World is Flat

! e globalized world in the twenty-first century

Thomas L. Friedman
Globalization
1492-1800 Globalization 1.0
Shrank world from a size Large to Medium
Countries globalizing
1800-2000 Globalization 2.0
Shrank world from a size Medium to Small
Companies globalizing
2000+ Globalization 3.0
Shrank world from a size Small to Tiny
Individuals collaborating
& competing globally
Flattener
10 Flattening Factors
• Berlin Wall Coming Down
• Netscape IPO
• Work Flow So" ware
• Uploading
• Outsourcing
10 Flattening Factors
• Offshoring
• Supply-chaining
• Insourcing
• In-forming
• ! e Steroids
11/9/89
• Berlin Wall comes down
• Tipping point for free market
• societies
• Moved away from central planning
• Empowered individuals
“Evil Empire” defeated by:
– Reagan?
– CNN?
– Gates, Jobs, McNealy,
– …?
Bin-Laden?
8/9/95
• Netscape IPO
• 4 years a" er Berners-Lee invented the
• Web Universal usability, accessibility and
interoperability of the Web
• Win 95 shipped 15 days later
• Number of Internet users doubling every 53
days
8/9/95
• Spawned Internet bubble
• Overabundance of fiber optic capacity
• Communication costs plummeted
• “Second buyer” (India) made out like a
bandit
Workflow Software
Let’s Do Lunch: Have Your Application Talk to My Application

• Collaboration
• Rapid development
• Rapid deployment
• Cheapest sources for coding, testing,
implementation
• Everyone can create and maintain digital
content
Uploading
Self-Organizing Collaborative Communities

• Open source
– For production
– Apache blessed by IBM
– Geeks making business decisions
• Blogs
• Wikipedia
• Not controlled by corporations or Government
Outsourcing
• Y2K and India
• Talented competent programmers and
engineers who will work for less
• Economic imperative
• Outsource everything you possibly
can
Offshoring
• Rather than outsource jobs,
• Send the whole factory to India or China
or Indonesia or ……
• Not just manufacturing
– Management
– Medical
– Consulting
– Accounting
Walmart
Supply-chaining
Supply-chaining
• Wal-Mart is the 800-pound gorilla
• JIT to the nth degree
• Totally integrated
• IT infrastructure as a key competitive advantage
• Suppliers as partners
• RFID
Insourcing
Point 1 - UPS is not only shipping parcels, but also
providing smart business solutions

Example #1:
UPS fixes laptops for companies to speed up service.
3 day turn-around, instead of week (s) for product
repairs
Example #2: Take orders from Nike.com, fill the order from
a warehouse staffed and operated by UPS and ship with
UPS.
Insourcing
• UPS
• Intimate collaboration
• 3rd-party managed logistics
• “! ey” act as part of “Your” company
– Fixing Toshiba laptops
– Managing delivery of Papa John’s Pizza supplies
– Packaging Segrest Farms live tropical fish for delivery
– Picking, inspecting, packing and delivering Nike
– shoes
– Same for Jockey shorts s to improve
Working with Plow and Hearth furniture supplier
packaging and reduce breakage
In-forming
• Building and deploying your personal
information supply-chain
• Google – now 1 billion searches per
• day
Soon “everything” will be searchable
The Steroids
• “Making collaboration digital, mobile, personal, virtual” –
Carly Fiorina
– Computing capabilities - including speed, I/O rate and storage
capacity
– IM and file sharing – BitTorrent, Kazaa
– VoIP Skype
– Conferencing – HP & SKG
– Video ced graphics – from video games
–– Advan – communicate with anyone from anywhere
Wireless
Triple Convergence
It is this triple convergence - of new
players, on a new playing field,
developing new processes and habits
for horisontal collaboration -
that I believe is the most important
force
shaping global economics and politics
in
the early twenty-first century.
The New Middlers
The New Middlers
• ! e Great Collaborators and Orchestrators
• ! e Great Synthesizer
• ! e Great Explainers
• ! e Great Leveragers
• ! e Great Adapters
• ! e Green People
• ! e Passionate Personalizers
• ! e Great Localizers
Education
The most important ability is
to learn how to learn
CQ+ PQ >IQ
CQ: curiosity quotient
PQ: passion quotient
IQ: intelligent quotient
Now that foreigners can do left-
brain work cheaper, we in the
US must do right-brain work
better
! e

coming

tsunami

in public

education
Challenges
• Numbers gap
• Ambition gap
• Education (top & bottom)
• gap
• Funding gap
Infrastructure gap
• In the Age of Flatism, these gaps are
what most threaten our standard of
living.
Rules
Rule # 1

“When the world goes flat – and you are

feeling flattened – reach for a shovel and dig
inside yourself. Don’t try to build
walls.”
Rule #2

“And the small shall act big . . . One way small

companies flourish in the flat world is by learning
to act really big. And the key to being small and
acting big is being quick to take advantage of all
the new tools for collaboration to reach farther,
faster, wider, and deeper.”
Rule #3

“And the big shall act small . . . One way that

big companies learn to flourish in the flat
world is by learning how to act really small
by enabling their customers to act really
big.”
Rule #4

“! e best companies are the best collaborators. In

the flat world, more and more business will be
done through collaborations within and between
companies for a very simple reason? ! e next
layers of value creation are becoming so complex
that no single firm or department is going to be
able to master them alone.”
Rule #5

“In a flat world, the best companies stay

healthy by getting regular chest X-rays and
then selling the results to their clients.”
Rule #6

“! e best companies outsource to win, not to

shrink. ! ey outsource to innovate faster
and more cheaply in order to grow larger,
gain market share, and hire more and
different specialists – not to save money by
firing more people.”
notes
You can use this summary for non commercial purposes
and cite the credit.
If you can improve this presentation with better slide/
image/illustration, please send it to my email and I will
put them as part of future update.

summarized by
Andi S. Boediman
Strategic Innovation
Consultant
andisboediman@gmail.com
www.ideonomics.com