The World is Flat – Thomas Friedman Doug DerrickAaron Elkins Shaokun FanNoyan Ilk Kunpeng...
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The World is Flat – Thomas Friedman Doug Derrick Aaron Elkins Shaokun Fan Noyan Ilk Kunpeng Zhang David Zimbra
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Transcript of The World is Flat – Thomas Friedman Doug DerrickAaron Elkins Shaokun FanNoyan Ilk Kunpeng...
The World is Flat – Thomas Friedman
Doug Derrick Aaron ElkinsShaokun Fan Noyan IlkKunpeng Zhang David Zimbra
2
Agenda
IntroductionSection Reviews
Ten Flatteners – DougTriple Convergence and Sorting Out – NoyanAmerica and the Flat World – David Developing Countries – Shaokun Companies and the Flat World – KunpengGeopolitics and the Flat World – Aaron
Conclusion
3
Book Overview
“It’s not the strongest of the species that survives… nor the most intelligent… but the one most responsive to change.”
- Charles Darwin
4
When I was sleeping
Jet Blue Airlines reservations are taken by “housewives” in Salt Lake City
Order drive through food in Missouri via Colorado Call center
Your tax return is completed in India
5
SECTION 1
THE TENFLATTENERS
6
The Ten Flatteners – Number 1
11/9/89 – The New Age of CreativityFall of the Berlin WallRise of PCs and Microsoft Windows
7
The Ten Flatteners – Number 2
8/9/95 – The New Age of Connectivity Netscape goes public – A “Browser”The rise of the World Wide WebThe Internet Goes Mainstream Interoperability Fiber Optic Cable Explosion
8
The Ten Flatteners – Number 3
The New Age of Compatibility Automating work flowsStarted with PCs and emailStandardized Protocols (i.e.,
HTML, HTTP, XML, TCP/IP) Integration and CollaborationService-Oriented Architectures
9
The Ten Flatteners – Number 4
The New Age of ParticipationCommunity Generated Software
Open-SourcingCommunity Generated Answers
Blogs and forumsSelf-organizing communities A collaborative revolution
10
The Ten Flatteners – Number 5
The New Age of New ParticipantsOutsourcingPartially due to the Dot Com Boom,
Bust CycleMigrating business functionsNew players could now
participate
11
The Ten Flatteners – Number 6
The New Age of CompetitionOffshoring
Good for consumers, bad for some workers
Lions and Gazelles
China joins the WTO
12
The Ten Flatteners – Number 7
The New Age of Global Supply ChainsProducts are transformed from innovations
to commodities faster and fasterGood for consumersDrives for efficiencies
13
The Ten Flatteners – Number 8
The New Age of Supply Chain Management In-sourcingBig can act smallSmall can act big
14
The Ten Flatteners – Number 9
The New Age of Individual Information Supply Chains In-forming / Searching Knowledge available to
everyone, all the time Individual supply chains of
knowledge, entertainment, information
15
The Ten Flatteners – Number 10
Enablers of the New Age Computing and circuits get smaller File Sharing – Peer to Peer Calls over the Internet (VOIP, SKYPE) Video Conferencing Improved Computer Graphics Wireless technologies PDA, Mobile, Personal
16
SECTION 2
THE TRIPLECONVERGENCE
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How the World Became Flat
The Triple Convergence
18
Convergence of Flatteners
19
Horizontalization
Horizontal Collaboration and value-creation processes
Productivity boost from the IT revolution not too distant
20
New Playing Field
21
The Other Side
22
How the World Became Flat
The Great Sorting Out
“Some sources of friction are worth protecting, even in the face of a global economy that threatens to flatten them”
23
The Great Sorting Out
India versus Indiana
Multiple Identity Disorder
Death of the Salesman
24
SECTION 3
AMERICA AND
THE FLAT WORLD
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America and Free Trade
“America as a whole will benefit more by sticking to the general principles of free trade, than by trying to erect walls”
“Protectionism would be counterproductive, but a policy of free trade is not enough by itself”
“To maintain their living standards, Americans will have to move vertically, not horizontally”
26
Untouchables & Old Middle
The specialized Functions can never
be outsourced, automated, or traded by electronic markets
The localized Jobs must be done in
a specific location The old middle
Pressured by flatteners
27
The New Middle
CollaboratorsBetween companies, international
workforces Synthesizers
Integrating disparate fields Explainers
Simplify complex topics Leveragers
Combining technologies and people
28
The New Middle (cont.)
AdaptersVersatile, constantly learning
GreenSustainable, renewable business
Passionate personalizersAdd flavor to vanilla tasks
LocalizersAdapt global businesses to local markets
29
The Right Stuff
What is the right education to prepare for a flat world?
Learn how to learn CQ + PQ > IQ
Curiosity and passion Interacting with people Nurture the “right brain”
30
America – The Right Country
Best market for taking new ideas and turning them into products and servicesOpenness of societyPolitical stabilityQuality of intellectual property protection
Trust – essential in a world of collaborationA framework of rules and principles to
govern personal and business lives
31
The Crisis
“Post-World War II America reminds me of the classic wealthy family that by the third generation squanders its wealth”First generation:
hard working entrepreneursSecond generation:
holds it all togetherThird generation:
fat, dumb, and lazy
32
The Crisis (cont.)
Numbers gapNumber of Americans trained in science
and engineering decliningNumber of jobs requiring these skills
increasing Furthermore, number of immigrants entering
and staying in US with these skills declining
33
The Crisis (cont.)
Education gap at the topHighest goal for Americans to be doctor,
lawyer, banker – not engineer or scientistTakes hard work and perseverance
Through uninteresting subject matterWhere will innovation come from?
34
The Crisis (cont.)
Ambition gapPoorly regarded jobs in America are
coveted in India and ChinaLeisure-time societyValues upheld by parents of young children
Education gap at the bottomSchool districts were organized by wealthDisparities in funding
Poorer schools produce victims of flattening
35
The Crisis (cont.)
Funding gapGovernment funding of research stagnant or
being reducedPublications by Americans dropping steadily
Infrastructure gapBroadband technologies in America are
slow in speed and proliferation
36
This is Not a Test
Flattening requires drastic reaction from country, similar to communism in 1960’sLeadership Individual responsibilityCompassionParenting
37
This is Not a Test (cont.)
Leadership “Transformation of an enterprise begins with
a sense of crisis or urgency” “No institution will go through fundamental
change unless it believes it is in trouble and must do something different to survive”
“We need politicians who are willing and able to explain and inspire”
American politicians: lawyers, not scientists
38
This is Not a Test (cont.)
Individual responsibilityManage own career, risks, and economic
securityGovernment and businesses
Provide individuals opportunities to do thatFlexibility: portable benefits, lifelong learningUpgrade entire workforce level of education
Import and retain foreign talent
39
This is Not a Test (cont.)
CompassionThe balance of power between companies
and individual communities is tilting in the favor of the companies
Compassionate flatismUnemployment insurance for those
displaced by flattening
40
This is Not a Test (cont.)
Parenting “We need a new generation of
parents to administer tough love” Put away the video games,
television, Ipod, and get to work
Parents must lead by example
41
SECTION 4
DEVELOPING COUNTRIES
AND
THE FLAT WORLD
42
The Virgin of Guadalupe
Developing countries in the flat world: The Virgin of Guadalupe were being imported into Mexico
from China. Plastic Ramadan lanterns in Egypt are also made in China
43
Introspection
When developing countries start thinking about the challenge of flatism, the first thing they need to do is engage in some brutally honest introspection.
44
Reform Wholesale
Broad macroeconomic reform
Initiated by a small handful of leaders in countries (China, Russia, Mexico, Brazil, and India)
Push counties into more export-oriented, free-market strategies-base on privatization of state companies
45
Reform wholesale
More open and competitive markets are the only sustainable vehicle for growing a nation out of poverty Decisions to open the Mexican economy
"To get rich is glorious,“---Deng Xiaoping
India's finance minister, Manmohan Singh, opened India's economy
46
Reform Wholesale
As the world started to get smaller and flatter, reform wholesale was no longer sufficient to keep countries on a sustainable growth path
A deeper process of reform was required-a process called reform retail
47
Reform Retail
Every region of the world has its strengths and weaknesses, and all are in need of reform retail to some degree
Reform retail requires a much wider base of public
It involves looking at four key aspects of your society: Infrastructure Regulatory institutions Education Culture
48
Reform Retail
Five-step checklist for reform retail: Simplify and deregulate wherever possible in competitive
markets
Focus on enhancing property rights
Expand the use of the Internet for regulation fulfillment
Reduce court involvement in business matters
Make reform a continuous process
49
Culture Matters: Glocalization
Two aspects of culture are particularly relevant in the flat world:To what degree is it open to foreign
influences and ideas.
How inward the culture is
50
Culture Matters: Glocalization
Exclusivity is a dangerous thing. (Former Chinese emperor)
Culture can change. It is a product of the context-geography, education level, leadership, and historical experience-of any society
51
The Intangible Things
Why does one country's skyline change overnight and another's doesn't change over half a century?------intangible things
China MexicoThousands of miles away
Burdened by overpopulation
Few natural resources
Burdensome debt legcy
Right next door to America
Free-trade agreement
Valuable natural resource
52
The Intangible Things
Qualities of intangible things: A society's ability and willingness to pull together
and sacrifice for the sake of economic development
The presence in a society of leaders with the vision to see what needs to be done in terms of development and the willingness to use power to push for change rather than to enrich themselves and preserve the status quo
How much your culture prizes education
53
SECTION 5
COMPANIES AND
THE FLAT WORLD
54
How Companies Cope
If you want to grow and flourish in a flat world, you better learn how to change and align yourself with it
Rules and Strategies
55
Rule #1:Reach for shovel and dig inside yourself.
Competition is everywhere and the way is changing
Facing challenge brought by competition
your personality and
creative flair
56
Rule #2: The small shall act big
The key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster, wider, and deeper
57
Rule #2: The small shall act big
How could the small move to big so quickly?Software and industrial engineersNot stuck with any “legacy” system (web)
58
Rule #3: The big shall act small
One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big
59
Rule #3: The big shall act small
What the company should do is to create a digital buffet to serve consumers (“self-directed”)
60
Rule #4: The best companies are the best collaborators
The next layer of value creation are becoming so complex that no single firm is going to be able to master them alone
61
Rule #4: The best companies are the best collaborators
Combining more granular specialties to come up with valuable breakthrough
Case: “Rolls-Royce”
62
Rule #5: Getting regular chest X-rays and selling the results
X-ray your company and break down every component to identify “hot spots”
Keeping core competency and outsourcing the things that no longer made sense to do itself
63
Rule #6: The best companies outsource to win, not to shrink
They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and
hire more and different
specialists – not to save
money by firing more
people
64
Rule #6: The best companies outsource to win, not to shrink
Two things to be doneDefending and extending core business and
continue to take care of customers;Making a giant leap to offer customers what
they are seeking for next.Using outsourcing is not defense but
playing offense
65
SECTION 6
GEOPOLITICS AND
THE FLAT WORLD
66
Geopolitics and the Flat World
The Unflat WorldToo SickDisempoweredToo FrustratedToo Many Toyotas
Globalization of the Local
The Dell Theory of Conflict Prevention Infosys Versus Al-Qaeda
66
67
The Unflat World
The world isn’t flat!Middle class is a state of mindA flat world presupposes a similar
state of mind
67
6868Based on data from UNAIDS
AIDS Pandemic
69
Too Sick
Who cares about the flat world when 50% have AIDS?
The next grand challengePandemics in the flat world
69
70
Disempowered
No access to the flat worldLocal governanceModern antiglobalismPrivate industry
70
71
Too Frustrated
The flat world’s polarizing effectHumiliation breeds terrorismIntractable dilemma?Will it get better?What is the answer?
71
72
Too Many Toyotas
What if the rest of the world becomes flat?
Struggle over natural resourcesThe US must lead embracing
alternative energy
72
73
Globalization for the Local
Globalization = Americanization?Globalizing in reverseIt’s not all economicThe dark side
73
74
The Dell Theory of Conflict Prevention
The golden arches theoryGlobal supply chains and geopolitical
adventurismChina v. TaiwanIndia v. Pakistan
74
75
Infosys Versus Al-Qaeda
Non-state actorsVirtual Caliphate understand the flat
world as well as Dell and InfosysSuicide Supply Chains
75
Nuclear threat to the flat world
76
CONCLUSION
CONCLUSION
77
Conclusion
The flattening of the world has presented us with new opportunities, new challenges,
new partners but also new frustrations.
78
Conclusion
“Even if you're on the right track, you'll get run over if you just sit there.”
-----Will Rogers
