Sunday, June 22, 2008

The World is Flat or Round. Exploring..

For last few days, I've been reading the book, 'The World is Flat' by Tom Friedman. A very nicely written, intruiging approach to paint overall picture of globalization.

The book starts with a section, which educates the readers, about the factors which have led to flattening of the world. The ten flattening factors/events being:
  1. 11/09/89 - Fall of Berlin Wall and Division of USSR - event that led to liberation of people from chains of cummunism and opening the gates of capitalism.

  2. 08/09/95 - Netscape IPO - The New age of Connectivity and evolution of Internet, the big leveller for people across the globe.

  3. Work Flow Software - The evolution of web-services, platform independent approach towards computer applications and collaboration software which allowed people to work in teams from all over the world.

  4. Uploading - aka Open-Source approach of harnessing community power for content development, collaboration and knowledge management.

  5. Out-Sourcing - Y2K which started the era of outsourcing exposed the western world to cheaper easter frontiers. This wave started from technology but has now swept across all the industries in the west.

  6. Off-Shoring - Moving the expensive work done in US and Europe to the lands in India and China at a cheaper cost and gaining price advantage.

  7. Supply-Chaining - Though Wal-Mart is always painted as Supply Chain champion bringing the its advantages to the common people, yet all the companies are synchronizing their operations through supply chain to bring out operational efficiency.

  8. In-sourcing - process of diversifying in the areas sorrouding your expertise. It can be best illustrated with UPS example in which they transformed themselves from a carrier to logistics company which helps companies in managing their logistics operation.

  9. In-Forming - Nothing more and Nothing less than Google can explain it. Google has brought the information revolution making same info available to everyone.

  10. The Steroids - Small Gadgets like Cell-Phone and PDAs are shrinking the world and bringing to your fingertips at every moment.


Insight:

DOT COM BUST - Boon or Bane : With the growth of Internet and dot com companies, companies started investing heavily on infrastructure. Connectivity was crucial for this growth. Companies like Worldcom and Global Crossing set up fiber-optic networks across the globe connecting the sleeping asian tigers to western bigwigs. With overinvestment and bubble in the technology sector, it was set to crash. When the doomsday came, these infrastructure companies went bankrupt along with many other companies which had made investment for future. Those companies are no more. Their investments, which were later resold to other companies at penny prices, became the backbone of the business in the years to come. This not only became a big leveller for all the countries, but also provided immense opportunity for countries like India and China which had huge human capital sitting at home ready to work.

The Triple Convergence: Why it happened at the new Millenium ??
  1. Emergence of Web platforms and Investment in Fiber Optics Connectvity.

  2. Opening of three big economies in 90's - India, China and Russia.
  3. Companies of the West searching for next level of Operational Efficiency.

For guys who want to read this book online: Download here


P.S. - With due respect for Friedman, I'm not giving this link to promote piracy. Just using few of the above flatteners , to make it available to thousands of people living India and China as $30 is still a big deal in many parts of the world :)


will continue writing as I sail through the river of thoughts .....

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