The World is Flat
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Transcript of The World is Flat
Thomas L. Friedman
Globalization
• Globalization 1.0
• Globalization 2.0
• Globalization 3.0
Globalization 1.0
• Start: 1492 (Columbus Discovered America)
• End:1800
• Player: Country
Globalization 2.0
• Start: 1800
• Interrupted by
• World War I (1914-1918)
• Great Depression (1929)
• World War II (1940-1945)
• End: 2000
Globalization 2.0
First Half
• Falling of Transportation Cost
• Steam Engine
• Rail Road
Globalization 2.0
Second Half
• Falling of Telecommunication Cost
• Telegraph
• Telephone
• PC
• Fiber Optics
• WWW
Globalization 2.0
Player: Multinational Company
Country vs Company
Thailand $47,679 M(government total revenue)
Microsoft $44,300 M(revenue)
1
2
1
2
FY 2007 (Estimate) Source: Bereau of the Budget
FY 2006 Source: Wikipedia
Globalization 3.0
• Start: 2000
• Player: Individual
Globalization
• 1.0 - Country
• 2.0 - Company
• 3.0 - Individual
10 Forces That Flattened The World
Flattener #1
Fall of Berlin Wall
Flattener #1
• 1989
• No more Communism
• Democracy
• Free Market
• Toward to Single, Global Market
Flattener #2
Netscape Navigator
Flattener #2
• 1995
• PC
• Internet
• WWW
• Communication
Flattener #3
Workflow Software
Flattener #3
• Working together
• Different Hardware
• Different Location
• Web technology
• Effect from Flattener #2 Netscape
Flattener #3
HTML
AJAXSOAP
XML
HTTP
TCP/IP
LotusCase Study
Flattener #3
Cause more 6 Flatteners
• #4 Uploading
• #5 Outsourcing
• #6 Offshoring
• #7 Supply-chaining
• #8 Insourcing
• #9 In-forming
Flattener #4
Uploading
Flattener #4
• Power of Community (Connected Individuals)
• Community-developed
• Softwares - Open Source
• Answers
• News & Commentary - Blogging
• Content - Wikipedia
Flattener #4
• Community-developed Answer
• Goldcorp Inc.
Case Study
Flattener #5
Y2K
Flattener #5
OutsourcingY2K
Outsourcing
• Split
• Service
• Manufacturing
• and perform elsewhere, where
• Most efficient
• Cost-effective
Y2K
• Outsource Accelerator
• India
Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)
Flattener #6
Offshoring
Flattener #6 Offshoring
• Split
• Service
• Manufacturing
• and perform elsewhere, where
• Most efficient
• Cost-effective
Flattener #6 Offshoring
• China
Flattener #7 Supply-Chaining (Transport)
Flattener #7
Supply-Chaining
#7 Supply-Chaining
#7 Supply-Chaining
Walmart
Manuf.
Manuf.
Manuf.
Customer
Customer
Customer
#7 Supply-Chaining
Flattener #2 Netscape (Communication)Flattener #3 Workflow (Software)Flattener #6 Offshoring (Manufacturer)
Sales Distribution Shipping
Flattener #8
Insourcing
#8 Insourcing
• Reverse of Outsourcing
• UPS & Toshiba
InsourcingCase Study
InsourcingCase Study
Flattener #9
In-forming
#9 Informing
• Information Finding
• Search Engine
Flattener #10
The Steroids
The Steroids
• Computing
• Instant Messaging, P2P
• VoIP
• Videoconference
• Computer Graphics
Processing
Storage
Data Transfer
Communication
Virtual Reality
The Steroids
• Computing
• Instant Messaging, P2P
• VoIP
• Videoconference
• Computer Graphics
Wireless
Triple Convergence
Convergence#1Converged Flatteners
Convergence #1
• Before 2000 - Semi-Independent
• After 2000 - Converged with another
• As Complementary Goods
• E.g. Paper/Pencil
Convergence#2New Business Platform
#1 Berlin Wall
#3 Workflow#2 Netscape
#4 Uploading #5 Outsourcing #6 Offshoring #8 Insourcing
#7 Supply Chaining#6 Informing
#10 Steroids
Accelerator
Business Process
Infrastructure
PoliticsGeographicEconomics
Convergence#3Emerging Regions
BRIC
BRIC
CountryPopulation(million)
GDP (trillion $)
Brazil 188 1.6
Russia 142 1.7
India 1126 4.0
China 1317 10.0
Total 2773 17.3
Developed Countries
CountryPopulation(million)
GDP (trillion $)
USA 301 13.04
EU 494 13.8
Japan 128 4.2
Total 923 31
Compare!
CountryPopulation(million)
GDP (trillion $)
GDP per capita($)
BRIC 2773 17.3 6,238
Developed 923 31 33,586
Thailand 62 0.58 9,100
Companies and the Flat World
Rule #1Core Competency
Greer & AssociatesCase Study
Greer CompetA
CompetitorB
Emerging
Emerging
Greer & AssociatesCase Study
Think Produce ExpertJobs
Think
Produce ExpertJobs
Produce
Old Way
New Way
Rule #2Small Act Big
AramexCase Study
FedEx DHL
Airborne
Aramex
Other
Middle East
1990
AramexCase Study
FedEx DHL
Airborne
Aramex
Other
Middle East
2003
AramexCase Study
FedEx DHL
Airborne Other
Middle EastAramex
Global Distribution Alliance
2004