Transcript The World is Flat

The World is Flat
A compilation for a book review
presentation done by:
Saurabh Dixit
www.saurabhdixit.com
December 2008
The World is Flat
A Brief History of the
Twenty-First Century
By Thomas L Friedman
Friedman has won the Pulitzer Prize
three times for his work at the New
York Times, where he serves as the
foreign affairs columnist. He is the
author of three best selling books.
He lives in Bethesda, Maryland.
2005
Thomas Friedman
“While visiting in
Bangalore, India
someone commented
that the playing field is
being flattened . . . My
God, he’s telling me
that world is flat!. . .
The global competitive
playing field was being
leveled. The world was
being flattened.”
Playing Golf
No one gave me directions like this before:
Aim at either Microsoft or IBM
I was standing on the first tee at the KGA
Golf club in downtown Bangalore. The
Goldman Sachs building wasn’t done yet and
HP and Texas Instruments had their offices
on back nine. That wasn’t all – the tee
markers were from EPSON, a caddy was
wearing a 3M hat and outside the Pizza hut
billboard showed a headline ”Gigabites of
Taste”
The world is flat
Nilakani said:
“Tom the playing field is being
leveled.There was a massive investment
in technology, broadband connectivity
around the world, coupled with the PCs
becoming cheap, there was an
explosion of software, e-mail, search
engines like Google
The world is flat
We then had software that can chop up any
piece of work and send one part to Boston,
one to Bangalore, one to Beijing making it
easy for anyone to do remote development.
2000 all these came togather creating a
platform where intellectual work, intellectual
capital, could be delivered from anywhere.
Tom and Nilekani were sitting in the Massive
conference room of Infosis in Banglore.
The world is flat
Flattening of the world means that we
are now connecting all the knowledge
centers of the world together into a
single global network, which if politics
and terrorism do not get in the way –
could usher in an amazing era of
prosperity and innovation.
The Three Eras of Globalization
1492 – 1820 Globalization 1.0
World shrank from Size large to size medium
Exploration and colonization drive success
Countries think globally to thrive
1820 – 2000 Globalization 2.0
World shrank from size medium to size small.
Collaboration between international companies
Companies must think globally to survive
First half falling transportation cost and second
half falling telecom costs.
2000 – Present Globalization 3.0
World shrank from size small to size tiny.
Individuals and small groups globalize
Driven by diverse group of all nationalities
Everyday Examples
Jet Blue Reservation System
Retirees and housewives take airplane reservations
from their homes
McDonald’s Call Center
Drive-thru customers across the country give their
order to a worker in Colorado Springs
Indian Technicians and Engineers
Read X-rays, write software, provide administrative
support to US companies from Bangalore
Chinese Workers and Technicians
Japanese speaking Chinese workers provide backroom
support to American and Japanese companies
The Ten Forces That
flattened
The World
The 10 World Flatteners
1 11/9/1989: Berlin Wall came down
Worldwide balance of power shifted to free markets
Each outbreak of freedom stimulated another outbreak
2 8/9/1995: Netscape IPO
Sparked the dot com boom and over-investment in fiber optic
cable (connected the world)
Dot com bust made cost of using fiber optic cable virtually free
First commercial browser, invigorated internet use
3 Workflow Software Developed
Software and standards developed that allow people to work
together
Created a global platform that enabled collaboration
The 10 World Flatteners
4 Open-Sourcing
Self-organizing collaborative communities
Free code written by individuals and shared openly
Peer review provides rewarding gratification
5 Out-Sourcing
Any service, call center, business support operation, or knowledge work
that can be digitized can be sourced globally
Opportunity to seek cheapest, smartest, most efficient providers
Invigorated by Y2K computer date crisis (India)
6 Off-Shoring
Companies move entire factory or operation offshore to foreign country
Same product produces in same way with cheaper labor, lower taxes, etc.
Invigorated by China joining the World Trade Organization (Dec 2001)Zx
The 10 World Flatteners
7 Supply-Chaining
Wal-Mart pioneered global supply chain efficiency
Wal-Mart trucks deliver products to stores, pick up goods
from manufacturer on return to distribution center
An item is purchased in Wichita, KS and another one is
instantly produced in Beijing
Prediction of hurricane causes specialized products to be
shipped to affected stores (Pop Tarts, toys, beer)
8 In-Sourcing
Logistics giants take control of customer supply chains
UPS provides internal logistics support for other companies
Toshiba laptops sent directly to UPS where a UPS employee
repairs it and return ships to customer
The World is Flat
Flatteners #7 & #8
Thomas Friedman
Flattener #7 – Supply Chaining
Wal-Mart Prophet?
Flattener Key Points
Resourcefulness versus opportunity
Businesses in Difficult situations or insecure in the marketplace will
innovate and educate the industry
Small efficiencies via technology
Enhanced communication, leads to identification of more instances to
cut costs
Smart products and meta data
Microchip
Smart products
RFID tags
Streamline their supply chain
What are the implications for the US economy and
position in the world?
Adoption is a necessity
Resistance is futile. A place in the business world is solidified by adoption
and innovation.
Catch-22, Hegemony, Tiny gains
Demand models, anticipation techniques and trend analysis makes meta
data key in highly competitive markets
Wal-Mart Profit.
Flattener #8: UPS: In-Sourcing
Point 1 - UPS is not only shipping parcels, but also
providing smart business solutions
Example #1:
UPS fixes laptops for companies to speed up service.
3
day turn-around, instead of week (s) for product repairs
Example #2: Take orders from Nike.com, fill the order from a
warehouse staffed and operated by UPS and ship with UPS.
Point 2
UPS makes big companies act small +
small companies act big
If you are a seller on EBay, the buyer pays
through PayPal, you print UPS label
through PayPal and tracking number is
emailed to the customer so they can
track online and know when it’s being
delivered
Point 3
UPS is creating enabling platforms for
anyone to take their business global.
Provides funds for small businesses for
computers, scales, printers to help grow
your business
Provides banking solutions for
businesses
Point 4
UPS makes delivery super efficient & super fast,
and does this in high volumes.
Figured out a way to track packages more
efficiently. Allow customers to track their own
packages online.
Coding system to track packages - saves money
and speeds up delivery delivery.
Lowered price from $2+ to 5 cents
Point 5
UPS is now basically an extension of departments
within other companies
UPS tracks weather and geopolitical disturbances to
make sure they’re prepared for that days business.
2% of global GDP is being transferred through UPS at
any given moment.
Largest user of wireless technology in the world. Cell
Phones/DIADs (Driver Delivery Information Acquisition
Devices)
UPS Companies UPS Air Cargo UPS Capital Corporation UPS
Consulting UPS Mail Innovations Mail Boxes Etc., Inc. Motor Cargo, A UPS
Company Overnite, A UPS Company UPS Professional Services UPS Supply Chain
Solutions
And Flattening Capabilities…..
The 10 World Flatteners
9
Informing
Search engines (Google, Yahoo!, etc)
provide universal access to information
Individuals empowered to find information
10 Steroids
Wireless, VoIP, file sharing that enhance
the collaboration tools
Digital, mobile, virtual and personal
technologies explode
The Triple Convergence
Vertical (command and control) value-creation model
All 10 flatteners converged in 2000
and worked together to create the flat world
Horizontalization – Emergence of management
practicesand infrastructure to boost productivity
India, China, and former Soviet Empire
are joining the Flat world (300 million people)
Horizontal (connect and collaborate) value-creation model
The Quiet Crisis
Friedman argues that the US is in a “quiet crisis”
caused by 3 issues
The Numbers Gap
• US is no longer producing adequate number of educated workers
and engineers
• India and China overshadow US demographically
The Ambition Gap
• Americans believe they are “entitled” to certain jobs
• Some companies believe productivity higher in other countries
The Education Gap
• US education system is not preparing young people for new types
of work
• Funding levels for education are inadequate
Impact on Jobs
Three types of jobs in current market
Fungible Jobs
• Repetitive and skill-based work
• Easily digitized and not tied to a particular location
• Easily outsourced
Anchored Jobs
• Must be performed in a particular location
Value-add Jobs
• Require specialized skills and knowledge
• Knowledge must be across a number of disciplines and deep
The individual worker is responsible for managing
his or her own career, risks, and economic security
Becoming an “Untouchable”
Four types of workers in current market
Special Workers
• Special people like sports stars, movie actors, etc.
Specialized Workers
• Work cannot be outsourced
• Skills in high demand and not fungible
Anchored Workers
• Tied to a specific location
Really Adaptable Workers
• Constantly acquire new skills, knowledge, expertise
• Look for unique and creative components of job
Untouchables are people whose jobs cannot be
outsourced, digitized, or automated
Help Wanted Ads in a Flat World
Great Collaborators and Orchestrators
Collaborating within and between companies
Managers who can work in 24/7 supply chains
Great Synthesizers
Putting disparate and unusual things together
Example: Search engines require mathematicians and
marketing experts
Great Explainers
Ability to explain complex concepts with simplicity
Great Leveragers
Optimizing the interface between people and machines
Help Wanted Ads in a Flat World
The Great Adapters
Employees must be adaptable and versatile
• Specialists have deep skills and narrow scope
• Generalists have shallow skills and broad scope
• Versatilists apply depth of skill to widening scope through
constant learning and growing
The Green People
Industry of creating renewable energies and environmentally
sustainable systems will grow
Three-billion people in China, India, and former Soviet
Empire are joining the flat-world – will create more demand
for energy and products
The Great Localizers
Local businesses will still drive majority of jobs
Successful people will understand global infrastructure and
adapt to local needs and demands
Taking Advantage of a Flat World
Utilize information resources
AIAA Electronic Library, other internet sources
Utilize international network
Colleagues at Universities, industry partners
International members at AIAA conferences
Look for opportunities to learn from and collaborate with others
Become Really Adaptable
Never stop learning
• Participate in continuing education events
• Conduct research, write a paper for AIAA Journal or Conference
Build a global network
• Participate in AIAA conferences, section meetings, etc.
• Become a member on an AIAA Technical Committee
• Find a mentor
Take control of your own career
A Flat World – Implications
for Education
The Quiet Crisis
40% of the 18,146 NASA employees are
age 50 or older
NASA employees over 60 out number those
under 30 by a ratio of 3:1
The National Commission on Mathematics
and Science Teaching for the Twenty-first
Century found that 2/3’s of the nation’s
mathematics and Science teaching force will
retire by 2010
“When they send jobs abroad, they not only
save 75% on wages, they get a 100%
increase in productivity.”
“Young Chinese, Indians, and Poles are not
racing us to the bottom. They are racing us
to the top.”
“In China today, Bill Gates is Britney Spears.
In America today, Britney Spears is Britney
Spears – and that is our problem.”
The Annual worldwide Intel International
Science and Engineering Fair
Forty countries participated
In 2004 – 65,000 American kids
participated
In China – 6,000,000 Chinese kids
participated
Federal Funding
. . .for research in physical and
mathematical sciences and engineering as
a share of the GDP declined by 37%
between 1970 and 2004.
. . .National Science Foundation funding for
2005 cut
Where to Learn More
“The World is Flat – A Brief History of the
Twenty-First Century” by Thomas L.
Friedman, 2005.
MIT Lecture by Thomas Friedman, May 16,
2005, available at the MIT Open Course
website
“The Untouchables: Finding the New
Middle” by Thomas Friedman, available at
www.thesmarttechie.com