Why The World is Now Flat

Thomas L. Friedman has written an incredible book  that demonstrates the process by which the convergence of technology and events allowed India, China, and so many other countries to become part of the global supply chain for services and manufacturing. This creating an explosion of wealth in the middle classes of the world’s two biggest nations giving them a huge new stake in the success of globalization. This “flattening” of the globe requires us to run faster in order to stay in place or get left behind. Friedman has provided a continuation of the analyses that I started 15 years ago that resulted in my coining the phrase “The New Work Order”. We now have the full story that takes us from the First Information Revolution that was launched with the beginning of the writing of books about 6,000 B.C. to the present situation. When I hear Jamaican some politician talking about going back to the factory building era I cringe. Recently I heard Peter Bunting outline some far reaching ideas to attract creative people to relocate to Jamaica by virtue of special Income Tax Laws. He is also proposing the rebuilding of this economy abound what are our real comparative advantages; our culture, creativity and the Jamaica branding. His ideas are totally consistent with the present situation in which “The World is Flat”. I hope that those who have ears to hear, will actually hear.

Flattener #1: When 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. There was no longer any place for inefficient economies the hide or be subsidized. Within the same time frame the first version of the Windows operating system was shipped in 1985. The real breakthrough version Windows 3.0 was actually shipped on May 22, 1990. This event facilitated The Wired World. The result was a diffusion of personal computers, fax machines and dial-up modems connected to a global telephone network that all came together in the late 1980 and early 1990’s. This created the basic platform that started the global information revolution.

Flattener #2: When Netscape Went Public 1995
Today we take the browser technology for granted but this 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.

Flattener #3: Work Flow Software
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, instant 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 else’s taxes, read somebody else’s X-rays from half a world away. They wanted to do any of these things from anywhere to anywhere and from any computer to any computer-seamlessly

Flattener #4: Open-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.

Flattener #5 Out-Sourcing
Y2K led to this mad rush for Indian brainpower to get the programming work done. Indian companies were good and cheap and India was the only place with the volume of workers to do it. Out-Sourcing means taking some specific, but limited, function that your company was doing in-house such as research, call centers, or accounts receivable. You then have another company perform that exact function for you then reintegrating their work back into your overall operation. India is one of the few places where you can find surplus English-speaking engineers at any price. After the dot-com bubble burst American IT companies needed low cost Indian engineers and they were able to fill the gap.

Flattener #6: Off-Shoring
This is when a company takes one of its factories that is operating in Canton, Ohio and moves it to Canton, China or from Kingston, Jamaica to Kingstown, St. Vincent.  There, it produces the very same product in the very same way,
only with cheaper costs.

Flattener #7: Supply-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. The more these supply chains grow and proliferate, the result is that:

  • they force the adoption of common standards between companies
  • they eliminate points of friction at borders
  • the efficiencies of one company get adopted by the others
  • they encourage global collaboration.

That is how Wal-Mart became the world’s biggest retailer.

Flattener #8: In-Sourcing
If you go online and order a pair of Nikes from its Web site, Nike.com the order is actually routed to UPS. Here a UPS employee picks, inspects, packs, and delivers your shoes from Nike from a warehouse in Kentucky managed by UPS. Nike does not touch the product. The design, out-source, off-shore and then in-source.

Flattener #9: In-Forming
Google’s goal is to make easily available all the world’s knowledge in every language. They hope that in time, with a PalmPilot or a cell phone everyone everywhere will be able to carry around access to all the world’s knowledge in their pockets. In-forming is the individual’s personal analog to open-sourcing, out-sourcing, in-sourcing, supply-chaining and off-shoring. In-forming is the ability to build and deploy your own personal supply chain. This is a supply chain of information, knowledge, and entertainment. In-forming is about self-collaboration. You can now become your own self-directed and self-empowered researcher, editor selector of entertainment without having to go to the library or the movie theater or through network television. In-forming is searching for knowledge and now having the capability to access it any time and anywhere. If you can not now do this, it is by your own choice.

Flattener #10: The Steroids
The steroids are the new technologies that amplify and turbo charge all the other flatteners. They are taking all the forms of collaboration among out-sourcing, off-shoring, open-sourcing, supply-chaining, in-sourcing and in-forming. It is now 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 all available in a variety of devices. The Apply IPod represents an icon of this process. Recently Seagate announced the launch of a 750 Gigabyte hard drive called the barracuda, with a One terabyte to follow soon. The 10 flatterners needed time to converge and start to work together in a complementary, mutually enhancing fashion. Around 2000 (Y2K) the convergence began with the creation of a global, web-enabled playing field that allows for multiple forms of collaboration and the sharing of knowledge and work in real time without regard to geography and distance. in the near future, even language will not be a factor of life.

This is The Meaning of Flattened. The complementary convergence of the 10 flatteners created this new global playing field for multiple forms of collaboration. The Flattening of the World is largely unstoppable. This 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, or get left behind. Understand these forces and benefit, Ignore then and you will fall victim.