A Book Review of ‘The World is Flat’ by Thomas Friedman

Posted on January 31, 2012

By Babita Balan:

The World is flat according to three times Pulitzer Prize winner Thomas Friedman. The theory came into existence when he visited India, where he witnessed Indians with American names and accent communicating to Americans miles away. What he means is a level playing field that we have today. Where third world countries have access to resources which first world country like America does, it gives the opportunity to compete with each other on the same field. This was not thinkable a decade ago. Hence the world is flat today and not round. He justifies his theory beautifully

Apart from outsourcing and India, the book deals with various issues thereby making it a good read. A must read, if one avoids the chapters on outsourcing. Never the less it’s nice to know things from an American’s perspective.

According to Friedman, the Indians and Chinese are not racing them to the bottom. We are racing Americans to the top. We want high standard of living. We want brand names and not junk etc. The more we spend, the more diverse product markets are created and the more niches for specialization are created in America.

He further adds that American companies are passing on their knowledge base to India. Indians are using their earnings and insights to produce new low cost products which the poorer Indians can use to lift themselves from poverty to middle class where they can purchase American products.

Both China and India are developing from their focus on low cost production to low cost innovations of their own. For example, TATA’s newly launched Nano Car.

The worry that recession may cut down on many jobs that are being offered to Indians at present, is also addressed. Friedman says that the way to succeed for America is not by stopping railroad line from connecting us but by firing imagination, upgrading skills and adopting those practices, rules, policies and educational institutions that will enable America to claim healthy slice of the bigger and more complex pie.

In Globalization 1.0, ‘countries’ had to think globally to thrive, or at least survive. In Globalization 2.0, ‘companies’ had to think globally to thrive, or at least survive. In Globalization 3.0 ‘individuals’ have to think globally to thrive or at least survive. In a flat world, there are no American jobs. There are just jobs and will go to the best, smartest, most productive or cheapest worker wherever he or she resides. In a flat world, the key to thriving as an individual is figuring out how to make you untouchable.

Friedman defines; untouchables are people whose jobs cannot be outsourced, digitized or automated.

When the world is flat whatever can be done will be done. The only question is whether it will be done by you or to you. So if you have an idea, pursue it. Because someone else will have a similar idea and will pursue it faster than you will.

The Competition is between you and your imagination. When individuals can upload and globalize their ideas, products or services as individuals, then what they imagine matters more than ever.

And the big shall act small. One way that big companies learn to flourish in the flat world is how to act small by enabling their customers to act really big. For example Starbucks allowed its customers to customize their drinks to their specifications.

Thanks to internet and satellite TV, Al Qaeda has been able to build up its Muslim identity and solidarity. Muslims of one country can sympathize with other country. There has proliferation of informal mutual supply chains throughout the Arab Muslim world today. Small networks of people who move money, through hawalas, who recruit through alternative education system like madrasas and who communicate through the internet and other tools of the global information revolution. Through internet they can broadcast themselves to your computer. Internet has helped them secure publicity and raise funds.