Wednesday, June 22, 2005

Non-fiction - "The World is Flat" (part I)

"The World is Flat" is a new book by Thomas Friedman on the current globalization trends and how they will affect everyone. The subtitle of the book is "A Brief History of the Twenty First Century", although the history covered is really the second part of the 20th century.

The "flat" in the title was inspired by a comment made to the author by a CEO of an Indian company. He said the world's playing field is being leveled, by the technologies of computers and communications, so that people in India are now able to compete in the global markets. It is this "leveling" that leads to a "flat world".

In the first part of the book, Friedman, examines the ten "forces that flattened the world". Here is a short description of each of these:

  1. 11/9/89 - the Fall of the Berlin wall.

  2. This event opened up eastern Europe and country formerly known as Soviet Union, to greater participation in the world's capitalistic system. There was quite a lot of energy bottled up behind the Iron Curtain.

    Together with the fall of the Berlin Wall, Friendman sees the rise of the ubiquitous computing platform of cheap PCs and Windows O/S. Now everyone, even people from Eastern Europe, can afford and use PCs and Windows.

  3. 8/9/95 - the day Netscape went public

  4. Essentially, the rise of the Internet is the second flattener. The power of the PC is mutliplied many-fold once you attach it to a global network. I couldn't agree more.

    An unforseen effect the Internet bubble, was that networking infrastructure was put in place by companies like Global Crossing, and was cheaply sold off once the bubble burst. So, although the original investment to build these networks was lost (who were the investors?), the excess bandwith became available to everyone around the world, at much reduced price.

  5. Workflow software

  6. That is software packages that allow people to better organize work. From something as simple as MS Outlook that helps coordinate meetings, to custom software for managing workflow inside of a company, or with company external suppliers.

    I found that in this section he gives bit too much credit to "web services" - describing it as the technology that runs web workflows. I don't think that's quite correct. Seems he has been talking too much to marketers.

  7. Open Source software

  8. Here I again agree with Friedman, that open source software is an important "world flattener". However, when talking about OSS he concentrates on the low cost, but completely missed the "free as in freedom" part. He talks a bit about the rise of the Apache server, as the premier web server and how it is available to everyone at no cost.

    But I think the large point is that most open source software comes with the source. Which means that the knowledge used to create it is spread around the world. This means some smart kid in sub-Saharan Africa could build the next killer-app, beause he can learn how computers really work.

    Friedman talks a little about the GPL license, but confuses the "free as in beer" with "free as in freedom" implications. Cheap software is one thing, but I think that Free software (as defined by Richard Stallman) will have impact on the world.

  9. Outsourcing

  10. Here he talks about classical outsourcing of programming work to India. The first batch of this occured shortly before Y2K. There were a lot of Indian programmers willing to fix old COBOL programs. That's how the outsourcing work began.

    The rise of the Internet just made this much easier, as communications between India and the rest of the world improved.

    It's kind of funny to notice that Friedman completely misunderstood what the Y2K problem was. He thought that "computer clocks" had to be fixed. Someone should have explained this to him.

  11. Offshoring

  12. To Friedman, this is different from outsourcing. China's entry into the WTO on December 11, 2001, opened the door for moving more and more manufacturing plans to China, where availability of cheap labor made the move very lucrative.

  13. Supply-Chaining

  14. This chapter talks about the efficient supply-chains created by the new technology. The main example here is Wal-Mart. According to Friedman, large part of why Wal-Mart can keep it's prices so low is the very sophisticated supply-chain software, that allows it to manage it's mechandise very effectively. By reducing the cost of supplying the stores by few percent, Wal-Mart can undercut most competition.

    Not everyone agrees with this assesment of Wal-Mart, but from the description given in the book Wal-Mart's supply system is pretty impressive.

  15. Insourcing

  16. The idea of "insourcing" is to have a company absorb a task, in order to better serve it's customers. The main example for here is UPS. Did you know when you ship a Toshiba laptop to be fixed, UPS picks it up, fixes it and the gives it back to you.

  17. In-forming

  18. This funny term is used to describe the ability provided to all by Google, Yahoo and other search engines. All of a sudden, we can find things that in the past required access to vast libraries and/or expensive research assistants. My favorite example here was of people entering the
    ingredients they have in their refrigerator into Google to see what recepies would come up.

  19. The Steroids - digital, mobile, personal and virtual

  20. Here Friedman talks a bit about how digital and wireless technology pulls all this together. I found this section somewhat weak. The author's credibility was diminished when he started quoting Carly Fiorina (former CEO of Hewlett-Packard).

This first part of the book is certainly thought provoking, especially for people working with these technologies. However, one problem I found is that the author seems to have gotten his material from marketing brochures and CEOs who have something to sell. Parts of of story read like a Gardner Group Report (this is not a complement).

The following parts of "The World is Flat" discuss the implications of all this. I will write more on this in a follow up entry.


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