The World is Flat is a best-selling book by author Thomas Friedman that looks at globalization in the 21st Century, and how advances in globalization contributed to a leveling, or flattening, of the playing field for individuals throughout the world in regards to creating businesses, personal employment, access to information, communication, collaboration, and more. Thomas Friedman is a foreign affairs journalist, and Pulitzer Prize winner, for the New York Times who has traveled the globe.
Friedman says we’re at a point called Globalization 3.0, which started around 2000. We’ve gone from the globalization of countries being the dynamic (1.0), changing force for the world, to companies globalizing (2.0), to now individuals and small groups globalizing (3.0). Thanks to changes in political landscapes and economic policies, and advances in technology that provide us with instant, affordable access to information and tools for communication and collaboration, we as individuals are now empowered more than ever before, providing a more level, FLAT playing field for more of us than ever before (hence the title).
Friedman came up with what he considered to be 10 flatteners that occurred over the last 20 years that really helped bring us to the point of the Globalization 3.0 era. Friedman said that these flatteners converged around the year 2000 and "created a flat world: a global, web-enabled platform for multiple forms of sharing knowledge and work, irrespective of time, distance, geography and increasingly, language.” So let’s look at those 10 Flatteners now.
The Fall of the Berlin Wall was not just a physical breaking down and fall of the walls that partly separated West Germany from Communist East Germany, but a metaphor for the fall of Communism as well, and a shift of power from the Communist Soviet Empire to the more democratic and capitalist-friendly economic policies of America and Western Europe. Shortly thereafter, countries like India began abandoning their socialist economic policies and opened their economy, and their people as a potential workforce, up to the world.
At the same time, the Windows PC computer rose to prominence, enabling people all over the world to create content in a digital format and making it far easier to edit and share (THINK BACK TO THE OLD TYPEWRITER DAYS). The sharing wasn’t easy at first, though, because we had to use floppy disk drives to share information. It wasn’t until the rise of the internet and the world wide web that things truly changed.
Netscape was the browser that brought the web to the masses when it went public in 1995. There were other browsers before, like Mosaic, which Netscape was actually built upon, but it was Netscape that caught like wildfire at just the right moment with users. It was easy to use, and allowed us access to web pages with information, pictures, audio, and video from all over the world. (DISCUSS MOSAIC AND NETSCAPE USE). Then, with Windows 95, Microsoft was able to stick its Internet Explorer browser on the desktop of every PC owner in the country, so Netscape’s reign was short-lived. But it was the first to really catch fire and excite imagination about the possibilities of this new World Wide Web, which brought us all that much closer together and allowed us to have information literally at our fingertips.
Friedman points out that before the diffusion of computers and the internet, work flow in an organization might consist of your sales department taking an order over the phone and filling it out on paper, then walking that paper over to the shipping department to fill the order, then someone from shipping walking over to billing with another paper form so that Billing could send the customer an invoice. Highly inefficient – it was easy for human errors to occur at any point in this process – and too time consuming. Once the internet and the web took hold, businesses started finding ways to use software to automate these processes for them, to connect their entire organization from within, as well as connect their organizations with other organizations.
Since Globalization 3.0 is about the empowering of individuals, Friedman discusses the example of Ebay and Paypal as workflow software that helped flatten the world. eBay provided everyday computer and internet users with the ability to hold public auctions, and their audience was anyone in the world with an eBay account and an internet connection. But without the ability to manage consumer payments over the internet, eBay’s chances of succeeding were small – until they decided to adopt PayPal as their Consumer-to-Consumer transaction system. Now, anyone could easily deposit money into a PayPal account from their bank account, and securely pay for items they bid for on ebay from anywhere in the world. Customers no longer needed to send checks or money orders in order to complete transactions on their auction bids. Think about some of the ways that work flow software has affected us all as students. Now, thanks to our Banner Information System, we can sign up for classes and access our grades, all online, as opposed to when I was a student, and everything was done by paper. We’ll learn more, later this semester, about how businesses are using information systems to better manage their operations and work with customers and other businesses in their supply chains.
Friedman then discusses the open source movement. Open source software is typically free software that can be used, modified, and redistributed by anyone in the world. The penguin here is the logo for Linux, which is a free open source operating system the global community of computer programmers, geeks, and hackers can add to, modify, and use in any way they want – contrast that with Microsoft Windows, which is a proprietary operating system that only Microsoft can edit, and for which they charge big bucks. (CITE THE RECENT MICROSOFT WINDOWS 7 COMMERCIALS).The Apache Web Server software was one of the most infamous early examples of the power of open source. A community of programmers designed a program that would allow you to host web pages on your computer. It was so successful, that businesses and educational institutions and web programmers throughout the world downloaded Apache and used it as the software for hosting their web pages on their web server. If Apache didn’t totally accomplish what the business or user wanted, they could simply build upon it and make it better, and then share what they did with the rest of the open source community.
Today, the open source software movement has blown up big time. Our course management system, Moodle, is open source – we pay a company to provide server support for us, but the software itself is free. We use Audacity for creating podcasts, and many higher ed institutions are now using Drupal as their content management system for allowing faculty, staff, and students to store their files in a location accessible from anywhere they have an internet connection. We have a collaborative encyclopedia built on open source software – Wikipedia, which is using the free open source Mediawiki program. The open source movement has been both a benefit to businesses who don’t want to have to develop systems from scratch – they can now work on existing open source applications and systems and go from there, AND it’s been a great benefit to the individual – the person who wants to make an existing application better or who doesn’t want to pay an arm and a leg for expensive software solutions, like Microsoft Office. (DEMONSTRATE UBUNTU IF TIME)
Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components which can be subcontracted and performed in the most efficient, cost-effective way. Friedman uses the example of how we’ve outsourced so much business to India. India already had the infrastructure in place – they had fiber optic cables providing cheap, fast internet access, and they had technical schools which were churning out a skilled workforce. Once India opened up its economic borders to other countries, companies quickly discovered that they had a highly skilled and trained, highly motivated workforce that was working for pennies on the dollar compared to workers in Europe and America. Companies still kept their most highly skilled work in-house, but for projects and services that did not require their mid and top-level people, such as digitizing books, or providing technical phone support, they sent that work abroad to companies all over the world that they could trust, and saved a ton of money in the process by paying, say, 10 workers what it would cost them 1 typical worker.
This idea leads into Friedman’s 6th Flattener, Offshoring, which is the internal relocation of a company's manufacturing to a foreign land to take advantage of less costly operations there. China's entrance in the WTO (World Trade Organization) allowed for greater competition in the playing field. Businesses then began contracting with manufacturing companies in countries like China for their manufacturing needs. Once again, they were able to pay a highly motivated workforce pennies on the dollar, saving lots of money in the process. Before I read Friedman’s book, I had my own sudden realization one day about how common a practice this has become (TALK ABOUT VIN’S PLAYROOM). The question many Americans have is, can we get these jobs back. During the recent presidential election, Obama was pressed about this, and said he’d do what he could, although at this point nothing’s been done, and I’m not sure it can. Why would a company that is paying 5 workers what it costs 1 American to do want to stop that doing that? If we put up regulations demanding that these jobs come back, my guess is that these american companies would just relocate outside our borders, which is good for no one. So what does this mean for american jobs, and what are the implications for how we educate our students and train our workforce? How does it change the nature of the jobs that we have available to us? Friedman has his own suggestions, but I won’t mention them right now, for this week’s case study discussion deals with precisely these issues.
Friedman’s next flattener discusses advancements in Supply-Chaining due to some of the previously mentioned advances in the internet and work flow software, and cites specifically how Wal-Mart created one of the most efficient supply chains going, contributing to it being the biggest retail company in the world. Walmart saved by buying directly from manufacturers, rather than dealing with middle-men, and kept its inventories low and easily manageable by learning more about its customers wants and needs (which we’ll discuss in more detail this semester when we get to customer relationship management systems). Walmart maintains central distribution centers from which they receive all of their goods, which they then truck to the actual stores themselves. This proved to be far less expensive than if they’d had manufacturers truck the items themselves to individual stores. In addition, using communication technologies, they are in constant communication with their drivers, and they have can them pick up excess product at one store location and drop it off at another store location before heading back to the central distribution center. In addition, they’re using Radio Frequency Identification Technology, or RFID, tags to monitor their merchandise. Once RFID technology becomes less expensive, you’re going to see it everywhere. Rather than use tedious, inefficient bar code scanning, RFID technology can tell you where all your products are at any given time. (DISCUSS EXAMPLES OF RFID TECHNOLOGY, and how we’ll be discussing it again later this semester).
Friedman uses UPS as a prime example for in-sourcing, in which the company's employees perform services – beyond shipping – for another company. For example, UPS repairs Toshiba computers on behalf of Toshiba. The work is done at the UPS hub, by UPS employees. This saves a ton of money and time. Let’s say here I am living in San Francisco, and my Toshiba laptop is broken. Rather than have UPS ship my Toshiba laptop to Toshiba’s headquarters overseas, which then means Toshiba has to ship it back as well, incurring more costs, UPS decided to handle Toshiba’s business for them right here in America – they have a service team that fixes the laptop for Toshiba, and then ships it back, drastically cutting down on shipping costs and time. Friedman also mentions as an example the collaboration with services like ebay. Say I sell you some rare coins on ebay. You get the PayPal invoice, which has your name and mailing address on it. At the same time, ebay offers me the option of printing out a UPS mailing label on my own printer with a UPS tracking code on it, which you get as well, so you can track the package on your own time using your computer over the internet.
With the explosion of the web, information was available from resources all over the world, but it wasn’t until the search engine that we had the ability to index these web pages and the information they contained so that we could find the most relevant information that we were looking for in seconds. Although search engines have been around for well over a decade, Google was the search engine to rule all search engines. It’s clean and simple and provides the best search results in no time fast.Friedman writes, "Never before in the history of the planet have so many people – on their own – had the ability to find so much information about so many things and about so many other people.” This is just another huge example of how technology and access to information and knowledge has further empowered individuals. Later this semester, we’ll discuss the privacy implications of all of this information being available to the world.
During the early days of personal computing, we were tethered to our computing devices. I would have a desktop computer at home and an analog phone, and if I wanted to call someone, I had to be at home, and if I wanted to do my computing, access the web, e-mail, etc., I had to be on my home computer. Wireless networking, cell phones, smart phones, laptops, instant messaging, texting, video-conferencing, and more – these are the technologies that gave personal computing a big steroid boost. Now I can communicate, collaborate, develop content, find information, view and listen to multimedia, and more, from anywhere at anytime. Not only does that further empower us as individuals, but it shrinks what’s known as the digital divide – the division between the technology haves and the technology have nots. People living in third world countries or in lower economic classes who cannot afford a personal computer now have the ability to communicate with anyone in the world, access information from anywhere in the world, and collaborate with people from anywhere in the world, all through a much less expensive cell phone device. These technologies, in conjunction with the other flatteners Friedman discusses, level the playing field considerably more.
Flatteners intro at res 1
Welcome to Managerial Marketing! <br />Teaching Team Intros<br />FLATTENERS<br />Course overview<br />What’s marketing, anyway?<br />
Your teaching team!<br />Nancy Van Leuven, Ph.D.<br />Vanessa Fry, M.B.A. <br />Danielle Newton, M.A. <br />
FLATTENERS -- A Concept by Thomas Friedman<br />Part of Communication and <br />Collaboration in a Flat World<br />Res 1 – Managerial Marketing Intro<br />
Globalization Flattening of playing field in creating business, access to info, etc.<br />
The Ten Flatteners<br />-- Converged around the year 2000-- A global, web-enabled platform -- Multiple forms of sharing knowledge / work, irrespective of time, distance, geography and language.<br />
Flattener #1 – Fall of the Berlin Wall (opened economies)<br />http://www.youtube.com/watch?v=snsdDb7KDkg&feature=channel<br />
At same time: Microsoft Windows(floppy disks Internet sharing)<br />
Flattener #2 – Netscape (web to the masses)<br />http://www.supportcave.com/images/netscape4.bmp<br />
Flattener #3 Workflow Software(Automation to connect entire org from within and without)<br />http://www.reach1to1.com/images/ExampleLogic.png<br />
Examples: eBay and PayPal(no checks or money orders to complete transactions)<br />
Flattener #4 – Open Sourcing(Free software used, modified, redistributed by anybody)<br />Linux<br />(anyone can add to and modify<br />vs.<br />Microsft Windows<br />(proprietary operating system)<br />http://www.youtube.com/watch?v=EG9uuGwFmvs<br />
Flattener #5 – Outsourcing<br />Splitting service and other activities into componetns for subcontracting.<br />Why India? <br />Open,<br />Infrastructure,<br />Motivated workforce<br />10 workers for 1<br />http://www.altergroup.com/blog/wp-content/uploads/2009/09/india-outsource.jpg<br />
Flattener #6 – OffshoringInternal relocation of manufacturing to foreign land, e.g. China’s entrance in WTO <br />http://www.oneinchpunch.net/wordpress/wp-content/uploads/2007/10/china-toy-manufacturing2.jpg<br />
Flattener #7 – Supply-Chaining<br />Elimination of middle-men, low inventories, more customer relationship management<br />
Flattener #8 – Insourcing(performing services for another company, e.g. UPS and Toshiba)<br />
Flattener #9 – Informing(Empowerment of individuals)<br />
Flattener #10 – The Steroids<br />Old days: Phone and computing only at home<br />Now: Communicate, collaborate, develop content, find info, view/listen to media, etc.<br />
What Next?<br />Global communication is less about persuasion and more about COMMUNITY;<br />Micro-blogging and blogging –<br />(The next big thing is already here.)<br />Which is why…(ever so subtle transition) marketing is important<br />