Sunday, November 14, 2010

World is Flat - Thomas Friedman

This had been on the list of "wish to read" for a while, finally I got a chance to lay hands on it. Its a very well written book explaining the globalization of the 21st century with a thought provoking idea; "The World is Flat" if not, tending towards being flat. I am glad to pick up the updated version of the book, and the times this book speaks of are the ones, I can relate to as the events happened while I was a part of this flattener.

I must say the books perspective can be related to the economy's of the developing countries along with the main cause of flattener "the entrepreneur attitude of people in US". Theres a clear difference in the entrepreneurship of North America and Asia. NAmerican entrepreneurship is about innovation, new products, innovative business models (supply chain, cost cutting, facilitation ) while the entrepreneurs in Asia contribute to the above by providing services/ opportunities to facilitate above.

One must note that the ideas and theories discussed in the work might not relate to all economies globally, but hold true in the major continents of the society. I wouldn't go over the 10 flatteners from the author as I don't understand all in detail and I might not doing justice to what the author meant. Secondly I am not knowledgeable enough to speak about economics and its a topic I recently started reading about. But I would like to discuss briefly the factors that do make sense to me and also gave me a new perspective which I being a part of never thought about.

  • The fall of communism (note: he talks about the communist practices of Russia at the time of Fall of Berlin Wall). This is time when PCs started catching up, allowing people to communicate and express all over the world.
  • Netscape, the biggest factor for flattener as it defined web for all who had access to a phone and a computer in contrast to "early adopters and geeks".
  • Offshoring: Idea of moving the manufacturing beyond borders to benefit from lower cost, which helped other economies to grow, and kept the commodity costs low.
  • Outsourcing, this not only helped people to be productive round the clock but also opened opportunities to people round the globe. The biggest innovation that helped was laying fiber optics across seas, facilitating the communication to be more efficient.
  • Insourcing: this is a very interesting factor and I was never aware of it. The example that author presents explains it well. UPS, a delivery company that takes cares of your packages. Since this company did study and invested in the supply chain of transportation to reduce the amount of time it takes to deliver a package, it got innovative enough to open the repair centers for companies like HP. Where HPÊ & Toshiba certified engineers repair your computer reducing the turn around time for defective pieces to minimum. Companies like UPS not only provide services to bigger organizations they also provide investment to smaller business and do consulting for them in lowering the operating costs based on their fully established system.
  • Open Source, Workflow softwares, Search Engines: I club these 3 together as I think of technology as one. Though I would still keep Netscape out of this category as that was a defining factor in the world of web. OpenSource society of geeks who love to contribute like Linux, apache, wikipedia, bloggers. This started a streak of innovation in the world making productivity softwares and new available to people for free. Workflow softwares like webex, smtp (mail protocols) ftp, http enabled people to communicate and work real time in collaboration regardless of geographical location, and ofcourse Yahoo and later Google which made any information available while on the move.

Other than this author explains how the .com boom and bust helped global economies grow. In a way the bust was a blessing in disguise for global economies in India. During this hard phase a lot of skilled workers in US had to go back home, which gave them an opportunity to start their own companies. Note all fiber optics was laid till then helping these new companies to make ties abroad. Not only this now Asok from IBM was in India and IBM had a reliable cheaper contact in a distant land and could help them in being productive. This though a factor of the start of business model for outsourcing turned out to be a blessing for India to step into IT.

The book is a good start for anyone who wants to understand or start on understanding the global economy. It has been written for a layman without throwing in heavy terminology from economics and helps perceiving things with examples from bigger established organizations. Its a work drawn out of a series of interviews of people working a different levels of organizations and then arranging it into place to explain what drives global economic.

Interesting work well written.