Summary of “The World Is Flat” by Thomas L. Friedman Published with updates in Penguin Books, 2006

Globalization

Globalization 1.0

Globalization 2.0

Globalization 3.0

Globalization 1.0 started in 1492 when Columbus discovered America

Globalization 1.0

End:1800

Player: Country

Globalization 2.0

Start: 1800

Interrupted by World War I (1914-1918) Great Depression (1929) World War II (1940-1945)

End: 2000

Globalization 2.0

First Half

Falling of Transportation

Cost Steam Engine Rail Road

Globalization 2.0

Second Half

Falling of Telecommunication Cost Telegraph Telephone PC Fiber Optics www

Player: Multinational Company

McDonalds World locations map

Globalization 3.0

Start: 2000

Player: Individual

Globalization

1.0 - Country

2.0 - Company

3.0 - Individual

10 Forces ThatFlattened The World

Flattener #1

“Fall of Berlin Wall”

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

Flattener #2

Flattener #2

1995

PC

Internet

Communication

Flattener #3

WORKFLOW SOFTWARE

Flattener #3

Working together Different Hardware Different Location

Web technology

Effect from Flattener #2 Netscape

Flattener #3

Causes 6 more Flatteners

#4 Uploading

#5 Outsourcing

#6 Offshoring

#7 Supply-chaining

#8 Insourcing

#9 In-forming

UPLOADING

Flattener #4

Flattener #4

Uploading

Power of Community (Connected Individuals)

Community-developed Softwares - Open Source Answers News & Commentary – Blogging Content - Wikipedia

Global Competition Is Fierce. Few “Producers” or “Consumers” Appear to Care about the Point-of-

Origin of Products or Services.

Flattener #5

OUTSOURCING Y2K

Outsourcing

Split Service Manufacturing

And perform elsewhere, where Most efficient Cost-effective

Flattener #5

Y2K

Y2K

Outsource Accelerator

India

Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)

Flattener #6

OFFSHORING

Offshoring

Split Service Manufacturing

And perform elsewhere, where Most efficient Cost-effective

China

Flattener #7

SUPPLY-CHAINING

Supply-Chaining

WAL*MART

Manuf.

Manuf.

Manuf.

Customer

Customer

Customer

Supply-Chaining

SALES DISTRIBUTION

SHIPPING

Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)Flattener #6 Offshoring (Manufacturer)

Flattener #8

INSOURCING

Example #1: UPS fixes laptops for companies to speed up service. 3 day turn-around, instead of week (s) for product repairs

Example #2: Take orders from Nike.com, fill the order from a warehouse staffed and operated by UPS and ship with UPS.

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

Flattener #9

IN-FORMING

Informing

Information Finding Search Engine

Flattener #10

THE STEROIDS

The Steroids

Computing

Instant Messaging,

P2P

VoIP

Videoconference

Computer

Graphics

Processing

Storage

Data Transfer

Communication

Virtual Reality

The Steroids

Computing

Instant

Messaging, P2P

VoIP

Videoconference

Computer

Graphics

WIRELESS

Triple Convergence

Convergence#1

CONVERGED FLATTENERS

Convergence #1

Before 2000 - Semi-Independent

After 2000 - Converged with

another As Complementary Goods

E.g. Paper/Pencil

Convergence#2

NEW BUSINESSPLATFORM

#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

Convergence#3

EMERGING REGIONS

How Companies Cope

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.”

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.”

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.”

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.”

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.”

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.”

Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest

lion or it will be killed.

Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will

starve to death.

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.

Thank you

Prepared by: Amitanshu Srivastava