Wednesday, January 2, 2008

Why the World is Not Flat

Why the World Isn’t Flat

I’m glad we had to read this book because I had read it early, but only the 2nd edition. The book is a very entertaining read, even on the second time. For everyone, you should pick up the NYT and read some of his articles. Or perhaps some of his other books like the Lexus and the olive tree or aside from globalization, from Beirut to Jerusalem (which my gf just gave me). He has clever diction and often gets to the heart of some our times most pressing issues.
Friedman puts it directly to us the reader. Most his audience I assume is American. No longer do we have the overwhelming advantage of dominance in the world’s markets, as that will longer be the case. Of course as of now America is still undoubtedly singularly still the greatest nation the world has ever seen. However, as Friedman points out over time the importance of these huge groups such as nations and corporations is decreasing and that of the individual is increasing.
The effect this will have on me is that I will soon be facing increased competition from not just my peers around me but those of my peers from around the globe. As people right now are experiencing in the United States this can mean jobs will be lost or gained as opportunity presents itself. I feel that the best way to deal with the flat world is to adapt. It is just like survival of the fittest where animals that cannot adapt go extinct. On a better note I just read an article about the continuing success of kiwi breeding in New Zealand!
I appreciate Friedman’s keen sense of simplicity in laying out his ten flatteners. Open source is the greatest in my opinion. There is the ever-present conflict between customization and standardization. Open source projects make it possible for individuals (like me!) to develop software. Open source can successfully compete with big companies as well (Linux etc.). Open source also means greater opportunity for everyone in open source politics, culture and much more. Globalization has the chance to transfer power from the few to the many!
Nevertheless I’m sorry to say that there are so many problems in taking every word of his book entirely seriously. Sure, I need to hone a varied and important set of skills to remain “irreplaceable”. But the globalised world is not here yet. To think this way can lead to folly. Since Friedman gives many “stories” and examples in his book here’s one in addition: a little over ten years ago Coca Cola rebranded itself as going aggressively global and emphasized that there would be no distinction between international and domestic. So they set huge growth targets, focused on a few megabrands, and underwent a load of centralization and standardization. Well, I admire Coca Cola a lot, my dad worked for them for a little while in Brazil and said there were an incredibly future oriented company, buying up land for later use and setting plans for far into the future. As Steve Jobs said, the consumer doesn’t tell you what they want, you tell them what they want. Nevertheless, this plan terribly backfired and I believe they lost something like $100 billion in market value. Oops. Haha. Well that’s unfortunate. So now they are setting more realistic goals and diversifying. They’ve learned a lot from Japan, where if you’ve ever been there they have a huge assortment of products. I’m sure you’ve heard about entering the vita-water sectors as well. The lesson learned here is that globalization is not finished and not even close.
In fact, most of the technological advances that have made the world a smaller place have only served to increase local ties. Sure information, people, money etc can move quicker and to basically anywhere. But the world is only starting to truly benefit from globalization. Take the web for instance; you should be connected with the whole world when you get on. But don’t you end up chatting mostly with close friends and emailing cross-country. We are more wired but it does not mean that we are any more “global”.
From the business investment standpoint most fixed investment is internal. “Our investment knows no boundaries” is what companies say. But if you’ve looked at where investment comes from it’s a largely domestic thing. Politically we are not yet global citizens. If you ask people what they are they’ll respond with a nationality or ethnicity. Parochial ties are so strong. Some people I’ve met won’t even say a country but give me a region like Bavaria or Catalonia. These are reasons why even on the smaller scale such as the EU (haha not so small maybe) globalization has taken a hit. Someone said if globalization were given a vote in the United States today it would lose. We have the Mexicans, Britons have the Polish, the French have Algerians, Germans have Turks and the list goes on and on.
I truly believe in the flattening of the world. But the amount of exaggeration that people have used in describing globalization is ridiculous. Friedman talks about a world where distance, geography, and language don’t matter. But my god they do!
Even when all are in common it does not mean a flattening in its entirety. Look at the Canada-US border. The biggest bilateral trade in the world and yet there is more trade between provinces in Canada than between states of similar size and distance. Obviously some people care about these boundaries are artificially as they are. When you look at trade figures I am shocked, not by the huge numbers, but by the small numbers. There’s still a huge amount of international trade however don’t get me wrong.
But I mean, globalization is occurring but is far far far from complete. In fact, policies are very fickle as well. I remember a picture on the cover of the Economist, in 2006 or something, of the future of globalization showing a beached wreck see it? haha its probably of the Aral Sea, what a calamity. Anyways... I guess I feel pessimistic because of the sub-prime crisis this year. Who knows what will happen. Policies are as capricious as the wind. And an election is coming up! Oh no… haha as decreasing numbers of votes turn out Americans find themselves with fewer leaders and choosing between as Nader said, between Tweedle Dee and Tweedle Dum.
As the world flattens, as it looks like it will in the coming years we might find many more Americans without jobs. After all, many of them are overpaid for jobs that others who are more tenacious and determined could do for much much less. Luddites destroyed machines in the past for taking their jobs. Nowadays theres lots of violence against the minorities that can take jobs. But its survival of the fittest right?!
In the future we will experience more shocking news. Jobs will be lost and gained. Economies will plunge and soar. People will be put in poverty and some will become richer than anyone has ever been. This years election will come and go. Gas will be become more expensive. Maybe the next google will come around. There is global warming. And hopefully mankind doesn’t destroy itself in the process.
I guess some people at this point, after reading Friedman’s book or whatever, will be wondering how to be on the upside prospering in spite and because of all these things. How to prosper and be the next Bill Gates and how to change the world! Well you need skills that no one else can utilize as well as you. You’ll need friends in high places and friends to keep you sane. And heck, Friedman doesn’t go to lengths on this, but you’re gonna need some luck because regardless of a flat world or not, the world is changing.
And yet. What I wonder is whether you’ll be happy. Is what really matters the end result? Because if that’s true, then you might as well be dead.
But anyways. Happy new year to all!!! Heres to a prosperous, educational, satisfying, fun, and happy 2008! *clinks glasses* (btw it was handed to us by a Macedonian waiter who works for a Turkish chef whose company of restaurants is owned by a Frenchman whose investment parters come from China, Korea and Japan selling Argentine meat to markets in India and Mexico. The connections go on and on and on, but at least the glass is made in the USA).

No comments: