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Seven Forces that Flatten the World
Journalist Thomas L. Friedman identifies a set of developments responsible for enhancing the process of globalization in the past decade. He identifies seven developments that are built on what he calls a flat world platform and spur globalization.
In his book, The World is Flat, Pulitzer Prize winning journalist Thomas L. Friedman identifies ten world “flatteners”—that is, ten events, developments or processes that have lead to increasing globalization in the past decade. Of course, notes Friedman, globalization has been occurring in fits and starts since the mid-nineteenth century (with a notable timeout during the Cold War ). However, the most recent phase of globalization (what Friedman calls Globalization 3.0) is characterized by a set of processes distinct to this last phase.
Three of the ten globalizing factors (“world flatteners”) comprise what Friedman calls the “flat world platform.” These three factors provide the conditions—or platform—upon which the other seven globalizing processes proceed. The platform provides the vision, know-how, and technological capacity for the other processes of globalization.
Seven Forces that Flatten the World
1. Uploading: Community Created Information
Answers to questions that affect entire populations, news, encyclopedic information, and computer source code all used to be the product of experts. However, says Friedman, in a new world where communication technology has flattened the playing field, expert views and opinions are giving way to the creation of a democratically created global store of knowledge. According to Friedman, almost anyone (for instance, a teenager with a video phone, a computer and internet connection in his basement) can create content that may be read by billions of people world wide.
Friedman refers to the ability to share all kinds of information, videos, software code, pictures, etc. via the internet as “uploading.” He also notes that one of the most powerful aspects of this capacity to upload is that it is not merely isolated individuals putting their content on the web, but ad hoc communities have formed to create and self-police the quality of the content. Friedman identifies four different “uploading” communities.
Friedman notes that there are dangers to a flat playing field when it comes to creating global knowledge and information. Though communities may self-police to try to ensure that what is released as news, software, or encyclopedia information is true and reliable, since no one is in charge quality control is not perfect. “Volunteer vandals with poison-pen intellects” now have the ability to pass off inaccurate or just down right false information as true, thus misleading millions of people. Of all the forces flattening the world, says Friedman, uploading has the potential to be the most disruptive.
Friedman describes “outsourcing” as the ability to take a specific but limited task or function that is performed within one company and having the same function performed by another company. The outsourced task is then reintegrated back into the overall operation.
What is particularly notable about the outsourcing within the current phase of globalization is that it is no longer bound by the same geographic and time constraints as previously. Companies can not only outsource to other companies on the other side of the globe, but because of differences in time zone, are not limited to an eight hour work day. When project is parsed up among work teams around the globe, work can proceed 24 hours a day.
Friedman describes the example of how India became a major outsourcing destination for a range of high-skill jobs and tasks. During the Internet boom of the late 1990s investors poured huge sums of cash into purchasing and laying fiber optic cable around the world. This provided a very fast way to connect, share data, share information, etc. across the globe. When the Internet bubble burst, however, man American companies were forced into bankruptcy and the miles and miles of fiber optic cables were sold for pennies on the dollar. Suddenly, the cost of using these fiber optic cables was almost nothing. India was now positioned to offer the services of a highly trained pool of labor to the American (and world) market at very inexpensive rates (compared to what it would cost to do the same job in the U.S.).
Friedman defines “offshoring” as the situation where a company moves or builds an entire factory or production facility in another country. Friedman says that while outsourcing involves farming out a particular task or function to another company, offshoring involves moving, for instance, an entire production facility to another country and then integrating it into the company’s global processes.
Friedman notes that when one corporation is able to offshore production of a product to a country (for instance China) where there is a large, inexpensive labor pool, other corporations with similar products will be pressured to do the same in order to remain competitive.
In the case of China, Friedman describes how the foreign desire to access China’s cheap labor pool served to motivate China to join the World Trade Organization (WTO). By joining the WTO and agreeing to operate according to WTO procedures, China became much more attractive to outside investment. However, Friedman points out, while offshoring may make economic sense it is not without its hazards—for example, the pressure to compete with China is driving wages and labor standards lower across the globe.
Friedman describes supply-chaining as “a method of collaborating horizontally—among suppliers, retailers, and customers—to create value.” Supply-chaining is not about products so much as about information. Information on what a customer purchases is relayed almost instantly back to the producer who then knows what to make and ship to the retailer who also knows which store or outlet to direct the product.
Friedman identifies a series of characteristics of supply-chaining:
Two challenges facing supply-chaining are:
Friedman says that creating supply-chaining efficiencies can be prohibitively expensive or simply outside the core competency of many companies. A new form of horizontal collaboration, which Friedman calls “insourcing,” has developed (Friedman uses UPS as an example) where a company will work with other companies to not only “take them global” but to make them feel local. For instance, UPS may be asked by one of its customers to come in and not only advise them on manufacturing, packaging, and delivery processes, but even take over managing the company’s global supply-chain process.
Friedman describes this process as “insourcing” because it involves bringing another company (like UPS) deeply into another company to carry out certain supply-chaining functions (sometimes taking over other functions of the other company). In a sense, UPS has taken the supply-chaining insights and techniques pioneered by Wal-Mart, and created a standalone service. A company that does “insourcing” does not sell a product through a supply-chain. It packages the supply-chain technology and service and sells that.
Friedman says, “There is no bigger flattener than the idea of making all the world’s knowledge, or even just a big chunk of it, available to anyone and everyone, anytime, anywhere.” The ability for individuals to use web-based search engines to find almost any kind of information they want is a total equalizer. Individuals no longer have to rely on editors, libraries, television, or movie theaters to get the information and entertainment they want.
Before the search engine empowered web, an individual’s access to information was limited by such things as geography (rural towns didn’t fare so well), access to repositories of information (for instance, university libraries were limited to students and professors), and time. Friedman says that by providing almost instant access from a home computer to an increasingly vast amount of information and other resources (e.g., music, video, maps, photographs, etc) makes individuals into their own supply-chains. Individuals are now their own researchers, editors, and consumers. Friedman calls this ability, “informing.”
7. Steroids: Flatteners that Enhance other Flatteners
Friedman calls the new technologies that amplify and increase the effectiveness of all other flatteners “steroids.” Friedman identifies six “steroids” which increase the speed, capacity, and efficiency of other “flatteners.”
Data and Methods:
Based in large measure on interviews conducted as part of the author's work as a journalist.
Friedman, Thomas L. 2006. The World is Flat. New York: Farrar, Straus and Giroux. Ch. 2, pp. 50-200.
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