Friday, November 11, 2005

Book review: The World is Flat

“The World is Flat” says Tom Friedman, three-time Pulitzer prize winner. Pretty apt for a book by a New York Times Columnist who was born in Minneapolis, studied in Oxford, and worked in Beirut and Jerusalem, and who got the title from a statement made by a CEO in Bangalore. In an interview, Nandan Nilekani of Infosys said, “The world is being levelled” – and what he really meant, says Friedman, is that The World is Flat.

Expanding his take on Globalization in his earlier book, Lexus and the Olive Tree, Friedman concentrates on the relatively new phenomenon of High Tech outsourcing, primarily in India and China. Already, companies in these two countries process U.S. Tax Returns, analyze CAT Scans, handle worldwide insurance claims and even do Friedman’s job – journalism. All this, writes Friedman, is part of a fundamental change the world is undergoing – flattening – with nine other forces, including the fall of the Berlin wall, Open source collaboration, Google search technology and the digital “steroids” like Palm pilots and Wireless Technologies.

The book gets overly defensive at times; the author’s nationality shows in his obvious fear that American jobs are at stake in the flattening process. From fright at Indian CEO Jaithirth “Jerry” Rao’s statement, “Any activity where we can digitize and decompose the value chain, and move the work around, will get moved around”, Friedman moves towards realizing that this will mean more meaningful work for Americans. He concludes that the way ahead (for Americans) is not to stop outsourcing, but to upgrade their skills so they can claim their “slice of the bigger but more complex pie”. It’s not going to be simple, he writes, but there’s no option but to be an “untouchable” – a person whose job cannot be outsourced.

Outsourcing today is just a repeat of what happened when the world started to be connected earlier, Friedman notes. And what does he say connects the world today? Technology. With access to the Internet, any individual can empower himself anywhere – noted in the book are interesting examples: people printing Boarding pass online so they can board before other passengers; a friend using wireless access to send email to Kazakhstan from a train in Japan traveling at 240 Km/hr; an Indian company building a game on “American Wild Wild West” using Google to find out what a saloon looked like. The book is laced with enlightening examples, allowing for very individual interpretations to his theory.

India benefited from the overinvestment in undersea fiber optic cables by Americans, writes Friedman. When these investments went bust in 2000, the bankrupt companies were sold at throw away prices, bringing down the cost of bandwidth and therefore, making “remote” business process outsourcing (BPO) possible and profitable in India. Friedman postulates that it started with Y2K – an acronym for the work involved in converting massive legacy systems to accept four digit dates – and spread to running American back offices today. He even suggests that Y2K be India’s Second Independence Day – a day that helped give freedom from unemployment to a large number of Indians. (While this may not be feasible, it does make you stop to think!)

But the book does offer a warning: that no developing country can afford to be complacent, that other developing countries would be more than glad to grab the Indian part of the pie. China, for instance, is “a powerhouse of low cost manufacturing….it can do high-quality low-cost manufacturing better than any country, and increasingly, it can also do high-quality higher-cost manufacturing”. Friedman suggests deeper reform – removing more of the bureaucracy that hinders business, loosening labour laws, bettering infrastructure – something he says is inevitable in the flat world. The message is simple: The more you just sit there, the more you will be run over.

Friedman also warns about the dangers that resulted from 9/11. The flat world, he says, makes it possible for the perpetrators of terror to co-ordinate in a way that has never been possible earlier. “Al-Qaeda has learned to use many of the same instruments for global collaboration that Infosys has”, he writes, but leaves the solutions on shaky ground. How can you stop the Osamas of the world from collaborating without shutting down the Internet and therefore, Friedman’s reason for the “flatness” of the world? This book holds no conclusive answers.

Friedman interviews a large number of people in very different environments – the book contains snippets from people all over the world. From the likes Bill Gates and eBay’s Meg Whitman, to Palestinian militants, to Fadi Ghandour, the CEO of Aramex, a package delivery service in the Arab World. Each interview seems to reiterate Friedman’s point, but will also give you a little more to think about.

“The World is Flat” is quite an enthralling read, filled with simple interpretations of a complex world. Running through the lively and provocative analyses, you will find yourself keeping the book down every few minutes, just to sit back and think. A very stimulating book for those who want to understand where the world is going, but don’t know where to start.


Blogger R said...

Keep blogging, especially as the world is getting flatter and we may get a chance to interact further...

6:12 AM, November 13, 2005  

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