The World Is Flat: A Brief History of the Twenty-First Century

“Everywhere you turn, hierarchies are being challenged from below or are transforming themselves from top-down structures into more horizontal and collaborative ones.” 

This is a key point in what Friedman calls Globalization 3.0 and the flattening of the world. Vertical structures and processes are no longer advantageous. Instead of controlling everything with a top-down structure, companies that find horizontal methods of adding value—such as outsourcing—are more nimble and efficient. Likewise, closer collaboration is necessary. Friedman uses the example of Walmart giving its suppliers access to its inventory system to track products that need to be replenished.

“Whenever civilization has gone through a major technological revolution, the world has changed in profound and unsettling ways. But there is something about the flattening of the world that is going to be qualitatively different from the great changes of previous eras: the speed and breadth with which it is taking hold. The introduction of printing happened over a period of decades and for a long time affected only a relatively small part of the planet. Same with the Industrial Revolution. This flattening process is happening at warp speed and directly or indirectly touching a lot more people on the planet at once. The faster and broader this transition to a new era, the greater the potential for disruption, as opposed to an orderly transfer of power from the old winners to the new winners.” 

Here Friedman emphasizes both the common and unique aspects of today’s world changes. Technological change has always been challenging and even difficult for people to adjust to. The current change, however, is happening faster and more comprehensively than any in the past. 

“Netscape was a huge flattening force for several reasons. To begin with, the Netscape browser not only brought the Internet alive but also made the Internet accessible to everyone from five-year-olds to ninety-five-year-olds. The more alive the Internet became, the more different people wanted to do different things on the Web, so the more they demanded computers, software, and telecommunications networks that could easily digitize words, music, data, and photos and transport them on the Internet to anyone else’s computer.” 

Friedman argues that the invention of Netscape’s browser represented a watershed moment in the creation of a flat world because the tool allowed everyone to easily access the Internet. This access fed upon itself, creating a demand for more and more tasks to be done online. 

“‘Work flow platforms are enabling us to do for the service industry what Henry Ford did for manufacturing,’ said Jerry Rao, the entrepreneur doing accounting work for Americans out of India. ‘We are taking apart each task, [standardizing it,] and sending it around to whoever can do it best, and because we are doing it in a virtual environment, people need not be physically adjacent to each other, and then we are reassembling all the pieces back together at headquarters [or some other remote site]. This is not a trivial revolution. This is a major one. It allows for a boss to be somewhere and his employees to be someplace else.’” 

Work flow platforms have created a momentous shift in how service work is done. It is now possible to digitize work, divide it up, and outsource it anywhere that it can be done better or more cheaply. 

“These are all variations of uploading. The genesis of the flat-world platform not only enabled more people to author more content, and to collaborate on that content. It also enabled them to upload files and globalize that content—individually or as part of self-forming communities—without going through any of the traditional hierarchical organizations or institutions.” 

As an aspect of a flat world, uploading creates a bottom-up flow of information. More and more people can now create content that is accessible to virtually everyone with an Internet connection, and they can do so without the top-down hierarchies that controlled information in the past. 

“As I will repeat in this book: There is no future in vanilla for most companies in a flat world. A lot of vanilla making in software and other areas is going to shift to open-source communities. For most companies, the commercial future belongs to those who know how to make the richest chocolate sauce, the sweetest, lightest whipped cream, and the juiciest cherries to sit on top, or how to put them all together into a sundae.” 

This is Friedman’s metaphor for the fact that companies will need to focus on adding value to basic products and services in order to thrive. A flat world means that anything “vanilla” can be produced anywhere, and it will likely be manufactured in areas with the cheapest labor. 

“To appreciate how important supply-chaining has become as a source of competitive advantage and profit in a flat world, think about this one fact: Wal-Mart today is the biggest retail company in the world, and it does not make a single thing. All it ‘makes’ is a hyperefficient supply chain.” 

Supply-chaining is one of the flatteners that Friedman lists in Chapter 2. The technique uses horizontal relationships to create value. Supply chains today must be nimble. This is why companies that rely on supply-chaining take advantage of technology to know the inventory of a product in real time. And, as the example shows, supply chains themselves are highly valuable.

“In-forming is the individual’s personal analog to uploading, outsourcing, insourcing, supply-chaining, and offshoring. In-forming is the ability to build and deploy your own personal supply chain—a supply chain of information, knowledge, and entertainment. In-forming is about self-collaboration—becoming your own self-directed and self-empowered researcher, editor, and selector of entertainment, without having to go to the library or the movie theater or through network television. In-forming is searching for knowledge. It is about seeking like-minded people and communities.”

In-forming highlights the power of individuals in a flat world. Using only a Web browser, people can accomplish all the tasks detailed above, by themselves and through communities formed entirely online. 

“It is this triple convergence—of new players, on a new playing field, developing new processes and habits for horizontal collaboration—that I believe is the most important force shaping global economics and politics in the early twenty-first century. Giving so many people access to all these tools of collaboration, along with the ability through search engines and the Web to access billions of pages of raw information, ensures that the next generation of innovations will come from all over Planet Flat. The scale of the global community that is soon going to be able to participate in all sorts of discovery and innovation is something the world has simply never seen before.” 

The 10 flatteners have been around for a number of years, but it took time for their real potential to manifest. Once they did, they began to strengthen and work in tandem with each other. Players began to adopt new methods of doing business, enabled by new technologies, and the Web connected players across the globe. This is the triple convergence, what really allowed Globalization 3.0 to take off. 

“From the telegraph to the Internet, every new communications technology has promised to shrink the distance between people, to increase access to information, and to bring us ever closer to the dream of a perfectly efficient, frictionless global market. And each time, the question for society arises with renewed urgency: To what extent should we stand aside, ‘get with the program,’ and do all we can to squeeze out yet more inefficiencies, and to what extent should we lean against the current for the sake of values that global markets can’t supply?” 

This quotation illustrates the tension created by great technological change, which creates phenomenal opportunity while retiring familiar, older tools. Sometimes these older tools have a value that cannot be reduced to monetary terms, which means we must strike a balance between adopting new technology and retaining former practices. 

“In other words, an Indian consulting firm won the contract to upgrade the unemployment department of the state of Indiana! You couldn’t make this up. Indiana was outsourcing the very department that would cushion the people of Indiana from the effects of outsourcing.” 

Friedman uses this example to illustrate the conundrums that can arise in a flat world. After an outcry, Indiana was forced to cancel its contract with India and hire local firms to complete it at a higher expense to taxpayers. It remains unclear who is the exploiter and who is the exploited in this story (241). On the one hand, in the end, the state protected Indiana workers’ jobs; on the other, the state cost the taxpayers money it could have saved them by allowing foreign workers to compete fairly for the jobs. 

“Some 150 years ago, 90 percent of Americans worked in agriculture and related fields, driving plows pulled by horses and harvesting crops by hand. Today, due to the industrialization of agriculture, we need less than 3 percent of the population to grow all our food and more. What if long ago the government had decided to protect and subsidize all those manual agricultural jobs and refused to embrace mechanized and eventually computerized agriculture?” 

Friedman is saying that change is inevitable. This example is his answer to those who criticize globalization, showing that you cannot protect jobs that are destined to become extinct due to change. 

“There will be plenty of good jobs out there in the flat world for people with the right knowledge, skills, ideas, and self-motivation to seize them. But there is no sugar-coating the new challenge: Every young American today would be wise to think of himself or herself as competing against every young Chinese, Indian, and Brazilian. 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.” 

Friedman emphasizes that Americans can no longer coast along assuming that they will be in the vanguard of the world economy. A flat world, combined with a larger worldwide workforce, means that young Americans will need to step up their game to ensure that they will be competitive in the new global market. 

“The first, and most important, ability you can develop in a flat world is the ability to ‘learn how to learn’—to constantly absorb, and teach yourself, new ways of doing old things or new ways of doing new things.” 

At his talks across the country, parents often ask Friedman what their children should study to maintain an edge in this new, flat world. While he notes elsewhere the importance of studying math, he also believes that the most important skill to hone is the ability to learn any subject from different perspectives. This kind of flexibility is essential in a flat world. 

“In China today, Bill Gates is Britney Spears. In America today, Britney Spears is Britney Spears—and that is our problem.” 

Friedman laments the emphasis American society puts on entertainment by noting that engineers are treated like rock stars in China. 

“Unfortunately, it has been too long since America had a leader ready and willing to call on our nation to do something hard—to give something up, not just to get something more, and to sacrifice for a great national cause in the future, rather than live for today. But maybe we also have the leaders we deserve—a perfect reflection of who we are and how we raise our own children.”

This is part of Friedman’s warning about America needing to step up its game in a flat world. He believes that America needs someone to challenge the country in the way that President Kennedy did when he pledged to put a man on the moon by the end of the 1960s. Long accustomed to being number one in the world, America needs to work harder and sacrifice more to maintain that position. 

“Rule #1: 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.” 

This is the first of Friedman’s nine rules for companies that want to thrive in and navigate a flat world. It represents both a threat and an opportunity. Essentially, it is a challenge to companies to compete with their own imaginations to discover what is possible. To stay ahead of your competitors, seek the limits of what can be done. Otherwise, someone else will. 

“Indeed, it is becoming clear that the flat-world platform, while it has the potential to homogenize cultures, also has, I would argue, an even greater potential to nourish diversity to a degree that the world has never seen before.” 

Here Friedman turns conventional wisdom on its head by noting that the same aspects of a flat world that threaten to homogenize cultures also have the potential to preserve them. This is due primarily to the fact that people can stay in their native countries and still have skilled jobs (rather than immigrate to Western countries). Uploading can also help to preserve cultures because it allows individuals to create content and distribute it to a wide audience online.

“The iron law of globalization is very simple: If you think it is all good or all bad, you don’t get it. Globalization has empowering and disempowering, homogenizing and particularizing, democratizing and authoritarian tendencies all built into it.” 

Friedman claims that globalization is not innately good or bad. It has the power to be both. What will ultimately determine the nature of its impact on society is how the tools of a flat world are used. 

“‘People from all over the world will draw knowledge and inspiration from the same technology platform, but different cultures will flourish on it. It is the same soil, but different trees will grow.’” 

This quotation by Gary Wang, the founder of a podcast and video-sharing website in China, speaks to the power of uploading via common technology platforms. It also reinforces Friedman’s point that aspects of a flat world can help to preserve cultures.

“Yes, technology can make the far feel very near. But it can also make the near feel very far.” 

By this, Friedman means that technology is not only shrinking and flattening the world, but also isolating us from people who are right in front of us. For example, someone with family around the globe can easily use technology to communicate with them, but electronic devices can also distract that person’s attention away from communicating with friends and family who are nearby. This is one of the warnings that Friedman gives about the downsides of technology. 

“This humiliation is the key. It has always been my view that terrorism is not spawned by the poverty of money. It is spawned by the poverty of dignity. Humiliation is the most underestimated force in international relations and in human relations. It is when people or nations are humiliated that they really lash out and engage in extreme violence.” 

The benefits of a flat world do not extend everywhere. Some regions remain in the “unflat world,” where a lack of access to the tools and/or benefits of a flat world can cause frustration. If this frustration leads to humiliation, as he claims it has in many Muslim countries, it can result in a backlash, like violence or terrorism.

“Al-Qaeda has learned to use many of the same instruments for global collaboration that Infosys uses, but instead of producing products and profits with them, it has produced mayhem and murder.” 

The tools of a flat world can be used for harm or for good. Friedman goes so far as to claim that Osama bin Laden created a supply chain of terror when planning the September 11 attacks.