Friday, May 13, 2005

Keynote - Thomas L. Friedman, NY Time

A brief profile of Tom

A very interesting talk that kind of summarized his most recent best seller

Tom gave a bit of a background about how he came about writing this book. His earlier book called the Lexus and the Olive tree mirrored his interests and hence his column on the NY Times. He would sometimes write about the Lexus issues (economic) and sometimes about the Olive Tree issues (Geo-political). Then 9-11 happened. For the next 3 years he spent all his time reporting from Kabul and reporting from Bagdad. Till the U.S. Presidential election when John Kerry's statement put the spotlight on outsourcing. His editors suggested that possibly it was time that he did a documentary on the same and so he set out to travel to India to meet up with the outsourcing gurus. In India he went from city to city meeting passionate entrepreneurs who were building outsourcing businesses and saw the extent to which services were being delivered from India. He realised that while he has been sleeping (in Bagdad and in Kabul), the world as he knew it had changed significantly. While interviewing Nandan Nilekani in the run up to the interview Nandan said something simple - "Tom, the economic playing field among nations is being levelled and America is not prepared." This was the trigger and he felt ok - you have christopher columbus who left spain and set sail west to discover india and ended up finding america and realising the world is round, I've left america flown east to find India and here someone is telling me the world is actually flat!!

Why does Tom feel the world is flat? The word flat is actually more a symbol that in todays connected world, India, U.S. , China and Dubai are really next door neighbours. The distance between San Jose and Bangalore is the same as that between San Jose and Boston. This new world of globalization is giving rise to new challenges and we need to be prepared. While in the 60s and 70s parents used to tell their kids
"Son, you need to eat your dinner as children in India and china are starving" today they need to tell their children
"Son, you need to do your homework as children in India and china are doing theirs"

Whats differnt with the present wave of globalization as compared to the waves earlier?

to put it in short while
Globalization 1.0 was globalization of countries by conquests and imperialism
Globalization 2.0 was globalization of companies by the creation of multi-nationals
Globalization 3.0 is actually the globalization of the individual leaving them free to compete equally for jobs, business and services.

Tom drew on a few dates which were instrumental in the creation of the present globalization convergence. He called them the great flatteners - which drove the world from a round one to a flat one:-
1. 9th November - the fall of the berlin wall and the consequent shipping of windows soon after
2. 9th August 95 - the day Netscape went public and as the stock soared investors worldwide decided to take the less risky route and invest in underlying infrastructure leading them to invest in miles and miles of fiber optic cable under seas, underground and criss crossing the world.
3. The invention of workflow - while earlier different departments functioned in isolation, workflow let them connect with each other thus standardizing processes and actions.
4. Y2K - The first big impetus to Outsourcing. A task that was so humongous that work had to be outsourced breaking the mindset and giving many companies business for the first time.
5. Offshoring - China joins the WTO
6. Open Sourcing - Anyone anywhere can have access to software - it was no longer expensive or more affordable in the u.s. Free was free anywhere.
7. Supply Chaining
8. Insourcing - Gave a very interesting example of UPS. It seems that if you have a toshiba laptop you call the number on the laptop in case it gets spoilt, a UPS person comes and picks it up from you, its flown to a UPS hangar where UPS staff fix it and return it back to you. Toshiba never sees it!!
9. The Steroids - VoIP, Wireless, File Sharing which were turbocharging all the factors above.

Surprisingly all the flatteners converged with another phenomenon

While the developed world was still in a state of denial without knowledge and acceptance of the fact that the world was now flat, 3bn people from India, China and the erstwhile USSR had now been unleashed on this flat world. These people who had been restrained by visas, persecution from participating in the global economy now could compete with Sally from saratoga for her Job!!

A very insightful speech and really brings to mind the challenges facing the american and developed world economy.

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