Notes on World is Flat

Tom Friedman Speaking at MIT The World is Flat May, 2005 Book idea came from his trip to Bangalore, India in Feb., 2004 to interview workers about outsourcing. “The global economic playing field is being leveled.” March 15- Dec. 15 of 2004, took time off from NY Times to write the book. Chapter 1: While You Were Sleeping Went back to India Then to Dalian, China – outsourcing capital of the Japanese world Jet Blue home reservation system based in Salt Lake City McDonald’s call center in Colorado Springs Eras of Globalization: Globalization 1.0: 1492-early 1800s – size of world shrunk from size large to size medium – countries globalizing for imperialism, power, natural resources Globalization 2.0: early 1800s-2000 – size of world shrunk from size medium to size small – companies globalizing – multinationals Globalization 3.0: happened while you were sleeping – 2000 – present – size of world shrunk from size small to size tiny – individuals and small groups globalizing – every color of rainbow can plug and play – not just white Westerners Chapter 2: The 10 Days That Flattened The World 1) 11/9/89 – Berlin Wall Came Down – see world as single, flat plain, no more East vs. West, North vs. South; plus Windows operating system came out 5 months later 2) 8/9/95 – Netscape (Mountain View, CA) went public – offering price $28, opened at $71, closed at $56 1. 1st commercial browser brought internet alive 2. open standard transmission protocols – opened internet to all 3. triggered dot.com boom – dot.com bubble – led to $1 trillion investment in fiber optic cable over 5 years – gift that keeps on giving – just change switches at each end to increase capacity – allowed more people in more places to communicate for free 3) Mid 1990s – Work Flow – software and standards that allowed work to flow – applications connecting to other applications – people can work together virtually like never before – created global platform for multiple forms of collaboration – Genesis moment

6 New Forms of Collaboration: 4) Outsourcing – year 2000 5) Offshoring – year China joins WTO 6) Open sourcing – free operating systems and software – anti-Microsoft movement e.g. Linux operating system, Firefox web browser, MIT Open University 7) Supply chaining – WalMart – designing global supply chain down to last atom of efficiency 8) Insourcing – performing internal logistics for other companies, making them effectively marketing shells that don’t touch any of their own products – UPS – “Your World Synchronized” 9) Informing – Google, search engines, Tivo – can collaborate all by myself Last Flattener: 10) Steroids – wireless, voice over the internet (VOIP), file sharing – turbocharging all 5 of new forms of collaboration – can do any of them from anywhere Chapter 3 – Triple Convergence 1) First convergence – All 10 of flatteners converged into tipping point in year 2000 – they all started to work together to create the flat world – a new platform for sharing multiple forms of knowledge and work irrespective of time, distance, geography, and increasingly, language 2) Second convergence – changes in habits and business practices from vertical to horizontal – no more vertical silos of command and control – value is created horizontally, changing who we connect and collaborate with – e.g. Southwest boarding passes 3) Third convergence – just as world went flat, 3 billion people walk on to the playing field from India, China, and the former Soviet empire – even if only 10% can plug and play, that’s 300,000,000 new players – twice the size of the American workforce These 3 convergences have shaped the brief history of the 21st century – as big as Gutenberg and the printing press Fundamental inflection point – just as world got flat, a political perfect storm occurred to distract America: 1) 9/11 2) Enron – every CEO is guilty until proven innocent – no one paying attention to needs of businesses

3) Dot.com bust – thought globalization was over No such thing as an “American” job any more. Reform Wholesale (1990s) versus Reform Retail (2000s) – Virgin of Guadalupe statues and Ramadan lanterns all made in China Unflat World: (not participating in flat world) 1) Too Sick – rural India, rural Africa 2) Too Unable – rural India and rural China – need stepstool – challenge to local governance - NGOs 3) Too Frustrated – Arab and Muslim world – feel left behind 4) Too Many Toyotas – 3 billion people want the American dream – house, car, toaster, microwave – need alternative sources of energy or will use up existing oil – competing with China for oil – China’s interests are oil and Taiwan Quiet Crisis – generation of Americans who went into engineering and science motivated by Sputnik and Kennedy’s vision of putting a man on the moon are nearing retirement age – had been importing their replacements from India and China but no more – with flat world, no need to immigrate – can stay in India and China with their families and culture but have good paying jobs – also, can’t get in to U.S. because of border closing/tightening in response to 9/11 Current Administration focusing on dismantling old New Deal just when we need a new New Deal – Social Security should not be a priority for the government Global market increases supply of labor and supply of consumers – as it gets bigger, it also gets more complex, producing new jobs and new niches Knowledge people have to move to another knowledge job (horizontally) Non-knowledge people have to move into knowledge world (vertical to horizontal) – absolute priority for government should be providing higher education for everyone who wants it Last Chapter – 11/9 or 9/11? Tools of collaboration are available to everyone (good and evil) – what will you do with them? Competing forms of imagination – positive and negative – need to get more people to have positive imagination – huge challenge – export hope and not fear eBay – virtual country - $100 billion economy – 38 million people – everybody wants a blue star