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Tuesday, April 05, 2005

Globalisation 3.0 - Its A Flat World -Part I

(Via NYTimes) Thomas Friedman writes, "The world is flat." - and therein lies a tale of technology and geoeconomics that is fundamentally reshaping our lives - much, much more quickly than many people realize. It's time to wake up and prepare ourselves for this flat world, because others already are, and there is no time to waste. Excerpts with edits and comments:

- "Outsourcing is just one dimension of a much more fundamental thing happening today in the world," Infosys's Nilekani tells Friedman explaining -"massive investment in technology, especially in the bubble era, in putting broadband connectivity around the world, undersea cables, all those things." With cheaper systems and global availability,there was an explosion of e-mail software, search engines like Google and proprietary software that can chop up any piece of work and send parts of work to various places for remote development. When all of these things suddenly came together around 2000 they created a platform where intellectual work, intellectual capital, could be delivered from anywhere. It could be disaggregated, delivered, distributed, produced and put back together again - and this gave a whole new degree of freedom to the way we do work, especially work of an intellectual nature. This has been building for a long time.

- Globalization 1.0 (1492 to 1800) shrank the world from a size large to a size medium, and the dynamic force in that era was countries globalizing for resources and imperial conquest.

- Globalization 2.0 (1800 to 2000) shrank the world from a size medium to a size small, and it was spearheaded by companies globalizing for markets and labor.

- Globalization 3.0 (which started around 2000) is shrinking the world from a size small to a size tiny and flattening the playing field at the same time. And while the dynamic force in Globalization 1.0 was countries globalizing and the dynamic force in Globalization 2.0 was companies globalizing, the dynamic force in Globalization 3.0 - the thing that gives it its unique character - is individuals and small groups globalizing. Individuals must, and can, now ask: where do I fit into the global competition and opportunities of the day, and how can I, on my own, collaborate with others globally. Globalization 3.0 is not only going to be driven more by individuals but also by a much more diverse - non-Western, nonwhite - group of individuals. In Globalization 3.0, we shall see every color of the human rainbow take part.
- When the world is flat, you can innovate without having to emigrate. This is going to get interesting. We are about to see creative destruction on steroids. 10 events and forces that all came together during the 1990's and converged right around the year 2000.
- The first event was 11/9. Nov. 9, 1989, is the day the Berlin Wall came down, as the windows went up - the breakthrough Microsoft Windows 3.0 operating system, which helped to flatten the playing field even more by creating a global computer interface, shipped six months after the wall fell.
- The second key date was 8/9/1995, -the day Netscape went public, which did two important things. First, it brought the Internet alive by giving us the browser to display images and data stored on Web sites. Second, the Netscape stock offering triggered the dot-com boom, which triggered the dot-com bubble, which triggered the massive overinvestment of billions of dollars in fiber-optic telecommunications cable. That overinvestment, by companies like Global Crossing, resulted in the willy-nilly creation of a global undersea-underground fiber network, which in turn drove down the cost of transmitting voices, data and images to practically zero.The Netscape revolution brought people-to-people connectivity to a whole new level. Suddenly more people could connect with more other people from more different places in more different ways than ever before.
- Third flattener, Workflow – This is shorthand for all the software applications, standards and electronic transmission pipes, like middleware, that connected all those computers and fiber-optic cable. If the Netscape moment connected people to people like never before, what the workflow revolution did was connect applications to applications so that people all over the world could work together in manipulating and shaping words, data and images on computers like never before.
This breakthrough in people-to-people and application-to-application connectivity produced, in short order, six more flatteners - six new ways in which individuals and companies could collaborate on work and share knowledge.
- One was "outsourcing" - all kinds of work - from accounting to software-writing - could be digitized, disaggregated and shifted to any place in the world where it could be done better and cheaper.
- The second was "offshoring""- sending whole factory from Canton, Ohio, to Canton, China.
- The third was "open-sourcing.". I write the next operating system, Linux, using engineers collaborating together online and working for free.
- The fourth was "insourcing". - I let a company like UPS come inside my company and take over my whole logistics operation - everything from filling my orders online to delivering my goods to repairing them for customers when they break.
- The fifth was "supply-chaining" - Creating a global supply chain down to the last atom of efficiency so that if I sell an item in Arkansas, another is immediately made in China.
- The last new form of collaboration is "informing" - This is Google, Yahoo and MSN Search, which now allow anyone to collaborate with, and mine, unlimited data all by themselves.
So the first three flatteners created the new platform for collaboration, and the next six are the new forms of collaboration that flattened the world even more.
The 10th flattener are "the steroids" - These are wireless access and voice over Internet protocol (VoIP). The steroids turbocharge all these new forms of collaboration, so you can now do any one of them, from anywhere, with any device.

Part II shall follow shortly.
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