Ten Forces that flattened the world from The World Is Flat by Thomas Friedman

1. 11/9/89: When the walls came down and the windows went up The fall of the Berlin Wall on 11/9/89 unleashed forces that ultimately liberated all the captive people of the Soviet Empire. But it actually did so much more. It tipped the balance of power across the world toward those advocating democratic, consensual, freemarket-oriented governance, and away from those advocating authoritarian rule with centrally planned economies. (Friedman, p. 49) The first IBM PC hit the markets in 1981. At the same time, many computer scientists around the world had started using these things called the Internet and email. The first version of the Windows operating system shipped in 1985, and the real breakthrough version that made PCs truly user-friendly Windows 3.-0- shipped on May 22, 1990, only six months after the wall went down. In this same time period, some people other than scientists started to discover that if they bought a PC and a dial- up modem, they could connect their PCs to their telephones and send emails through private Internet service provider- like CompuServe and America Online. The diffusion of personal computers, fax machines, Windows, and dial- up modems connected to a global telephone network all came together in the late 1980s and early 1990s to create the basic platform that started the global information revolution, argued Craig J. Mundie, the chief technolo gy officer for Microsoft. The key was the melding of them all together into a single interoperable system. That happened, said Mundie, once we had in crude form a standardized computing platform- the IBM PC- along with a standardized graphic user interface for word processing and spreadsheets- Windowsalong with a standardized tool for communication- dial- up modems and the global phone networks. Once we had that basic interoperable platform, then the killer application drove its diffusion far and wide. People found that they really liked doing all these things on a computer, and they really improved productivity, said Mundie. They all had broad individual appeal and made individual people get up and buy a Windows-enabled PC and put it on their desk, and that forced the diffusion of this new platform into the world of corporate computing even more. People said, Wow, there is an asset here, and we should take advantage of it. The more established Windows became as the primary operating system, added Mundie, the more programmers went out and wrote applications for rich-world business tasks to put on their computers, so they could do lots of new and different business tasks, which started to enhance productivity even more. Tens of millions of people around the world became programmers to make the PC do whatever they wanted in their own languages. Windows was eventually translated into thirty-eight languages. People were able to become familiar with the PC in their own languages. (Friedman, pp. 53-54)

2. 8/9/95: When Netscape went public What was it that stimulated investors to believe that demand for Internet usage and Internet-related products wo uld be infinite? The short answer is digitization. Once the PC-Windows revolution demonstrated to everyone the value of being able to distill information and manipulate it on computers and word processors, and once the browser brought the Internet alive and made Web pages sing and dances and display, everyone wanted everyt hing digitized as much as possible so they could send it to someone else down the Internet pipes. Thus began the digitization revolution. Digitization is that magic process by which words, music, data, films, files, and pictures are turned into bits and bytes- combinations of 1s and 0s- that can be manipulated on a computer screen, stored on a microprocessor, or transmitted over satellites and fiber optic lines. It used to be the post office was where I went to send my mail, but once the Internet came alive, I wanted my mail digitized so I could email it. Photography used to be a cumbersome process involving film coated with silver dug up from mines halfway across the world. I used to take some pictures with my camera, and then bring the film to the drugstore to be sent off to a big plant somewhere for processing. But once the Internet made it possible to send pictures around the world, attached to or in emails, I didnt want to use silver film anymore. I wanted to take pictures in the digital format, which could be uploaded, not developed. (And by the way, I didnt want to be confined to using a camera to take them. I wanted to be able to use my cell phone to do it.) I used to have to go to Barnes & Noble to buy and browse books, but once the Intent came alive, I wanted to browse for books digitally on Amzaon.com as well. I used to go to the library to do research, but now I wanted to do it digitally through Google or Yahoo!, not just by roaming the stacks. I used to buy a CD to listen to Simon and Garfunkel. CDs had already replaced albums as a form of digitized music- but once the Internet came alive, I wanted those music bites to be even more malleable and mobile. I wanted to be able to download them into an iPod. In recent years the digitization technology evolved so I could do just that. (Friedman, p 65) 3. Workflow Software: lets do lunch have your application talk to my application The vast network of underground plumbing that made it possible for all this work to flow has become quite extensive. It includes all the Internet protocols of the previous era, like TCP/IP and others, which made browsing and email and Web sites possible. It includes new tools, like XML and SOAP, which enabled Web applications to communicate with each other more seamlessly, and it includes software agents known as middleware, which serves as an intermediary between wildly diverse applications. The nexus of these technologies has been a huge boon to innovation and a huge reducer of friction between companies and applications. Instead of everyone trying to control the fire hydrant nozzle, they made all the nozzles and hoses the same, creating a much bigger market that stretched across every ne ighborhood of the world. Then companies started to compete instead over the quality of the hose, the pump, and the fire truck. That is, they competed over who could make the most useful and nifty application. Said Joel Cawley, the head of IBMs strategic planning unit, Standards dont eliminate innovation, they

just allow you to focus it. They allow you to focus on where the real value lies, which is usually everything you can add above and around the standard. (Friedman, p. 76) 4. Open sourcing: self-organizing collaborative communities My parents met at IBM in Southern California, and I grew up in a town jus t north of Pasadena, La Canada, Behlendorf recalled. The public school was very competitive academically, because of lot of the kids parents worked at the Jet Propulsion Laboratory that was run by Caltech there. So from a very early age I was around a lot of science in a place where it was okay to be kind of geeky. We always had computers around the house. We used to use punch cards from the original IBM mainframes for making shopping list. In grade school, I started doing some basic programming, and by high school I was pretty into computersI graduated in 1991, but in 1989, in the early days of the Internet, a friend gave me a copy of a program he had downloaded onto a floppy disk, called Fractint. It was not pirated, but was freeware, produced by a group of programmers, and was a program for drawing fractals. [Fractals are beautiful images produced at the intersection of art and math.] When the program started up, the screen would show this scrolling list of email addresses for all the scientists and mathematicians who contributed to it. I noticed that the source code was included with the program. This was my first exposure to the concept of open-source. Here was this program that you just downloaded for free, and they even gave you the source code with it, and it was done by a community of people. It starts to print a different picture of programming in my mind. I started to think that there were some interesting social dynamics to the way certain kinds of software were written or could be written- as opposed to the kind of image I had of the professional software developer in the back office tending to the mainframe, feeding into it and taking it out for the business. That seemed to me to be just one step above accounting and not very exc iting. (Friedman, p. 85) My bottom line is this : Open-source is an important flattener because it makes available for free many tools, from software to encyclopedias, that millions of people around the world would have had to buy in order to use, and because open-source network associations- with their open borders and come-one-come-all approach- can challenge hierarchical structures with a horizontal model of innovatio n that is clearly working in a growing number of areas. Apache and Linux have each helped to drive down costs of computing and Internet usage in way that are profoundly flattening. This movement is not going away. Indeed, it may just be getting started- with a huge, growing appetite that could apply to many industries. As The Economist mused (June 19, 2004), some zealots even argue that the open-source approach represents a new, post-capitalist model of production. (Friedman, pp. 102-103) 5. Outsourcing: Y2K This computer remediation work was a vague, tedious job. Who in the world had enough software engineers to do it all? Answer: India, with all the techies from all those IITs and private technical colleges and computer schools.

And with Y2K bearing down on us, America and India started dating, and that relationship became a huge flattener, because it demonstrated to so many different businesses that the combination of the PC, the Internet, and fiber-optic cable had created the possibility of a whole new form of collaboration and horizontal value creation: outsourcing. Any service call center, business support operation, or knowledge work that could be digitized could be sourced globally to the cheapest, smartest, or most efficient provider. Using fiber-optic cable connected workstations, Indian techies could get under the hood of your companys computers and do all the adjustments, even though they were located halfway around the world. [Y2K upgrading] was tedious work that was not going to give them an enormous competitive advantage, said Vivek Paul, the Wipro executive whose company did some outsourced Y2K drudge work. So all these Western companies were incredibly challenged to find someone else who would do it and do it for as little money as possible. They said, We just want to get past the damn year 2001. So they started to work with Indian [technology] companies who they might not have worked with otherwise. (Friedman, p. 109) 6. Offshoring: running with gazelles, eating with lions Chinas real long-term strategy is to outrace American and the E.U. countries to the top, and the Chinese are off to a good start. Chinas leaders are much more focused than many of their Western counterparts on how to train their young people in the math, science, and computer skills required for success in the flat worlds, how to build a physical and telecom infrastructure that will allow Chinese people to plug and play faster and easier than others, and how to create incentives that will attract global investors. What Chinas leaders really want is the next generation of underwear or airplane wings to be designed in China as well. That is where things are heading in another decade. So in thirty years we will have gone from sold in China to made in China to designed in China to dreamed up in China or from China as collaborator with the worldwide manufactured on nothing to China as a low cost, high quality, hyper efficient collaborator with worldwide manufacturers on everything. This should allow China to maintain its role as a major flattening force, provided that political instability does not disrupt the process. (Friedman, p.119) 7. Supply-chaining: eating sushi in Arkansas Just one company, Hewlett-Packard, will sell four hundred thousand computers through the four thousand Wal-Mart stores worldwide in one day during the Christmas season, which will require HP to adjust its supply chain, to make sure that all of its standards interface with Wal-Marts, so that these computers flow smoothly into the WalMart river, into Wal-Mart streams, into the Wal-Mart stores. Wal-Marts ability to bring off this symphony on a global scale moving 2.3 billion general merchandise cartons a year down its supply chain into its stores- has made it the most important example of the next great flattener I want to discuss, which I call supply-

chaining. Supply-chaining is a method of collaborating horizontally- among suppliers, retailers, and customers- to create value. Supply-chaining is both enabled by the flattening of the world and a hugely important flattener itself, because the more these supply chains, grow and proliferate, the more they force the adoption of common standards between companies (so that every line of every supply chain can interface with the next), the more they eliminate points of friction at borders, the more the efficiencies, of one company get adopted by the others, and the more they encourage global collaboration. (Friedman, p. 129) 8. In-sourcing: what the guys in funny brown shirts are really doing UPS maintains a think tank, the Operations Research Division, in Timonium, Maryland, which works on supply-chain algorithms. This school of mathematics is called package flow technology, and it is designed to constantly map the deployment of UPS trucks, ships, airplanes, and sorting capabilities with that days flow of packages around the world. Now we can make changes in our network in hours to adjust to changes in volume, say UPS CEO Eskew. How I optimize the total supply chain is the key to the math. The sixty-person UPS team in Timonium made up largely of people with engineering and math degrees, including several Ph.D.s. (Friedman, p.147) 9. Informing: Google, Yahoo!, MSN Web Search Said Google cofounder Russian-born Sergey Brin, If someone has broadband, dial- up, or access to an Internet caf, whether a kid in Cambodia, the university professor, or me who runs this search engine, all have the same basic access to overall research information that anyone has. It is a total equalizer. This is very different than how I grew up. My best access was some library, and it did not have all that much stuff, and you either had to hope for a miracle or search for something very simple or something very recent. Whe n Google came a long, he added, suddenly that kid had universal access to the information in libraries all over the world. (Friedman, p.152) Who does searching fit into the concept of collaboration? I call it in- forming. Informing is the individuals personal analog to open sourcing, outsourcing, in sourcing, supply-chaining, and off shoring. In- forming is the ability to build and deploy your own personal supply chain- a supply chain of information, knowledge, and entertainment, without having to go to the library or the movie theater or through network television. In- forming is searching for knowledge. It is about seeking like- minded people and communities. Googles phenomenal global popularity, which has spurred Yahoo! and Microsoft (through its new MSN search) also to make power searching and in- forming prominent features of their Web sites, show how hungry people are for this form of collaboration. Google is now processing roughly one billion searches per day, up from 150 million just three years ago. (Friedman, p. 153) 10. The Steroids: digital, mobile, personal, and virtual (wireless being the icing on the cake)

For instance, MIPS stands for millions of instructions per second, and it is one measures of the computational capability of a computers microchips. In 1971, the Intel 4004 microprocessor produced .06 MIPS, or 60,000 instructions per second. Todays Intel Pentium 4 Extreme Edition has a theoretical maximum of 10.8 billion instructions per second. In 1967, the Intel 4004 microprocessor contained 2,300 trans istors. Todays Itanium 2 packs 410 million transistors. Meanwhile, inputting and outputting data have leaped ahead at a staggering rate. At the speeds that disk drives operated back in the early days of 286 and 386 chips, it would have taken about a minute to download a single photo from my latest digital camera. Today I can do that in less than a second on a USB 2.0 disk drive and a Pentium processor. The amount of stuff you can now store to input and output is off the charts, thanks to the steady advances in storage devices, said Craig Mundie, Microsofts chief technology officer. Storage is growing exponentially, and this is really as much a factor in the revolution as anyt hing else. Its what is allowing all forms of content to become digital and to some extent portable. It is also becoming cheap enough that you can put massive amounts on even the personal devices people carry around with them. Five years ago, no one would have believed that you would be able to sell iPods with 40 gigabytes of storage, capable of holding thousands of songs, for prices that teenagers could afford. Now its seen as ho-hum. (Friedman, p. 163)