Note by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
These brief comments represent my notes on two MIT videos that I recommend to everyone (MIT Link to 1st video 2005) and (MIT Link to 2nd video 2007). The videos are about Friedman's book that helps explain what's going on in the world. A couple of comments in the video emphasize the point. While we were sleeping, the world became flat and we were not ready. As a result of this flattening, there is no such thing as an American job anymore.
In the MIT video Friedman talks about the first three chapters of the book. In the first chapter he describes how he developed the idea for the book. From the realization that the global economic playing field is being flattened came the title "The World is Flat". Friedman tells the audience that there have been three stages or eras of globalization including the following:
1. The first era involved countries globalizing from around 1400 to 1800.
2. In the second era companies or multinationals were globalizing from 1800 to 2000.
3. The third era is when the world became flat as individuals and small groups from all nationalities began globalizing themselves after 2000.
While we were sleeping, the world changed dramatically when the third era of globalization began. The world flattened in all kinds of ways. Some of these ways are mentioned in the video, e.g., what's going on in China and India.
In the second chapter, Friedman describes how the world became flat. According to Tom this phenomenon came about because of ten flatteners as follows:
1. The fall of the Berlin wall in 1989 was the beginning along with the introduction of Microsoft Windows.
2. Netscape's web browser brought the internet to life in 1995 by bringing the web to average folks, not just technical types.
3. The dot com boom and investment in a "glut of fiber optic cable" made it possible for everyone to communicate for free.
4. Workflow - Software applications were developed that allowed connecting workflow which created multiple forms of collaboration.
5. Outsourcing - a new form of collaboration was created.
6. Off shoring - another form of collaboration.
7. Open sourcing - more collaboration, e.g., Firefox was developed by two people who never met.
8. Supply chaining - Walmart's system provides an example.
9. Insourcing - the UPS/Papa Johns connection provides an example.
10. Steroids - File sharing and ..
In chapter 3 Friedman describes how all ten flatteners converged to create a tipping point or platform. (See The Tipping Point summary).
After some additional comments about chapter 3, Friedman answers some interesting questions like What is the effect of this flattening phenomenon on third world countries?
For a critical view of Friedman's book see the following:
Aronica, R. and M. Ramdoo. 2006. The World Is Flat?: A Critical Analysis of New York Times Bestseller by Thomas Friedman. Meghan Kiffer Press.
The day after I put my notes about Friedman's book on the web I got the following e-mail message from Scottie Jacob of Meghan-Kiffer Press.
Just off press ... The World is Flat?
“Globalization is Threatening to Hollow Out America’s Middle Class,” Assert Business Analysts
Thomas Friedman’s recent New York Times bestseller, The World is Flat, asserts that the international economic playing field is now more level than it has ever been. As popular as it may be, some reviewers assert that by what it leaves out, Friedman’s book is dangerous.
“The world isn’t flat as a result of globalization,” say Ronald Aronica and Mtetwa Ramdoo, business analysts and authors of a critical analysis of Friedman’s book. “It’s tilted in favor of unfettered global corporations that exploit cheap labor in China, Indian and beyond. Today’s global corporations go to the ends of the earth to employ factory workers for 20 cents an hour and PhDs in science and technology for $20,000 a year,” add Aronica and Ramdoo. In short, “Globalization is the greatest reorganization of the world since the Industrial Revolution,” says Aronica.
This epic change has shaken up the way the world does business, and Americans are reluctantly facing a shift of wealth and power to the East. Across the country, a growing number of Americans fear that they could be replaced by someone from a developing country. Recent polls indicate that millions of Americans are preoccupied with the outsourcing of American jobs and the threat of global economic competition. From boardrooms to classrooms to kitchen tables and water coolers, globalization has become a hot topic of discussion and debate everywhere. But by what Friedman’s book ignores or glosses over, it misinforms the American people and policy makers.
Aronica and Ramdoo’s concise monograph, The World is Flat?: A Critical Analysis of Thomas L. Friedman’s New York Times Bestseller, brings clarity to many of Friedman’s stories and explores nine key issues Friedman largely disregards or treats too lightly, including the hollowing out of America’s debt-ridden middle class. To create a fair and balanced exploration of globalization, the authors cite the work of experts that Friedman fails to incorporate, including Nobel laureate and former Chief Economist at the World Bank, Dr. Joseph Stiglitz.
Refreshingly, readers can now gain new insights into globalization without weeding through Friedman’s almost 600 pages of grandiloquent prose and bafflegab. “It’s of utmost urgency that we all learn about and prepare for total global competition. If you read Friedman’s book, and were awed, you really should read more rigorous treatments of this vital subject. Globalization affects all our lives and will be of even greater significance to our children and grandchildren,” says Ramdoo.
Aronica and Ramdoo conclude by listing over twenty action items that point the way forward for America and other developed countries. They provide a comprehensive, yet concise, framework for understanding the critical issues of globalization. They paint a clear and sometimes alarming picture of the early twenty-first century landscape, and present timely information needed by governments, businesses, and individuals everywhere.
Buchanan, M. 2002. Wealth happens. Harvard Business Review (April): 49-54. (Buchanan describes a universal law of wealth based on a network effect that appears to have some important implications for economic policy). (Note).
Esquire. 2015. America: These are your choices. Esquire (December/January): 149-153, 160-161, 164, 168. (Summary - This is a summary of ten questions related to the most critical choices for America based on information from the Brookings Institution).
Hayes, R. H. and W. J. Abernathy. 2007. Managing our way to economic decline. Harvard Business Review (July-August): 138-149. (This is a reprint of their 1980 article with a retrospect by Hayes on page 141). (Summary).
Martin, J. R. Not dated. ASCE report cards for America's infrastructure. Management And Accounting Web. http://maaw.info/ASCE2001Infrastructure.htm
Martin, J. R. Not dated. World Competitiveness Reports. Management And Accounting Web. http://maaw.info/WorldCompetitivenessReports.htm
Piketty, T. 2014. Capital in the Twenty-First Century. Belknap Press. (Note and Some Reviews).