This spring I enjoyed very much the reading
of Thomas Friedman’s book, The World Is Flat.
As those of you who read The New York Times
know, he is one of the distinguished Op-Ed
writers. He is a foreign affairs columnist for the
Times and his premise in writing this book is that
we live in a very different world as a result of
globalization, the convergence of new technologies,
and dramatic changes in the political and economic
landscape. As a result of these, competition is no
longer based on who can get the job done or even
who is willing to do it the cheapest. The fall of
the Berlin Wall; change in economic policies in
Asia; Netscape; Google; massive overcapacity,
particularly in our fiber optic systems; and
collaboration enhancing software have created a
very different world where high-quality work is
being done essentially everywhere.
The flattening then, in my own interpretation of
his work, has had a profound impact on the way we
conduct our international business affairs.
Outsourcing, in-sourcing, the juggling of trade
deficits, and offshore economic arrangements have
each resulted in new constructs in the relationships
between business, government, and educational entities
throughout the world. I like the one example that he
gave about Dell Computer, which is currently the world’s
largest computer company, to illustrate his principle.
Dell sells between 140,000 and 150,000 computers each day, and the success of the company depends on worldwide transactions and delivery routes, but there is more to it than that. Research teams in Texas and Taiwan collaborate instantaneously on the design of new products and modifications of existing products. Ten countries, notably China, Malaysia, Korea, Japan, and Taiwan, produce the individual components. Product quotas, production quotas, quality control, and on-time delivery with virtually no inventories are characteristic of the business model.