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(originally published by Booz & Company)


Best Business Books 2005: The Future

2. August 8, 1995, the day Netscape went public, igniting the dot-com boom and transforming the Internet into the World Wide Web, was significant for another reason. It helped lead to massive overinvestment in fiber-optic cable. When companies like Global Crossing sank, their stockholders suffered, but hundreds of thousands of highly educated knowledge workers in India and China suddenly had inexpensive broadband connectivity to the industrialized world.

3. The third flattener was the advent of “workflow,” which Mr. Friedman defines as “all the software applications, standards and electronic transmission pipes, like middleware, that connected all those computers and fiber-optic cable. To put it another way, if the Netscape moment connected people to people like never before, what the workflow revolution did was connect applications to applications so that people all over the world could work together in manipulating and shaping words, data and images on computers like never before.”

4. The effect of the first three flatteners was the creation of a platform for inexpensive worldwide collaboration among people, enterprises, and software, which in turn enabled the remaining six flatteners.

5. If moving your help desk to India is the flattener so many have come to know as outsourcing, then moving an entire factory to China is the next flattener — offshoring. And when China starts to benefit from the new ways of manufacturing that its cheap labor force has enabled, offshoring is likely to have its own global economic consequences as China begins to exert decisive influence over world markets.

6. Open sourcing is a mode of production, enabled by the collaboration platform of Internet-linked PCs, that has potential far beyond challenging Windows with the Linux operating system and Internet Explorer with the Firefox browser.

7. Insourcing is allowing a company like UPS to take over your entire logistics operation. When you ship your malfunctioning Toshiba laptop via UPS, it is delivered to the UPS hub, where UPS repairs it the next day, and then ships it back to you for arrival on the third day.

8. Supply-chaining is what fuels the Wal-Mart juggernaut, which uses the data-collaboration platform of PCs, the Internet, and barcodes to ensure that when an item leaves the shelf in a Wal-Mart in Florida, for example, it automatically triggers the manufacture of a replacement in China.

9. “Informing” is what Mr. Friedman calls the democratized access to personal knowledge that we take for granted today, but that would have been unthinkable a decade ago — the ability of hundreds of millions
of people around the world to use a search engine, free of charge, to find out nearly anything they need to know at any time.

10. Wireless access and voice communication over the Internet are what Mr. Friedman calls “the steroids” of the flatteners: “What the steroids do is turbocharge all these new forms of collaboration, so you can now do any one of them, from anywhere, with any device.”

Seeing the world through Mr. Friedman’s corner-office window won’t show you what will certainly happen to everyone in the future, but it might help you understand and react knowledgeably when Globalization 3.0 comes to your industry, hometown, or nation. Of particular interest in this regard is Mr. Friedman’s focus on the economic challenge that will be posed to the rest of the world by Chinese and Indian competitors in the future, and the failure of the U.S. education system to come anywhere near addressing the challenge. When weighing for bias while reading The World Is Flat, note how almost everyone Mr. Friedman quotes is a CEO, a secretary of state, or a prime minister. This is authoritative information about what the people who run the world are thinking, with insightful linkages between politics, economics, and technology. At the same time, Mr. Friedman’s authoritative sources also limit his world view: The world is flattening for the elites Mr. Friedman quotes, but he provides very few quotes from those more than one level below the CEO. You might miss something as big as the fall of Communism — as the CIA did — if the views from those penthouse windows are the only ones you see.

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