The World is Flat: Chapter 3,4
Summary of Chapter Three: The Triple Convergence
The ten flatteners had been around since the 1990s, but around 2000, technologies began to converge in their usage, creating a more horizontal means of creating value, as they connected to one another. Friedman calls the first result, convergence #1, a global platform for collaboration. The new platform alone cannot change things, however. Horizontal platforms mean manufacture has to be redesigned. Management has to be redesigned. Globalization 3.0 with the ten flatteners plus PCs, fiber optics, and work-flow software on Internet, mean a shift from top-down thinking. Value is not created from vertical flow but horizontal flow. This is convergence #2. Now, in the free-market game people from China, India, Russia, East Europe, Latin America, and Central Asia can play without leaving home. There are three billion new players in the game, who had been shut out before. This is convergence #3.
Friedman says that he and most Americans missed these important events because there was another triple convergence that caused a smoke screen to divert attention. The dot-com bubble, 9/11, and the Enron corporate scandal grabbed media attention. American politicians used these negative events, says Friedman, to make the public stupid instead of educating it to what was really going on in the world. The global triple convergence he outlines was far more important than local scandal.
Commentary on Chapter Three: The Triple Convergence
Friedman names a number of convergences in technology. In Chapter One the triple convergence was PCs, fiber-optic cable, and work-flow software. Here he expands on those implications, showing that these breakthroughs led to another triple convergence he calls a global platform for work, horizontal reorganization, and new players in the game. These developments seem to have caught people by surprise because they were not always getting the right updates from the news.
The three smoke screens played up in the media in the last decade or so scared people into wanting to be conservative and thinking they could retreat to the past. The first was the over-investment in fiber-optic cable that led to a market crash on tech start-up companies in the 1990s, making the public less excited about technological innovation as a source of wealth. The terrorist attacks by al-Qaeda inside the United States on 9/11/ 2001 made Americans want to close their borders and keep everyone out. The Enron scandal in 2001 unmasked corporate corruption and dysfunction hidden by dishonest accounting methods. Enron, a large energy company in Houston, Texas, and Arthur Andersen Accounting both went bankrupt and disappeared overnight. Millions of investors, including people with pensions, lost their savings. This led to a lack of confidence in a deregulated market that seemed to favor greedy corporations.
Summary of Chapter Four: The Great Sorting Out
Society is starting to experience “the great sorting out” (p. 254) as the world goes from vertical command-and-control to horizontal connect-and-collaborate functioning. Friedman shows that this process has been a long one ever since Karl Marx started talking about it in The Communist Manifesto in 1848 when he predicted that capitalism and its technological inventions would flatten the earth and eliminate distinctions between countries (a necessary prelude to communism, he thought). Friedman thinks what will rise in the world will be blended models that include nations, corporations, individuals and computer networks. In the new world, the definition of exploiter and exploited gets tricky, since America's use of cheaper engineers in China and India is also a form of empowerment and rise of the middle class in those countries. It is also not clear where a company starts and stops because pieces of a product are made all over the world and then assembled. Dell, for instance, is in Malaysia, Taiwan, China, Ireland, India, and the United States.
Commentary on Chapter Four: The Great Sorting Out
Friedman brings up some issues associated with the sorting out going on in Globalization 3.0. The old walls, distinctions, and categories are disappearing. Job distinctions are lost, for instance, when executives no longer need secretaries or research assistants. They write their own e-mails and do their own searches. Another question involves the ownership of intellectual property. What is collaboration and what is theft? Patent law that favors individual inventions will have to address cross-licensing, such as with computer parts. The law also has to take into consideration open-source inventions. Selling has changed with less face-to-face contact, and the middle man has been largely removed. Friedman brings up changing aspects that everyone has become aware of with the global network but that have not been completely assimilated or thought through.