beijing and the world to a whole new level
  of offshoring-with more companies shifting
  production offshore and then integrating it into
  their global supply chains.

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Flattener 7Supply-Chaining

• Supply chaining is a method of collaborating
  horizontally- among suppliers, retailers, and
  customers- to create value.
• Supply chaining is both enabled by the flattening
  of the world and a hugely important flattener
  itself, because the more these supply chains grow
  and proliferate, the more they force the adoption
  of common standards between companies the more
  they eliminate points of friction at borders, the
  more the efficiencies of one company get adopted
  by the others, and the more they encourage global
  collaboration.
• That is how Wal-Mart became the worlds biggest
  retailer.
• But as workers, and local retailers, we are
  ambivalent or hostile to these supply chains
  because they expose us to higher and higher
  pressures to compete, cut costs, and also at
  times, cut wages and benefits.

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Flattener 8Insourcing

• Go online and order a pair of Nikes from its Web
  site, Nike.com. The order, though, is actually
  routed to UPS and a UPS employee picks, inspects,
  packs, and delivers your shoes from Nike only
  from a warehouse in Kentucky managed by UPS.
• This process is called insourcing a whole new
  form of collaboration and creating value
  horizontally, made possible by the flat world and
  flattening it even more.
• Insourcing came about because once the world went
  flat, the small could act big- small companies
  could suddendly see around the world.

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Flattener 8Insourcing

• Consider the collaboration today among eBay
  sellers, UPS, PayPal, and eBay buyers. Say I
  offer to sell a bicycle on eBay and you decide to
  buy it. I e-mail you a PayPal invoice, which has
  your name and mailing addres on it. At the same
  time, eBay offers me an icon on its Web site to
  print out a UPS mailing label to you. When I
  print that mailing label on my own printer, it
  comes out with a UPS tracking bar code on it. At
  the same time, UPS, through its computer system,
  creates a tracking number that corresponds to
  that label, which automatically gets e-mailed to
  you- the person that bought the bicycle- so you
  can track the package by yourself, online, on a
  regular basis and know exactly when it will reach
  you.

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Flattener 9In-Forming

• Googles goal is to make easily available all the
  worlds knowledge in every language. And Google
  hopes that in time, with a PalmPilot or a cell
  phone, everyone everywhere will be able to carry
  around access to all the worlds knowledge in
  their pockets.
• In-forming is the individuals personal anallog
  to opensourcing, outsourcing, insourcing,
  supply-chaining, and offshoring.

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Flattener 9In-Forming

• Informing is the ability to build and deploy your
  own personal supply chain- a supply chain of
  information, knowledge, and entertainment.
• Informing 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.
• Informing is searching for knwoledge.

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Flattener 10The Steroids

• The steroids are the new technologies that
  amplify and turbocharge all the other flatteners.
  They are taking all the forms of collaboration
  among outsourcing, offshoring, open-sourcing,
  supply-chaining, insourcing, and in-forming, and
  making it possible to do each and every one of
  them in a way that is digital, mobile, virtual
  and personal.
• The steroids are
• Speed
• Storage
• Wireless technology
• Devices

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Convergence

• The ten flatterners needed time to converge and
  start to work together in a complementary,
  mutually enhancing fashion.
• Around 2000 (Y2K) began the convergence with the
  creation of a global, webenabled playing field
  that allows for multiple forms of
  collaboration-the sharing of knowledge and work,
  in real time without regard to geography,
  distance, or, in the near future, even language.
• This is what I mean when I say the world has been
  flattened. It is the complementary convergence of
  the ten flatterners, creating this new global
  playing field for multiple forms of
  collaboration.
• The flattening of the world is largely
  unstoppable, and holds out the potential to be as
  beneficial to a society as a whole as past market
  evolutions have been. There is only one message
  you have to constantly upgrade your skills.