Columbus Day Update, Oct 05 | The World is Flat, After All


Think you have the gist of globalization enough not to readmore about it? Think again. Every page of Thomas Friedman’s TheWorld is Flat offers fascinating details and brilliant conclusions about global leveling.Traversing the world, including India, Friedman outlines ten flatteners.

By now, everyone has spoken with one of the quarter-million Indians workingin Bangalore call centers servicing American consumers, but, as usual, thestory is the how and why. Most basic, of course, is the entrenchment of English,due to the British occupation. After independence, in 1951, Nehru establishedthe first Indian Institutes of Technology (IITs). Pakistan, by contrast, didnothing comparable, perhaps reflecting the difference in predominately HinduIndia’s more open culture that prized education from Muslim Pakistan’sclosed, fundamentalist one. Nehru’s socialist policies, however, sentthe most entrepreneurial IIT graduates running to capitalistic America. Notuntil 40 years later in 1991, after the 1989 fall of the Berlin Wall (Friedman’sfirst flattener: the world was now one) and the subsequent global disenchantmentwith controlled economies, would India deregulate. Opening the door to foreigninvestments and telecommunications was Manmohan Singh, then finance ministerand now, as a result, prime minister.

An early flirtation between Indian and American business was 1994’sHealthScribe India, funded by Indian-American doctors. American doctorswould use their touch-tone phones to call a number and dictate their notes.Their voices would be digitized and downloaded in Bangalore. Then, dueto the 12-hour time difference, the doctors’ notes were transcribedovernight and ready for the next American morning. Safe and cheap transcriptionof sensitive medical records in an American climate of malpractice causedother companies to consider India. Then came three flatteners: Netscapedeveloped the first universally available browser, work-flow software uniteddiverse computer programs, and intellectual open-sourcing, like Apache(pun on patches) and Wikipedia, took off.

Friedman explains that outsourcing heated up when the tedious,time-consuming computer corrections needed for Y2K (flattener #5)caused India and America to start dating. The tech bubble may haveburst in 2000 in America, but overinvestment in fiber-optic cablesallowed India to pick them up for pennies on the dollar. The dryingup of venture capital forced companies to be more efficient, includingcutting costs by outsourcing backroom work. Friedman makes thisvivid by describing his visit to an Indian call-center trainingclass where new employees were learning to speak flatter English,a.k.a. American.

Imitating India’s success with verbal and intellectual outsourcing,China ran with offshoring, manufacturing for other countries (flattener#6). Joining the World Trade Organization in 2001, China “signal[ed]the world it was capitalist for good.” China does have its Bangalore,but the call centers speak Japanese: Dalian, a northeastern port city wherea third learn Japanese as a second language. The seventh flattener, theWal-Mart supply chain system in which central distribution is suppliedby all its vendors, has accelerated China’s success. As in Bentonville,Arkansas, whatever is too large to be sorted by 24/7 conveyor belts isdistributed by pallet drivers following computerized instructions by headphones,leaving the drivers’ hands free. Despite NAFTA, China is now thesecond largest exporter to the U.S., replacing Mexico and catching up toCanada.

Upping the ante, UPS has become the globe’s supply-chain synchronizer(flattener #8). Companies like Toshiba now practice “insourcing”:setting up a repair station at UPS’s Louisville hub so their customers’ computerscan be picked up, repaired, and returned in three days. Taking the anteto cyberspace, Google, Yahoo, and MSN Web Search have flattened information(flattener #9)—anything available to anyone anytime. Each personnow becomes his or her own information conveyor belt. Wireless (flattener#10) makes information truly mobile and global.

How’s America faring in this global “sorting-out”? Friedmanlikens the U.S. to third-generation wealth—the hunger is gone. Scienceand technology jobs are still seen as geeky by the upper class. Ninety-ninepercent of CalTech students are from public high schools, while at Princeton,engineering is only the tenth most popular undergraduate major, and Chinesecompose over 60 percent of engineering graduate students. Friedman advisesreplacing the old parental adage to eat your dinner because children inIndia and China are starving, with study science because they’restarving for your jobs. Even so, he believes America will rise to the challengeof being increasingly creative, because of her political stability, “best-regulatedand most-efficient capital markets,” the highest “quality ofintellectual property protection,” the “most flexible laborlaws,” the most sophisticated research universities, the psychologyof openness, and the melting pot mentality.

Friedman asks and answers other globalization questions. Why hasn’tMexico become an India or a China? What countries remain unflat and why?How do worldwide “just-in-time” supply chains, like Dell, contributeto global conflict resolution? Read deeply, for the 21st century worldpromises to get even flatter.