Executive Reading: October

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The World Is Flat

A Brief History of the Twenty-First Century

By Thomas L. Friedman
Some 400 years after Christopher Columbus set out to prove the world was round, Thomas Friedman has set out to prove the opposite in his fascinating book “The World Is Flat.” Not topographically, of course; he claims the “triple convergence” of better technology, tighter business processes and open trade with China and India have leveled the international business playing field to an unprecedented degree.
    Without being an alarmist, Friedman underscores the ways in which our national competitive advantage is shifting. He voices some common fears but emerges generally optimistic about the future in what he calls “the third great era of globalization.”
    According to the author, the first era, phase 1.0, lasted roughly from 1492 (when Columbus opened trade between the Old World and the New) through 1800, when countries and “muscles” (horsepower, wind power and steam power) reigned supreme. Then came phase 2.0, from 1800-2000, the rise of multinational corporations and the birth of a true global economy. Friedman believes that this next phase, 3.0, will be defined by “the newfound power of individuals to collaborate and compete globally.”
    While it seems early to be taking historical stock, or to characterize an “era” that is (by the author’s own estimation) only five years old, he makes an insightful and compelling case. Through numerous interviews, observation and pattern recognition, Friedman describes 10 key “flatteners” that have contributed substantially to “globalization 3.0;” he also explains why that doesn’t have to be such a bad thing.
    The flatteners he highlights are a number of key technologies and political events that enabled the world to work together better. They include the fall of the Berlin Wall; the day Netscape went public (and the subsequent ubiquity of information on the internet); workflow software, open-sourcing, outsourcing, streamlining the supply-chain and our ever-more-powerful personal telecommunication devices. Without praising or condemning these developments, he shows that they are forces to be reckoned with, as they will continue to shape and inform the way the world does business.
    Friedman also makes the case that some of these developments, such as outsourcing, tend to be oversimplified for the American voter but are much more complicated than we tend to think. To illustrate the point that “outsourcing is not just for Benedict Arnolds, it’s also for idealists,” he talks about a social entrepreneur who helped English-speaking locals in economically devastated Cambodia start a data-entry business. In effect, “teaching them how to fish.” Employees work six hours a day, six days a week and earn $75 per month (in a country where $400 is the average annual income). Further proceeds are put into an education fund for all employees.
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