Think Flat
by Stephen Pratt
A little over a year ago Tom Friedman declared that "The World is Flat" in his best selling book. Agree with Tom or not (we agree on some points and respectfully see it differently on others) he has opened a great debate and a frenzy of activity. Since then the business world seems to have adopted Tom’s language, asking "What is our flat world strategy?" or "How can we compete in the Flat World?" or "Will that new competitor from China eat our lunch?"
Each company’s reaction differs, but the initial symptoms of Flat World Anxiety Disorder seems to be spontaneous statements such as "We better do something fast about our cost structure so the new guy from ______________ (fill in the blank with your favorite emerging economy) doesn’t eat our lunch."; often followed by rapid fire trips to Shanghai, Bangalore, Moscow, Prague, and Rio.
We see many companies’ (the better ones) creative juices kicking in as to how the Flat World can help them compete. And they almost always see their global workforce as a set of brains rather than just arms and legs. "Can we use a bunch of PhD mathematicians in Prague to out-think our competitors in credit analysis?" "Can we accelerate time to market by using the simple fact that the world spins - the 24 hour work day?" "Can we create a company where no competitor can possibly have a leaner, more operationally excellent business model?"
My favorite quote from the World Economic Forum in Davos this January was from Bill Gates saying "Anywhere there are a billion people, there are bound to be some smart ones. And we want them working for Microsoft." That is Thinking Flat.
Remarkably we also see some companies taking the ostrich strategy and are hoping the whole thing just goes away. "We are different." "Doesn’t apply to us." "Won’t work because..." Luckily the list of these companies is shrinking.
Well let’s face it - any change is trading one set of problems for another. Nothing is perfect and not much is easy or simple these days. So on this blog, tell us the good stuff and the bad stuff - but keep it real. How are the changes in the Flat World helping your company be a better competitor? How is it affecting your people? What have you learned? How does it affect you personally? Let us know. One thing is certain - The Flat World is here to stay. And we all will be better off by having a real dialog on the topic. Just please remember to Think Flat.


Comments
Some counterpoints to what Friedman wrote in the words of Shahi Tharoor who would be the next Secy General of the UN. Interesting
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THE new book by the New York Times' columnist Thomas L. Friedman, The World is Flat, combines the vaulting ambition, limpid clarity, irreverent wit, and analytical passion that readers have come to expect from his columns and three previous books. The World is Flat is written with an abundance of those qualities which have made Friedman that rare figure in American letters, an effective populariser of ideas about the world at large to an audience whose instinctive insularity cannot be underestimated.
In performing that valuable service, Friedman has also acquired something of a reputation as a cheerleader for globalisation, a development in human history he embraces with unconcealed enthusiasm. The basic thesis of this book is consistent with his worldview, and articulated inconsiderable (and often compelling) detail. Stripped to its essence, this is that the "levelling of the playing field" which has occurred as a result of the overcapacity built up during the "dot-com boom" (particularly in technological infrastructure and international fibre-optic cabling) has "flattened the world", producing a convergence of opportunities that allows any company in any country anywhere the chance to join a new global supply chain in both services and manufacturing.
Fine — but my concern is with the sweeping conclusions he draws. I fear that in celebrating the flatness of his world he loses sight of more than one inconvenient hillock.
Friedman wrote some years ago that we have moved from a world dominated by superpowers to one dominated by supermarkets. Friedman's basic idea remains that geopolitics has ceded place to the primacy of globalised economics. In this book he builds on that perception to argue that the era of state domination has given way to a world flattened by networked global trade. But this analysis overlooks at least four fundamental realities that most of the world's people still wake up to.
The first is the nature of the state itself, whose withering away Friedman posits with an almost Marxian glee. Yet the state is still indispensable to most people. It provides, or should provide, physical security, law and order, economic infrastructure and basic services. For most people in the world, however, the problem is that their state is not strong enough to deliver on those vital requirements. One can rejoice at the rising living standards of Indians working at call centres, tracing lost luggage and reading CAT scans for Americans, but what is the condition of the country they return to? Friedman waxes lyrical about the Infosys campus outside Bangalore, an oasis I too have visited, which would not be out of place in the West — but the managers of Infosys have to organise their own electricity, their own "mass" transportation, their own health club, and so on, because these facilities are absent, unreliable or dilapidated in the city itself.
Oblivious to these?
More serious is Friedman's seeming obliviousness to the spectres of poverty, disease, and malnutrition stalking his flat new world. He writes of three billion people entering the global market, but forgets that most of them (and indeed three billion people overall) are living under $2 a day. The threat of the combination of poverty, conflict, famine and AIDS in sub-Saharan Africa — arguably the most elemental challenge facing humanity at the start of the 21st Century — features nowhere in the book.
Friedman's third (and given his theme, perhaps his most lamentable) omission is that of the digital divide. His eagerness to hail "levelling" and "flattening" makes sense in the West, since the Internet has certainly made information far more widely accessible there. But that is not yet true in the developing world, except for a tiny minority of the empowered. The stark global reality of the Internet today is that you can tell the rich from the poor by their Internet connections. The gap between the technological haves and have-nots is widening, both between countries and within them. The information revolution, unlike the French Revolution, is a revolution with a lot of liberté, some fraternité, and no egalité. So the poverty line is not the only line about which we have to think; there is also the high-speed digital line, the fibre optic line — all the lines that Friedman hails, but which exclude those who are literally not plugged in to the possibilities of his flat new world.
Finally, in advancing what Friedman calls his "Dell Theory of Conflict Prevention", under which no two countries will go to war if they are both part of the same globalised supply chain, he forgets that most human conflict is fuelled by emotions rather than calculations. Economics cannot explain everything. As Francis Fukuyama discovered before him, it is not yet time for "the end of history". Culture, religion, and national pride all continue to play their part in world affairs. In the flat world, maybe geography is history, but history itself is not yet history. Friedman, intent on his high-tech crystal ball, ignores the rear-view mirror.
But these four objections do not invalidate the worth of the book or its basic analysis, which is laid out with that mixture of research, extensive travel and personal anecdote that I am coming to think of as trademark Friedman. It's a stimulating — and, as this column shows, provocative — read.
Posted by: Kartik Matmari | August 1, 2006 06:28 PM
The full text of Shashi Tharoor's commentary on TOm Friedman's book is available at http://www.shashitharoor.com/articles/hindu/imperfections.php
Tharoor writes: 'His eagerness to hail "levelling" and "flattening" makes sense in the West, since the Internet has certainly made information far more widely accessible there.'
This may be true in part, but it is again a sweeping generalization. There are shining examples of the Internet stepping in as a grassroots leveller in emerging economies. Case in point: ITC eChoupal, a web portal that unlocks the potential of rural Indian farmers to strengthen the supply chain and make Indian agriculture globally competitive.
Significantly, ITC eChoupal was awarded the Wharton-Infosys Business Transformation Award (WIBTA) in 2004.
Posted by: Bijoy Venugopal | August 2, 2006 10:04 AM
Hey there
Some of the questions we'd need to answer to explore the trends and future of globalization are :
Q1: In the period to 2017, do you see globalisation:
a) Accelerating
b) Slowing down
c) Stalling
d) Going into reverse
e) Taking a very different direction - and why?
Q2: Overall, are the globalisation trends you see likely to be helpful, neutral or unhelpful for the corporate responsibility agendas?
a) Helpful
b) Neutral
c) Unhelpful
Q3: Which 2 countries do you see as a model (for good or ill) for the future of corporate responsibility / sustainability and why?
a) Brazil
b) China
c) EU
d) India
e) Japan
f) Middle East
g) Russia
h) South Africa
i) United States
j) Others
Q5: Which 1-2 issues are most likely to derail globalisation?
a) Climate Change
b) Conflict
c) Emergence of non US led global variants
d) Energy Availability
e) Human Rights
f) Non-energy natural resorce constraints
g) Pandemics
h) Poverty
i) Terrorism
j) Other
Q6: Do we need a radically new system of global governance?
a) Yes
b) No
c) Don't know
Q7: What needs to happen to generate the political will to create global governance structures?
Q8: How confident are you that voluntary initiatives - like the Global Compact and Global Reporting Initiative - will create a critical mass of leadership in corporate responsibility?
a) Very confident
b) Quite confident
c) Uncertain
d) Not confident at all
e) Confident that voluntarism will fail
Smiles
Yash
Reference: http://www.sustainability.com
Posted by: Yash Khanna | August 3, 2006 01:11 PM
The Otherside of the Flat World
As I was walking on the streets of Abids - the central shopping area of Hyderabad one hot Sunday afternoon, I couldnt help myself stop at the numerous road side book vendors selling books for dirt cheap prices.
I was suprised when I saw THE WORLD IS FLAT by Tom Friedman being sold at 150 Rs [approx 4$] i had a bought a copy of the same book for about 25$ at a upmarket book store.
I asked the road side book vendor what the hells going on...and he tell me..[Iam translating in english what he told me in Hindi] ... "Sir this is globalization. Just 4 days back someone scanned the whole book and put it on the web. A press in Charminar [another area in Hyderabad] printed the book - 1000s of copies and have distributed it all over South India"
The World is Flat :)
Posted by: Kartik Matmari | August 4, 2006 05:32 PM
Bijoy has quoted example of ITC eChoupal to counter Tharoor's point of view. I think we are exaggerating success of ITC echoupal these days.. Any body who wants to talk abt Intenet reaching rural hinerlands comes up with ITC example... which itself reveals the dilapidated state of Rural World...
Posted by: Anshuman Jaiswal | August 7, 2006 06:25 AM
@Anshuman
What I was really trying to explain was the pervasiveness of the medium, and the speed with which it can change lives. Like any tool, it has the power to cut both ways.
eChoupal may be an exaggerated, rather tired example. Truly, the Internet is yet to pervade the innermost reaches of emerging economies. However, as Friedman himself says in an interview about his book, the power of the flat world lies with the early adopters.
To quote Friedman: "The flat world is a friend of Infosys and of Al-Qaeda. It's a friend of IBM and of Islamic jihad. Because these networks go both ways. And one thing we know about the bad guys: They're early adopters. Criminals, terrorists – very early adopters. The person who understands supply chains almost as well as Sam Walton, is Osama Bin Laden. We have an issue there with the most frustrated and dangerous elements of the world using this flat planet in order to advance their goals, to recruit over the internet, to inspire over the internet, and to transfer orders and raise money over the internet. So they're using the flat world as much as anybody else.
Our job is to try to soak up those tools, so that we can use these collaborative tools in a more constructive way. But I have no doubt the flat world is a friend of both Infosys and Al-Qaeda."
You can read the entire interview here
Posted by: Bijoy Venugopal | August 7, 2006 07:49 AM