“When I was growing up in Minneapolis, my parents always said, “Tom, finish your dinner. There are

people starving in China and India.” Today I tell my girls, “Finish your homework, because people in

China and India are starving for your jobs.” And in a flat world, they can have them, because there’s no

such thing as an American job anymore.”

“Thomas L. Friedman”

“The World is Flat”--Book Review--

PresentersPresenters

Mariam HussainMariam HussainSara HasanSara Hasan

(MBA)(MBA)

Globalization - a whole new level

Era 1.0 (1492-1800)

Era 2.0 (1800-2000)

Era 3.0 (2000 onwards)

Size large to Size medium

Size mediumto

Size small

Size smallto

Size tiny

Country powerKnitting the world

Global MNC’s Hardware breakthroughs

Empowering individualsSoftware breakthroughs

Shrinking Monitor Driving Forces

Flattening Forces – Flattener #1

11/9/89 - “When the walls came down and the Windows went up”

The fall of the Berlin Wall is a symbol for a general global shift towards democratic governments and free-market economies.

Capitalism was dominant and annual rate of India’s growth soared from 3% per year to 7%.

6 months after the fall of the Berlin Wall, in May 1990, Microsoft shipped its breakthrough operating system, Windows 3.0

“The diffusion of personal computers, fax machines, Windows, and dial-up modems connected to a global telephone network all came together in the late 1980s and early 1990s to create the basic platform that started the global information revolution,”

Craig J. Mundie, CTO Microsoft.

Flattening Forces – Flattener #1

"Me and my machine can now talk to a

few friends and some other people

in my company better and faster, so we

can become more productive.“

Bin Laden’s Discordant Side

Flattening Forces – Flattener #2

8/9/95 - “When the web went around and Netscape went Public”

In the early 1990s, a scientist at CERN named Tim Berners-Lee created the programming language for writing web pages (called HTML) that allowed authors to do things like make “links” from one page to another and to store and share images. Thus, WWW was born.

Release of the first Netscape web browser in December 1994.

Everyone, no matter what computer they were using, could see the same web pages, access the same data.

Standards emerged for email, file transfer (FTP), and secure data transmission (SSL).

On 8/9/95, Netscape “went public” – they began selling stock on the open market… impact? – lower connectivity costs after bubble burst.

Flattening Forces – Flattener #2

The first Cisco Internet router, in fact, was built by a

husband and wife at Stanford who wanted to

exchange e-mail; one was working off a mainframe

and the other on a PC, and they couldn't connect

… me and my computer interacting with anyone anywhere

on any machine, …me and my computer interacting

with anybody's Web site on the Internet…

Flattening Forces – Flattener #3

Work Flow Software

Software that enables workers in different locations to collaborate efficiently.

Higglytown Heroes Example: The writers work from home: Florida, London, New York, Chicago, etc. Visual design and direction is done by a team in San Francisco. Voice recording takes place in LA or New York. Computer animation is handled by programmers in Bangalore, India. Work flow software enables all of them to access and manipulate everyone else’s contributions as they are made.

“Standards don’t eliminate innovation, they just allow you to focus it. They allow you to focus on where the real value lies, which is usually everything you can add above and around the standard.”

Joel Cawley, head of IBM’s strategic planning unit

Flattening Forces – Flattener #3

"Work flow platforms are enabling us to do for the

service industry what Henry Ford

did for manufacturing," said Jerry Rao, the

entrepreneur doing accounting work for

Americans from India.

--Paypal--

--MS Word--

Flattening Forces – Flattener #4

Open-sourcing - “Self-organizing collaborative communities”

People can be creators of new information as well as consumers. Instead of people just downloading music or news, they are increasingly likely to contribute information: writing a review of a product they bought on www.Amazon.com, rating their professor at www.ratemyprofessor.com, or editing an encyclopedia entry on their favourite trivia topic on www.wikipedia.com.

Community-Developed Software – Apache!

Blogging - “an army of citizen journalists”• The news media is increasingly using the community of bloggers

(known as the “blogosphere”) as a source of new leads.

Wikipedia: Community-uploaded content

Flattening Forces – Flattener #4

…vanilla making in software and other areas is

going to shift to open-source communities…

commercial future belongs to

those who know how to make the richest chocolate

sauce, the sweetest, lightest whipped

cream, and the juiciest cherries to sit on top …

-From winner takes all to lets all win-Individual genius to gifted communities

-Free software movement-The Case of Chinese automakers

Flattening Forces – Flattener #5

Outsourcing - “Y2K and India”

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.

The Beginning of the India-US relationship.

Indians were lucky to be the second –buyers of fiber optic companies

Flattening Forces – Flattener #5

The Case of Indian outsourcing companies

"Do you remember how I fixed your tires and your pistons

during Y2K? Well, I could actually give you a whole lube

job if you like. And now that you know me and trust me,

you know I can do it.“

"Fortune favors the prepared mind.“Louis Pasteur

Flattening Forces – Flattener #6

Offshoring - “Running with gazelles, eating with lions”… China???

When a company moves its production from its home country to another country, where it can be done with “cheaper labour, lower taxes, subsidized energy, and lower health-care costs”

China signing the WTO agreement in 2001

Focusing too much on this “race to the bottom” of wages may blind us to an even more unsettling development: China’s race to the top, making it the lion!

Flattening Forces – Flattener #6

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 a gazelle.

When the sun comes up, you better start running.

-Japan’s China + 1 approach -Off-shoring benefits all

Flattening Forces – Flattener #7

Supply- chaining - “Wal-Mart - Eating Sushi in Arkansas”

Supply-chaining is a method of collaborating horizontally- among suppliers, retailers, and customers- to create value. Supply-chaining is both enabled by the flattening of the world and a hugely important flattener itself, because the more these supply chains, grow and proliferate, the more they force the adoption of common standards between companies, the more they eliminate points of friction at borders, the more the efficiencies of one company get adopted by the others, and the more they encourage global collaboration.

Just-in-Time (JIT)

Wal-Mart installed RFID (radio frequency identification) Microchips

Drawbacks to efficiency obsession – Wall-Mart controversy• locking overnight workers into its stores • contracting illegal immigrants to work as janitors.

Flattening Forces – Flattener #5

Wal-Mart

"I wish that I could say we were brilliant

and visionary, [but] it was all born out of necessity.“ said

Jay Allen, Wal-Mart's senior vice president of corporate

affairs.

Flattening Forces – Flattener #8

Insourcing - “UPS - What the guys in the funny brown shirts are doing”

Insourcing is hiring another company to handle your supply chain.

UPS (United Parcel Service)handles all the routing and scheduling of Papa John’s supply trucks.

Toshiba insourced with UPS and was told it could save a lot of money by moving its laptop repair facility inside of UPS’ central distribution centre in Louisville.

Order a pair of shoes from www.nike.com and a UPS employee receives the message, picks the shoes off the shelf, inspects them, and ships them to you.

Flattening Forces – Flattener #9In-forming - “Google, Yahoo!, MSN Web Search”

One piece of evidence that Google is a flattener is its user base: only 1/3 of searches are U.S.-based and less than 50% are in English

In-forming is searching for knowledge. It is about seeking like-minded people and communities.

Google connects users with information and media, Yahoo! Groups connects people with similar interests to each other. It currently has about 13 million individuals participating every month in 4 million active groups. You can now communicate with like-minded people in private, semi-public, or public discussions regardless of time or distance.

“If someone has broadband, dial-up, or access to an Internet café, whether a kid in Cambodia, the university professor, or me who runs this search engine, all have the same basic access to overall research information that anyone has. It is a total equalizer.” (Sergey Brin, Google’s co-founder)

Flattening Forces – Flattener #5

Testimonial from Google user

I just want to thank Google for teaching me how to find love. While looking for myestranged brother, I stumbled across a Mexican Web site for male strippers-and I was shocked. My brother was working as a male prostitute! The first chance I got, I flew to the city he was working in to liberate him from this degrading profession. I went to the club he was working at and found my brother. But more than that, I met one of his co-workers . . . We got married last weekend [in Mexico], and I am positive without Google's services, I never would have found my brother, my husband, or the surprisingly lucrative nature of the male stripping industry in Mexico!! Thank you, Google!

Flattening Forces – Flattener #10

The Steroids - “Digital, Mobile, Personal and Virtual”

Combination of small factors that amplify the effects of outsourcing, off-shoring, uploading, supply-chaining, insourcing, and in-forming.

An emerging digital flattener is VoIP (“voice over Internet Protocol”), which allows people to make phone calls using a broadband Internet connection.

Wireless Internet access allows people to work online from their portable computers in airports, hotel lobbies, libraries, and even coffee shops. (mobility)

Search engines, personal computers and peer-to-peer file sharing are examples of personalization and virtual accessibility to any information.

Triple Convergence

Convergence I 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 levelled the global playing field became.

Convergence II Businesses needed to begin collaborating horizontally. Horizontalization

means companies and people collaborate with other departments or companies to add value creation or innovation. Friedman's Convergence II occurs when horizontalization and the ten flatteners begin to reinforce each other.

Convergence III When the communist model nations like Russia, India, China etc 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.

Thank You