Globalisation in the 21st century in “The World is Flat”
Thomas Friedman in his recent book ‘The world is flat’ discusses a short history of globalisation in the twenty-first century. His discovering journey took him around the world to investigate the new concept in transnational business. He views himself as Columbus-like, but in a new modern word, in which he is searching for the sources of today’s wealth. Only to come to a rhetorical conclusion that the world is “flat” not round!
His book, ‘The world is flat’ has been a subject to much criticism. His work was highly criticizes by Aronica and Ramdoo, (2006) in their book ‘The World is Flat? A Critical Analysis of Thomas Friedman’s New York Times Bestseller’. They point to the fact that Friedman does not use a single table or data footnote in his book. Friedman makes arguments by assertion, based on not documented facts, but makes his assumption based on stories from his journey around the world, visiting few places, and selected CEOs he visits on his journey.(Aronica & Ramdoo, 2006)
Friedman in a research for his book visits India, where Nandan, the CEO of Infosys explains to him that; “the playing field is being leveled” causing Friedman to conclude that the world is flat. (Friedman, 2006 p.7) Friedman refers to a “flat world” in a metaphorical sense. He reiterates over and over again that “The world is flat”. In which he means that reducing barriers in trade and political and technical advances have made it possible to do business, instantly with any other businesses around the world, without the need to emigrate. It has allowed for parts of the world, which had previously been disconnected, like India and China, to compete in the world market. And that we are now connecting all the knowledge and expertise, using computers, email, fibre-optic networks and so on.
Friedman argues that there are ten major forces that flattened the world, and describes each of the following “flatteners”. The fall of the Berlin Wall; or the work flow software; uploading; outsoursing; offshoring; insourcing; in-forming; and lastly he talks about steroids. Next Friedman delve into what he describes that the forces of flatness have resulted in “the triple convergence,” three additional components that acted on the flatteners to create a new, flatter global playing field.
Friedman also states that “technology has made the world flat by removing geographical, hierarchical and other boundaries to trade”. In a flat world, Friedman writes, “you can innovate without having to emigrate. Yet, there are still many people in rural areas that have been left out and neglected of this global integration. People are migrating from rural areas to the big cities in search of jobs all the time, and this is what Friedman calls a ‘flat world’?
Richard Florida,(2005) in his article ‘The World is spiky’ argues that “the globalisation has changed the playing field but it has not leveled it.”, Richard talks about “uneven distribution of the world’s population, light emissions, focusing on ‘peaks’ as of the cities that drive the world economy, and ‘valleys’ – places with little connection to the global economy.” Both authors seems to be right, but they both missing the point, using misleading metaphors.
The paradox of these two metaphors is that the flattening of the world is creating a new prospect for even greater spikiness. Some would argue that it does not matter whether the world is spiky or flat. What does matter is where you live. Now, people have to compete and work harder than ever before. People in American are losing their jobs because someone on the other side of the world can do it faster and for less money.
Technology makes it all more possible today to bring the world closer and make it more interconnected and interdependent.(Friedman, 2006) However, technological innovation by itself will never flatten the world, instead it tends to create inequalities by being inaccessible to less fortunate. Leamer (2007) in his critical review demonstrate that the technological revolution, economic integration and interaction increase the openness of trade and promote the production and transmission of information and knowledge in general. However, it is possible that increasing economic integration can lead to spatial agglomeration of economic activity rather than to a geographically ‘flatten pattern”.
Process of globalization may as well wipe out space and distance between countries, then again, some will argue that in a global economy, competitive advantages are often heavily localized, arising from concentrations of highly specialised skills, knowledge and institutions.
Friedman argues, that the world is getting flatter, incomes though, are not. Distribution of incomes within countries and between countries is growing greater. Nevertheless, all these arguments show that the world is not flat, never was and is not likely going to be in the near future.
In second chapter, Friedman describes than Netscape went public and how Internet and World Wide Web came along and enabled more people to communicate and interact with more people anywhere on the planet, causing the Earth to flatten even more. In 2007 Foreign Policy magazine article, Pankaj Ghemawa, argued that ninety percent of the world’s web traffic, investments and phone calls are local, suggesting that Friedman has overstated the significance of the trends he describes. (Ghemawat, P. 2007).
Friedman talks about ‘outsourcing’ of manufacturing and other processes to a foreign country to take advantage of less-costly labour. Outsourcing may indeed be good for the multinational corporations to stay competitive and survive, however, Arnica and Ramdoo (2006) in their book argue that, Friedman discuss in a favor of global corporations moving their operations overseas to exploit weak governments and cheap labor.
Global corporations are not invested in the well-being of American workers and their local communities. Instead they go wherever they can to exploit cheap labor, lax environmental regulations and tax breaks. Stiglitz (2006) in his book points out that, the policy frameworks and laws are manipulated to be best suited for the industrial elites. Moving operations overseas is “cost cutting” to improve the financial performance of big corporations, without loyalty to one’s country. Their only loyalty is to increased profits and increased salaries of their directors.
As a result of outsourcing, Many of American citizens, according to Friedman, are now worried about their careers, because some of the jobs they used to hold are now being performed outside the country for a much lower cost to their former companies. The reason behind the outsourcing is simply the cost. Indian workers can work for far less then American. The question is what will be the outcome of shipping all these jobs overseas? Some will argue that outsourcing less skilled work to emerging economies will raise living standards around the world. Workers in developing nations will get new and higher- paying jobs, and consumers in the U.S will be able to buy products that are cheaper than if they were made at home. Leamer (2007) argues that “it makes both parties worse off” saying “we get their wages and they get our culture.
Outsourcing is occurring at a breathtaking pace, and as a result America is facing a big challenge because their jobs are at risk. Business services and finance is now at risk of being outsourced. And in the near future accounts, marketing and sales, and even human recourses will be shipped overseas in the name of cost saving. We are not only outsourcing business processes, but also moving process of innovations. Overall, this is good for global economy, but the U.S. workforce will face drastic career changes and pressures on wages subject to competition from foreign labor. Thus, what is good for some might not be good for others.
Another example given by Mr. Friedman that stroked me is how Southwest Airlines let you issue your own boarding pass online twenty-four hours before the flight. What if you forget to print out your ticket? This is just a simple demonstration of declining quality of services a customer receives in a flatten world.
I would argue that while the flat world has done extremely well for many industries and people around the world, Friedman but does not realized that the more flatten world brings many dark sides of globalisation along with it. The global financial system is more unbalanced, the threats of climate change are stronger and there is more international terrorism. The Friedman is reinforcing a wrong message to its audience for peace, loyalty and prosperity.
Thomas Friedman points out that different parts of the world are now more connected because convergence of technology, information systems and telecommunications systems that created a ‘global platform’ is shrinking the world, and enabling each of us to reach around the world faster and cheaper than ever before!
Yes, there have been some dramatic changes and transformation in the world economy, and we are now more connected than ever before, however the world is not flat. (Stiglitz, 2006). Stiglitz in his book ‘Making globalization work’ (2006) touches various aspects of globalization that is destroying the developing countries and their aspirations to provide a decent living to their citizens. He talks about egotistic intellectual property laws, the unfair trade mechanisms and many more critical points to complete success of globalization. Mr Friedman appreciates the existence of global poverty but fails to explain its structural and geopolitical causes.