globalization 3.0

Globalization 3.0Globalization 3.0

Adapted from Thomas Friedman’s The World is Flat

Adapted from Thomas Friedman’s The World is Flat

"When we were young kids growing up in America , we were told to eat our vegetables at dinner and not leave

them. Mothers said, finish the dinner, think of the starving children in India

and China.' And now I tell my children: 'Finish your homework. There are

children in India and China starving for your jobs.”

"When we were young kids growing up in America , we were told to eat our vegetables at dinner and not leave

them. Mothers said, finish the dinner, think of the starving children in India

and China.' And now I tell my children: 'Finish your homework. There are

children in India and China starving for your jobs.”

Globalization 1.0Globalization 1.01492 to early 1800’s

World shrunk from “large to medium”

Through exploration, imperialism, and colonialism the focus was on countries and how they “flattened the world”

“I speak Spanish to my God, Italian to women, French to men, & German to my horse, & Japanese to my boss” – Paraphrasing King Charles the 5th of Spain

Globalization 2.0Globalization 2.0

1800 to 2000

World shrunk from “medium to small”

Focus was on multi-national companies “flattening” the world through market and economic means

“The IT revolution was just the start, it was only the sharpening of the tool for the real revolution.”

Globalization 3.0Globalization 3.0

2000 to ....

World shrunk from “small to tiny”

Focus on individuals and groups to collaborate and compete globally

“Chances are good that Bhavya in Bangalore will read your next x-ray, or, ‘Grandma Betty in her bathrobe’ will make your Jet Blue plane reservation from her Salt Lake City home. In ‘Globalization 3.0,’ Friedman contends, people from far-flung places will become principal players in the marketplace.”

10 Forces That Flattened the World & (leveled the playing field)10 Forces That Flattened the World & (leveled the playing field)

1. 11/9/892. 8/9/953. Work Flow Structure4. Open-Sourcing5. Outsourcing6. Offshoring7. Supply-chaining8. Insourcing9. In-forming10. The Steroids

1. 11/9/892. 8/9/953. Work Flow Structure4. Open-Sourcing5. Outsourcing6. Offshoring7. Supply-chaining8. Insourcing9. In-forming10. The Steroids

11/9/89When the Walls Came Down & the Windows Went

Up

11/9/89When the Walls Came Down & the Windows Went

Up

The Collapse of the Berlin Wall signaled a political, economic, and social change.

Led to standardization & commoditization of technologies & services due to global markets & global competition

Windows OS is released within 5 months

8/9/95When Netscape went Public

8/9/95When Netscape went Public

Symbolic start of the “dot com era” - unleashed “gold rush fever”

Netscape made the internet operable and accessible for all (not just MIT folks)

Accelerated transition from “connectivity” to “internetworking” to “interworking”

Coincided with Telecom Act of 1996 - the over investment in fiber optics laid the “foundation” for later flatteners

Work Flow StructureWeb Services, TCP/IP, XML

Work Flow StructureWeb Services, TCP/IP, XML

The ability of machines to talk to other machines with no humans involved.

Friedman believes these first three forces have become a "crude foundation of a whole new global platform for collaboration.”

Work flow patterns are enabling productivity boosts in service industry similar to what Ford did for manufacturing

Open SourcingLinux, Wikipedia, Blogs, YouTube, Facebook

etc.

Open SourcingLinux, Wikipedia, Blogs, YouTube, Facebook

etc.

Communities uploading and collaborating on online projects.

Friedman considers this phenomenon "the most disruptive force of all."

Open-source is essential for research visibility and impact

OutsourcingY2K to India and Beyond

OutsourcingY2K to India and Beyond

Y2K created software work overload on US companies, who outsourced to India

India was second buyer of US overcapacity in fiber optics

Dot-come bubble burst reduced revenue but not IT workload, so outsourcing became necessity

“Grandma Betty taking your Jet Blue reservations” ... “Bhavya in Bangalore will read your next x-ray”

OffshoringIf “outsourcing” is India, “offshoring” is China

OffshoringIf “outsourcing” is India, “offshoring” is China

The internal relocation of a company's manufacturing or other processes to a foreign land to take advantage of less costly operations there.

China's entrance in the WTO allowed for greater competition in the playing field.

Is a political issue, but also a economic reality: moving manufacturing to low-cost labor markets (Nike, Wal-Mart, Starbucks etc.)

Supply ChainingEating Sushi in Arkansas

Supply ChainingEating Sushi in Arkansas

The “Wal-Mart Symphony” - 24/7/365: delivery, sorting, packing, distribution, buying, manufacturing, reordering, delivery, sorting...

Friedman compares the modern retail supply chain to a river, and points to Wal-Mart as the best example of a company using technology to streamline item sales, distribution, and shipping.

The fewer natural resources your county or company has, the more you innovate to survive

InsourcingUPS Slogan: “Your World Synchronized”

InsourcingUPS Slogan: “Your World Synchronized”

Not just delivering packages but synching global supply chains for companies, and taking over operations for companies that use them to ship

UPS repairs Toshiba computers on behalf of Toshiba. The work is done at the UPS hub, by UPS employees. (i.e. Nike ID shoes...customized by UPS)

Insourcing lets small companies leverage global supply chains previously only available to large companies.

In-formingGoogle etc...

In-formingGoogle etc...

“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"

In-forming is the individual’s analog to outsourcing, insourcing, supply chaining, and offshoring

Others can also find out (too much?) about us: Facebook, Twitter, YouTube, Blogsphere etc.

The SteroidsDigital, Mobile, Personal and Virtual

The SteroidsDigital, Mobile, Personal and Virtual

Personal digital devices like mobile phones, iPods, personal digital assistants, instant messaging, and voice over Internet Protocol (VoIP).

These new technologies are considered “steroids” because they turbocharge other flatteneres (think iPhone Apps)

The Triple ConvergenceCovergence #1: Technology -Up until 2000 the ten flatteners were semi-independent of one another. Around the year 2000, all the flatteners converged with one another. This convergence could be compared to complementary goods, in that each flattener enhanced the other flatteners; the more one flattener developed, the more leveled the global playing field became.

Convergence #2: Business Process-After the emergence of the ten flatteners, a new business model was required to succeed.Instead of collaborating vertically (the top-down method of collaboration, where innovation comes from the top), businesses needed to begin collaborating horizontally. Horizontalization means companies and people collaborate with other departments or companies to add value creation or innovation.

Convergenece #3: Global Workforce-After the fall of the Berlin Wall, countries that had followed the Soviet economic model—including India, China, Russia, and the nations of Eastern Europe, Latin America, and Central Asia—began to open up their economies to the world. When these new players converged with the rest of the globalized marketplace, they added new brain power to the whole playing field and enhanced horizontal collaboration across the globe. In turn, Convergence III is the most important force shaping politics and economics in the early 21st century.

So What Does this mean to me...

So What Does this mean to me...

People who are well-educated in hard disciplines have and will have an edge

Globalization 3.0 (leveling the playing field) is happening whether you know it or like it

Not everyone benefits in a flat world, but everyone can benefit in a flat world

Don’t be naive!

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 lion or gazelle.

When the sun comes up, you better start running.