The World Is Flat

This is the book I'm currently reading. About two years old but still relevant. Below is the summary I've got from wikipedia.

In the book, Friedman recounts a journey to Bangalore, India, when he realized globalization has changed core economic concepts. He suggests the world is "flat" in the sense that globalization has leveled the competitive playing fields between industrial and emerging market countries. In his opinion, this flattening is a product of a convergence of personal computer with fiber-optic micro cable with the rise of work flow software. He termed this period as Globalization 3.0, differentiating this period from the previous Globalization 1.0 (which countries and governments were the main protagonists) and the Globalization 2.0 (which multinational companies led the way in driving global integration).

Friedman recounts many examples of companies based in India and China that, by providing labor from typists and call center operators to accountants and computer programmers, have become integral parts of complex global supply chains for such companies as Dell, AOL, and Microsoft. Friedman's Dell Theory of Conflict Prevention is discussed in the book's penultimate chapter.

Friedman repeatedly uses lists as an organizational device to communicate key concepts, usually numbered, and often with a provocative label. Two example lists are the ten forces that flattened the world, and three points of convergence.


Ten flatteners

Friedman defines ten "flatteners" that he sees as leveling the global playing field:

#1: Collapse of Berlin Wall--11/'89: The event not only symbolized the end of the Cold war, it allowed people from other side of the wall to join the economic mainstream. (11/09/1989)

#2: Netscape: Netscape and the Web broadened the audience for the Internet from its roots as a communications medium used primarily by 'early adopters and geeks' to something that made the Internet accessible to everyone from five-year-olds to eighty-five-year olds. (8/9/1995)

#3: Workflow software: The ability of machines to talk to other machines with no humans involved. Friedman believes these first three forces have become a “crude foundation of a whole new global platform for collaboration.”

#4: Open sourcing: Communities uploading and collaborating on online projects. Examples include open source software, blogs, and Wikipedia. Friedman considers the phenomenon "the most disruptive force of all."

#5: Outsourcing: Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components, with each component performed in most efficient, cost-effective way.

#6: Offshoring: Manufacturing's version of outsourcing.

#7: Supply chaining: Friedman compares the modern retail supply chain to a river, and points to Wal-Mart as the best example of a company using technology to streamline item sales, distribution, and shipping.

#8: Insourcing: Friedman uses UPS as a prime example for insourcing, in which the company's employees perform services--beyond shipping--for another company. For example, UPS itself repairs Toshiba computers on behalf of Toshiba. The work is done at the UPS hub, by UPS employees.

#9: In-forming: Google and other search engines are the prime example. "Never before in the history of the planet have so many people-on their own-had the ability to find so much information about so many things and about so many other people", writes Friedman.

#10: "The Steroids": Personal digital devices like mobile phones, iPods, personal digital assistants, instant messaging, and voice over Internet Protocol (VoIP).

Triple Convergence

In addition to the ten flatteners, Friedman offers "the triple convergence," three additional components that acted on the flatteners to create a new, flatter global playing field.

Up until the year 2003, the ten flatteners were semi-independent from one another. However, around the year 2003, all the flatteners converged with one another. This convergence could be compared to complementary goods, in that each flattener enhanced the other flatteners; the more one flattener developed, the more leveled the global playing field became.

After the emergence of the ten flatteners, a new business model was required to succeed. Instead of collaborating vertically (the top-down method of collaboration, where innovation comes from the top), businesses needed to begin collaborating horizontally. Horizontalization means companies and people collaborate with other departments or companies to add value creation or innovation. Friedman's Convergence II occurs when horizontalization and the ten flatteners begin to reinforce each other.

After the fall of the Berlin Wall, countries that had followed the Soviet economic model—including India, China, Russia, and the nations of Eastern Europe, Latin America, and Central Asia—began to open up their economies to the world. When these new players converged with the rest of the globalized marketplace, they added new brain power to the whole playing field and enhanced horizontal collaboration across the globe. In turn, Convergence III is the most important force shaping politics and economics in the early 21st century.