Overview: The World is Flat – Thomas L. Friedman

Book: The World is Flat by Thomas L. Friedman
Book: The World is Flat by Thomas L. Friedman

World trade and economic patterns changed when Columbus discovered the world was round in 1492. Business managers were able to collect data on different countries, trade routes, and trading goods around the world. This discovery, and its resulting shrinking of the world is what is now termed globalization 1.0. The Industrial Revolution, which brought about discoveries such as the steam engine and railroads, began around 1800. This allowed businesses to reach more people around the world and is now termed globalization 2.0. Business managers collected data about railroad trade routes to other markets and countries. Globalization 3.0 is what we attribute to advances in information technology, such as the internet and smartphones, which have allowed businesses to remove all distance barriers from trading with other countries and people during the current age of information. Managers collect data about outsourcing work to other countries with cheap labor, and data about cheap manufacturing costs in other countries.

Friedman explained that during the current globalization 3.0 era, the world became flat again. This means that all businesses, small and large around the world, have an equal opportunity to compete and grow. Modern technology has allowed smaller businesses with meager resources and people in more remote regions of the world to compete with larger companies with vast resources. This is important for small and large businesses to understand. Understanding this allows smaller businesses with lower overhead cost to provide competitive pricing against larger businesses, and larger businesses will have to match those prices through economies of scale or else go out of business.

Recently, during the interview for a new job, I have been able to differential myself against the competition by showing that I have obtained 2 technical degrees, and can easily learn new technical skills. Also, I have over 9 years of experience in sales and marketing as a technical sales engineer while not having any business degree. The 3rd differential advantage I have are my multilingual fluency in Russian, Ukrainian, and English. Combining all these different backgrounds I was able to differentiate myself and beat 35 applicants for the same technical position that didn’t require having all of the skills for the position. By having such diverse experience, I believe it gave me an advantage in today’s flat world of students competing for jobs.

In today’s current business environment, I thought of 3 new flatteners not mentioned on Friedman’s list that would have a tremendous effect on the world of business: Automation, A.I., and free renewable energy. These 3 new technologies will flatten the world a tremendous amount, making more people in remote reaches of the world to come up to an equal level to the rest of the world rapidly. Eventually I believe these technologies will make the world so flat that business could become obsolete in a post-scarcity world economy.

Michael Porter has suggested various competitive strategies to combat competition such as analyzing factors like bargaining power of buyers, suppliers, barriers to entry, rivalry, and threat of substitution. In today’s highly globalized world, it is important to analyze the rivalry before starting a business. For example, the footwear business has big players like Nike and Reebok. There is not much threat of substitution as people are expected to wear shoes for centuries. In order to give competition to big companies, it is important to target a niche market, which is not attractive to companies like Nike and Reebok. It would be easy to target low income level areas and provide low cost products to them.

It is true that globalization has impacted the whole world, and different countries are working together to great extent. Friedman’s ten forces are majorly dependent on the Internet. People in developed countries like the U.S. and Canada are highly connected to the Internet, but there is a large population of the world that is devoid of internet and the services like PayPal, outsourcing, and the supply chain which are integral parts of Friedman’s 10 forces. A great portion of the population live in rural settings where poor infrastructure, health care, education, and employment, impede Internet adoption. When a large portion of the population lives without electricity, getting access to the Internet isn’t even an option. Therefore, the world is still not truly 100% flat despite significant advancements over all the years. Some steps are already taken to move in the right direction, for example, Internet.org by Facebook initiative, which mission is to connect the two thirds of the world that does not have the Internet, but there is still a lot to be done.