The World Is Flat
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Transcript of The World Is Flat
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Summary of “The World Is Flat” by Thomas L. Friedman Published with updates in Penguin Books, 2006
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Globalization
Globalization 1.0
Globalization 2.0
Globalization 3.0
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Globalization 1.0 started in 1492 when Columbus discovered America
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Globalization 1.0
End:1800
Player: Country
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Globalization 2.0
Start: 1800
Interrupted by World War I (1914-1918) Great Depression (1929) World War II (1940-1945)
End: 2000
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Globalization 2.0
First Half
Falling of Transportation
Cost Steam Engine Rail Road
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Globalization 2.0
Second Half
Falling of Telecommunication Cost Telegraph Telephone PC Fiber Optics www
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Player: Multinational Company
McDonalds World locations map
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Globalization 3.0
Start: 2000
Player: Individual
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Globalization
1.0 - Country
2.0 - Company
3.0 - Individual
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10 Forces ThatFlattened The World
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Flattener #1
“Fall of Berlin Wall”
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Flattener #1
1989
No more Communism
End of cold war
It allowed people from other side of the wall
to join the economic mainstream
Towards Single, Global Market
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Flattener #2
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Flattener #2
1995
PC
Internet
Communication
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Flattener #3
WORKFLOW SOFTWARE
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Flattener #3
Working together Different Hardware Different Location
Web technology
Effect from Flattener #2 Netscape
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Flattener #3
Causes 6 more Flatteners
#4 Uploading
#5 Outsourcing
#6 Offshoring
#7 Supply-chaining
#8 Insourcing
#9 In-forming
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UPLOADING
Flattener #4
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Flattener #4
Uploading
Power of Community (Connected Individuals)
Community-developed Softwares - Open Source Answers News & Commentary – Blogging Content - Wikipedia
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Global Competition Is Fierce. Few “Producers” or “Consumers” Appear to Care about the Point-of-
Origin of Products or Services.
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Flattener #5
OUTSOURCING Y2K
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Outsourcing
Split Service Manufacturing
And perform elsewhere, where Most efficient Cost-effective
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Flattener #5
Y2K
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Y2K
Outsource Accelerator
India
Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)
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Flattener #6
OFFSHORING
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Offshoring
Split Service Manufacturing
And perform elsewhere, where Most efficient Cost-effective
China
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Flattener #7
SUPPLY-CHAINING
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Supply-Chaining
WAL*MART
Manuf.
Manuf.
Manuf.
Customer
Customer
Customer
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Supply-Chaining
SALES DISTRIBUTION
SHIPPING
Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)Flattener #6 Offshoring (Manufacturer)
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Flattener #8
INSOURCING
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Example #1: UPS fixes laptops for companies to speed up service. 3 day turn-around, instead of week (s) for product repairs
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Example #2: Take orders from Nike.com, fill the order from a warehouse staffed and operated by UPS and ship with UPS.
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InsourcingUPS•Intimate collaboration•3rd-party managed logistics•“They” act as part of “Your” company
• Fixing Toshiba laptops• Managing delivery of Papa John’s Pizza supplies• Picking, inspecting, packing and delivering Nike shoes• Same for Jockey shorts• Working with Plow and Hearth furniture suppliers to
improve packaging and reduce breakage
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Flattener #9
IN-FORMING
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Informing
Information Finding Search Engine
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Flattener #10
THE STEROIDS
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The Steroids
Computing
Instant Messaging,
P2P
VoIP
Videoconference
Computer
Graphics
Processing
Storage
Data Transfer
Communication
Virtual Reality
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The Steroids
Computing
Instant
Messaging, P2P
VoIP
Videoconference
Computer
Graphics
WIRELESS
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Triple Convergence
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Convergence#1
CONVERGED FLATTENERS
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Convergence #1
Before 2000 - Semi-Independent
After 2000 - Converged with
another As Complementary Goods
E.g. Paper/Pencil
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Convergence#2
NEW BUSINESSPLATFORM
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#5 Outsourcing
#6 Offshoring
#8 Insourcing
#7 Supply
Chaining
#9 Informing
New Business Platform
1# Berlin Wall
PoliticsGeographicEconomics
Infrastructure
#2 Netscape
#3 Workflow
BusinessProcess #4
Uploading
#10 SteroidsAccelerator
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Convergence#3
EMERGING REGIONS
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How Companies Cope
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Rule #1
“When the world goes flat – and you are feeling flattened – reach
for a shovel and dig inside yourself. Don’t try to build
walls.”
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Rule #2
“And the small shall act big . . . One way small companies
flourish in the flat world is by learning to act really big. And
the key to being small and acting big is being quick to take
advantage of all the new tools for collaboration to reach farther, faster, wider, and
deeper.”
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Rule #3
“And the big shall act small . . . One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to
act really big.”
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Rule #4
“The best companies are the best collaborators. In the flat world, more
and more business will be done through collaborations within and
between companies for a very simple reason? The next layers of value
creation are becoming so complex that no single firm or department is
going to be able to master them alone.”
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Rule #5
“In a flat world, the best companies stay healthy by
getting regular chest X-rays and then selling the results to their
clients.”
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Rule #6
“The best companies outsource to win, not to shrink. They outsource to
innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists – not to save money by
firing more people.”
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Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest
lion or it will be killed.
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Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will
starve to death.
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It doesn’t matter whether you are a lionor a gazelle. When the sun comes up,
you better start running.
African proverb posted by the Chinese manager of an American-owned auto parts manufacturing plant inBeijing, after China joined the WTO.
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Thank you
Prepared by: Amitanshu Srivastava