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Director's Column


"The World is Flat"

By Alan Hall, Director, PLSJ
Publish Date - Sunday, October 09, 2005

"The World is Flat," sounds like a book title for something written in the 12th Century before Christopher Columbus sailed the "ocean blue in 1492." It is actually the title of a new book written by Thomas L. Friedman, the foreign affairs columnist for the New York Times.

The premise for his book came from a journey he made to Bangalore, India.  That is India's center of technology, and he was there to find out how they  are taking American jobs. Friedman writes, "Columbus accidentally ran into America but thought he had discovered part of India." "I actually found India and thought many of the people were Americans."At the call centers, many of the workers had taken American names and had been trained in doing imitations of American accents. From this experience, he told his wife "I think the world is flat," the basis for the title for his book. Computer software and communications system has made the world flat.  The location of much of the world's work no longer makes a difference.

The author was intrigued at the work being done in India.  This year, some  400,000 tax returns for Americans will be done in India, outsourced by American tax-preparing firms. Investment research and journalism research are being done in India at a lower cost.

Friedman spent an evening in a call center in India, and witnessed 2,500 employees handling a myriad of calls from America and other industrialized countries. He saw operators selling credit cards, tracing lost airline luggage, fixing computer problems, answering calls for a bank, and being a travel agent. There are an estimated 245,000 people employed in India at call centers.

Friedman says that there are ten forces that "flattened the world."

On November 9, 1989, the Berlin Wall came down, liberating the peoples of the Soviet Empire into a free marketplace.

On August 9, 1995, Netscape went public and the web browser was born.

The third event is not a date; it is the development of software that allows the workflow to be independent of a place to make the product.

Open sourcing made software available to anyone for use, which formerly had to be developed by traditional corporate structure.

Outsourcing followed the dot com bust, and combined with the Y2K need to upgrade computers and networks brought the industrialized countries of the world together searching for inexpensive ways to fix the problem.

Another product of the technology age is Offshoring, where a specific and limited function of a company is performed by another company, then reintegrated back into the overall operation.

Supply chaining is the elimination of warehouses to keep a steady stream of products arriving at the sales end for public consumption, the seventh force in the economic world.

Insourcing is where a delivery company picks up a package, and in addition to moving it; they repair it for another company.

In-forming is the access to information from all over the world, and Google is the master of this domain.  The goal is to have equal access to information wherever in the world you are physically located.

The final force according to Friedman is information access tools, from laptops with wireless connections to the various handheld devices for information connection.

Friedman's 500-page book also tells how many entrepreneurs are using today's technology to develop new products and ways of doing business in the 21st
Century. He states that business in our world today is based on the fact that things can be better, and people who act on that imagination every day.