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