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October 12, 2007

Chapter 8: The Right Stuff & Chapter 9: This is not a test

Filed under: Uncategorized — yoddha @ 12:57 pm

Friedman here compares the current situation to how America quietly lost its superiority in Basketball to other countries. Thus he tells us how America is losing its grounds in this flat world.

The Numbers gap: In 1957, Russia launched Sputnik. The US government (John F. Kennedy) motivated young people to take up science and contribute to the mission of manned space program for America. But today these engineers and scientists are retiring and the younger generation is not stepping into their shoes in sufficient numbers. At the same time, foreigners who used to make up the difference are either staying back home or are being kept out of America because of security reasons.

The Education gap: Most of the top students are children of recent immigrants. American students lack when it comes to applying mathematics to real-life tasks.

The Infrastructure gap: In the last few years, American government has changed its priority from enhancing infrastructure to unwanted wars. Japan today has cheaper and better connectivity facilities than America.

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Chapter 7: The Right Stuff

Filed under: Uncategorized — yoddha @ 12:32 pm

“What is the right education young people need to prepare for jobs of the new middle and how can they get this right education?” Friedman answers this question in this chapter. The most important ability required in this flat world is to “learn how to learn”.  That is why, today sum of Curiosity and Passion Quotients matters more than Intelligence Quotient

CQ + PQ > IQ

Other abilities that help create this new middle class of untouchables are:

  • People skills
  • As jobs requiring logical and linear talents move to places offering cost advantages, today one needs not only such analytical abilities (brain’s left-hemisphere capabilities) but also the ability to empathize, synthesize and think of bigger context (brain’s right-hemisphere capabilities).
  • A mere computing degree is not sufficient today. It needs to be combined with applications in other fields such as Robotics, Media or Information.
  • The right environment is also important.  Institutions, law and cultural norms that produce a level of trust, innovation and collaboration enables young people to bring new ideas into the market. The society makes sure that the intellectual property is protected, the means to research are available and the risks are minimized.

October 3, 2007

Chapter 6: The Untouchables

Filed under: Uncategorized — yoddha @ 8:27 am

Friedman first explains the meaning of ‘Untouchable’. It is one whose job is safe in the future.

While Free Trade has not impacted the jobs of specialized or localized people, it has definitely impacted the jobs of middle class people. The new middle class ‘untouchables’ will belong to mostly following categories:

  • Collaborators: Those who can work globally and assist collaboration in marketing, sales, and management. e.g. middle management jobs for companies such as Infosys.
  • Synthesizers: Those who synthesize multiple subjects into one. E.g. Mashing together craigslist.org and google maps.
  • Explainers: Those who understand the complex situations but explain in simple.
  • Leveragers: Those who leverage technology to produce innovative solutions.
  • Adapters: Neither specialists nor generalizers but those who are versatile.

Chapter 5: America and Free Trade

Filed under: Uncategorized — yoddha @ 8:19 am

In this chapter, Friedman answers the question whether it is beneficial for America to have Free Trade policy.

Friedman is against the lump of labor theory which assumes that the there is no new thing to be invented and thus there is a fixed lump of labor in the world. As America opens its jobs for countries such as China and India, it also gets more jobs because of increase in the sale of products such as Windows, Intel America manufactures.

While this free trade will damage the jobs based on material goods, the number of idea generated jobs will keep on increasing. Thus, America will benefit from this free trade policy provided it continues to churn out knowledge workers who are able to produce idea-based goods that can be sold globally. For instance, Netscape ignited a new industry, e-commerce that employs millions around the world.

Even in the past, when after World War II, America helped Japan and Europe become global economy, the standard of living in America too improved. Thus the way forward for America is to upgrade the skills of its people and compete globally.

October 2, 2007

Chapter 4: The Great Sorting Out

Filed under: Uncategorized — yoddha @ 2:40 pm

The revolution has just started and it is already influencing the lives of individuals, communities, companies and countries around the world in both positive and negative ways. The world will adjust to this flat world as the flattening continues and therefore, following the ‘The Triple Convergence’ that started around the year 2000, we are going to see ‘The Great Sorting Out’.

The flattening theory put forward by Friedman is similar to Karl Marx’s Communist theory in one way that both lay emphasis on how the new technology and capital remove the barriers, boundaries and restraints to the global economy in the future. But there is a problem as these barriers are removed. What will replace these barriers? We do not know this. But we do know that human beings need agreed norms of behavior and rules of commerce.

Friedman then through different complex instances tells us the importance of sorting out between different reasons.

India or Indiana: While outsourcing jobs to India means less jobs for Americans but if this does not happens, then it means less profit to different multinationals and thus lesser incomes to Americans.

A company belongs to whom: Earlier, it was said as General Motor goes, so goes America. Today, as Dell goes, so goes Malaysia, China and India. In 2004, when IBM and Lennovo collaborated, now is IBM Lennovo an American company or Chinese company?

Mutliple Identity disorder: Most of Wal-Mart’s employees do not earn as much as to get health insurance for their family. This leads to more discounts at Wal-Mart and thus more benefit for customers. But as tax-payer, you indirectly pay for the insurance of such employees. As shareholder, you get money from Wal-Mart. So for different identities, this flattening has different effects. How much flattening do you want?

Who owns what: While flattening leads to removal of barriers, it also leads to violation of intellectual rights. Do you want the world to be totally without barriers?

So during the coming years, different units in this global world need to collaborate and decide what values and frictions need to be preserved.

Chapter 3: The Triple Convergence

Filed under: Uncategorized — yoddha @ 2:40 pm

Friedman in this chapter tells us how ‘the Triple Convergence’ led to the today’s flat world.

Convergence 1: The first was the convergence of all ten flatteners to create a new, global and flatter playing field. Although the flattening effect started happening in the late 1890s but it was only around the year 2000 that these ten flatteners converged on such a scale that anyone could notice the change. Yes, everyone was not part of this flat world. But more people in more places were able to access this flat world.

Convergence 2: The second was merging of this new playing field with the new ways of doing business. These ten flatteners had been around for many years but the revolution required the emergence of large cadre of managers, innovators, business schools, IT specialists, and horizontal value creation processes that could take advantage of this flat world. It was then that ‘horizontalization’ started. It was then that world moved from top-down vertical collaboration to horizontal collaboration or control and command to connect and collaborate. For instance, a customer can not take advantage of a machine which combines e-mailing, scanning and printing functions unless he or she knows how to use it. That can happen only when customer and service provider collaborate horizontally.

Convergence 3: The third was the emergence of the third world country on the global stage. Now anyone from India, China and former Soviet Union can plug and play in this leveled field thus flattening the world further.

Flattener #10: “Steroids: Digital, Mobile, Personal and Virtual”

Filed under: Uncategorized — yoddha @ 8:14 am

What are these steroids? Friedman calls those things steroids that amplifies all other flatteners. These things helps do the collaboration in a way that is digital (something which can be interpreted by computer and transmitted over network), mobile (which can be done anywhere), personal (which can be done by you for you) and virtual (process of manipulating digitized content so fast that it looks automatic and easy).

Now what are these things?

  • Computing – storage capability, computational speeds, input/output capability.
  • Breakthroughs in instant messaging and file sharing. It started with Napster and today we have Kazaa and BitTorrent.
  • Breakthroughs in making phone calls over internet. VoIP.
  • Videoconferencing. Friedman tells us how HP and the DreamWorks SKG collaborated on designing a videoconferencing suite.
  • Recent advances in computer graphics driven in part by the advances in computer games.
  • Most importantly, Wireless technologies and devices.

Flattener #9: “In-forming: Web Search”

Filed under: Uncategorized — yoddha @ 8:13 am

There is no bigger flattener than making big chunk of information available to everyone, anytime and anyplace. This is why Google Search has been a huge flattener in this globalization. In-forming is about self-collaboration, becoming your own editor. In-forming is personal motive to upload, outsource, offshore, in-source and supply chain. It gives the power in the hands of an individual rather than a corporate and thus connect an individual with everyone in this world.

Today TiVo has given the power of editing to an individual. Yahoo groups help collaborate like minded people together. Google advertising ideas can help a blogger earn money. At the same time, Friedman cautions that such flattening has also breached the personal lives of people and thus needs to be balanced in the future.

Flattener #8: “Insourcing”

Filed under: Uncategorized — yoddha @ 8:01 am

Friedman, using the examples of Toshiba Laptops servicing and Papa John’s Pizzas, explains the meaning of this flattener first. Consider a small company which wants to reach its global customers but can not afford a complex global supply chain. Also consider a large company which wants to concentrate only on its core competency rather than supply chain. Such companies take the help of logistics managers such as UPS (United Parcel Service) and FedEx. This kind of third-party collaboration requires intimate association between UPS, its clients and its clients’ clients to create value for the company. In this relationship, UPS engineers analyze your company’s manufacturing and delivery processes and then redesign and manage whole supply chain.

This is a huge flattener because it makes small companies become big and thus levels the competitive field even more. Again, it helps big businesses become small by reducing the delivery and the processing time for goods. Friedman explains this collaboration again by giving example of eBay Buyer, PayPal, UPS and eBay seller.

UPS today has research division for new innovations. It has meteorologist and threat analysts to prepare the team in advance. It has a finance arm to help small business grow. It is the largest private user for Wireless technology. The evolution of ‘End of Runway Services’ (Bring the differentiating factors into the end of supply chain so that it provides full value to the customers) has played a big role in introducing this flattener.

Flattener #7: “Supply-Chaining”

Filed under: Uncategorized — yoddha @ 7:33 am

Supply Chaining is a method of collaborating horizontally – among suppliers, retailers, and customers – to create value. It is a huge flattener because as supply chains proliferate, the acceptance of standard protocols between different units increases. It helps bringing different companies to the same level.

Giving the example of the “Wal-Mart Symphony”, Friedman tells us how a company which does not produce any goods of its own has used new technologies and become the biggest retail company in the world. Any supply-chain unit has to face two major challenges – finding reliable, low cost services and predicting the customer demand in advance. Wal-Mart faces this challenge by replacing inventory with information and ensuring that with modern technology innovations, mobile and efficient communication is maintained between different parts of the supply-chain.

Latest introduction to Wal-Mart chain is RFID (Radio Frequency Identification) chips which, at any time, tells the status of the item it is attached to. It tells the expiry time, current status in the supply chain and so on.

Unfortunately, the same factors that helped Wal-Mart improve constantly got it into trouble recently. Wal-Mart’s collaboration with Chinese rather than American companies, its labor rules and other reasons have helped flattening the world but also led it into receiving end sometimes.

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