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Tuesday, August 30, 2005

An hour with Tom Friedman

I had the special opportunity with about a thousand other Microsoft employees to attend New York Times op-ed columnist and three-time Pulitzer winner Thomas Friedman's talk on his book "The World Is Flat". I have avidly followed his columns in the Times but didn't realize what a great speaker he was. He enthralled the audience with his thesis on globalization: what is was, how it has progress and what it is today.

He notes there have been three eras of globalisation:
1.0 - the years between 1492 and 1820, when you went global as a country. Spain discovered America, Britain colonized India, Portugal colonized East Asia.
2.0 - between 1820 and 2000, when multinational corporations drove globalization.
3.0 - while we were sleeping, the third era of globalization has started, since Y2K, when the world has shrunk and flattened at the same time. This era is evidence to an individual's ability to globalize.

Friedman also talked about a chapter in his book the 10 days that flattened the world. It is actually 'the 10 forces that flattened the world'.
  1. November 9, 1989. The fall of the Berlin wall. Prior to this you had an Eastern policy, a Western policy etc. After this, everything changed. You now had a global policy. Globalization became a reality. He goes on to say "when the wall came down, windows went up", referring to the launch of Windows 2.0 six months after the fall of the wall. That was the first flattener.

  2. August 9. 1995. Netscape Communications goes public. He says that was the day the Internet officially became open and accessible to grandma and grandkids alike. And it triggered the dot-com boom, which triggered the dot-com bubble, which in turn triggered the wild and wanton overinvestment in fiber optic backbones ($1 trillion in 5 years, I think he said). Through our 401Ks and investment dollars, we paid for Global Crossing and JDS Uniphase, financing the dot-com boom. This drove down the cost of connectivity and the accidental outcome was that a few years later, Bangalore and Beijing and Redmond became next-door neighbors.

  3. Which leads to the the next flattener, one he referred to as Workflow. He cited protocols and standards that made interoperability a possibility, regardless of geographical location.

  4. The next flattener he calls Outsourcing. Suddenly it was possible for your tax returns to be done in Bangalore, ditto your X-ray results. You moved your services to where it was most efficient, cheapest and effective. This is first in six forms of collaborations that cap off the 10 days.

  5. Another flattener was Offshoring, which allowed you to move your factory lock, stock and barrel from Canton, Ohio to Canton, China. Offshoring has existed before but the new wave came about when China entered the WTO and when Indian software companies fixed our Y2K issues.

  6. The next great flattener according to him was Uploading: the collaborative model of open source software that led to new OSes and browsers. Also people uploading ideas by way of blogs and commentary. And Wikipedia. This is where the individual really got his say.

  7. Next on his list was Supply-chaining. That is his synonym for Wal-Mart. He talked about how Wal-Mart, America's biggest company, China's eighth largest trading partner, got to be so big without creating anything at all. All they did was perfect the supply chain.

  8. Another form of colloboration was Insourcing. The example he gave here just floored me. I didn't realize this was happening. On hindsight though it just seems inevitable. He talked about UPS. Yes, the guys in funny shorts and brown trucks. UPS goes into your company and takes over your logistics. His example: You buy a Toshiba laptop and it breaks down. You call their 800 number and they tell you to take it to the nearest UPS Store and so it can be send to Toshiba for repairs. What you don't realize is they send it on a plane to Louisville, KY, UPS's global HQ and main hub, where the laptop is repaired by a UPS employee. The laptop never gets to Toshiba. They don't want to see your broken laptop. They've insourced it to the friendly folk at UPS! Others do it too... Nike.com, Papa John's Pizza to name a couple.

  9. The last new form of collaboration, he calls Informing. This is what Google, MSN Search and Yahoo do. It is what Tivo does for you: allowing you to retrieve and use information.

  10. The final ingredient, he calls Steriods. These are the technologies and phenomenons that are turbo-charging the other 9 flatteners. These are advances in Wireless, VOIP and microprocessors, among others.

All in all, an hour well spent. I haven't read the book yet. Now I will.

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