Thomas Friedman - The World is Flat

I stomped off, went through security, bought a Cinnabon, and glumly sat at the back of the B line, waiting to be herded on board so I could hunt for space in the overhead bins. Forty minutes later, the flight was called. From the B line, I enviously watched all the As file on board ahead of me, with a certain barely detectable air of superiority. And then I saw it.

Many of the people in the A line didn't have normal e-tickets like mine. They were just carrying what looked to me like crumpled pieces of white printer paper, but they weren't blank. They had boarding passes and bar codes printed on them, as if the As had downloaded their boarding passes off the Internet at home and printed them out on their home printers. Which, I quickly learned, was exactly what they had done. I didn't know it, but Southwest had recently announced that beginning at 12:01 a.m. the night before a flight, you could download your ticket at home, print it out, and then just have the bar code scanned by the gate agent before you boarded.

“Friedman,” I said to myself, looking at this scene, “you are so twentieth-century... You are so Globalization 2.0.” In Globalization 1.0 there was a ticket agent. In Globalization 2.0 the e-ticket machine replaced the ticket agent. In Globalization 3.0 you are your own ticket agent.

The television commercial is from Konica Minolta Business Technologies for a new multipurpose device it sells called bizhub, a piece of office machinery that allows you to do black-and-white or color printing, copy a document, fax it, scan it, scan it to e-mail, or Internet-fax it—all from the same machine. The commercial begins with a rapid cutting back and forth between two guys, one in his office and the other standing at the bizhub machine. They are close enough to talk by raising their voices. Dom is senior in authority but slow on the uptake-the kind of guy who hasn't kept up with changing technology (my kind of guy!). He can see Ted standing at the bizhub machine when he leans back in his chair and peers out his office doorway.

Dom: (At his desk) Hey, I need that chart. Ted: (At the bizhub) I'm e-mailing it now.

Dom: You're e-mailing from the copy machine?

Ted: No, I'm e-mailing from bizhub.

Dom: Bizhub? Wait, did you make my copies yet?

Ted: Right after I scan this.

Dom: You're scanning at an e-mail machine?

Ted: E-mail machine? I'm at the bizhub machine.

Dom: (Bewildered) Copying?

Ted: (Trying to be patient) E-mailing, then scanning, then copying.

Dom: (Long pause) Bizhub?

VO: (Over an animated graphic of bizhub illustrating its multiple functions) Amazing versatility and affordable color. That's bizhub, from Konica Minolta.

(Cut to Dom alone at the bizhub machine, trying to see if it will also dispense coffee into his mug.)

Southwest was able to offer its at-home ticketing, and Konica Minolta could offer bizhub, because of what I call the triple convergence. What are the components of this triple convergence? The short answer is this: First, right around the year 2000, all ten of the flatteners discussed in the previous chapter started to converge and work together in ways that created a new, flatter, global playing field. As this new playing field became established, both businesses and individuals began to adopt new habits, skills, and processes to get the most out of it. They moved from largely vertical means of creating value to more horizontal ones. The merger of this new playing field for doing business with the new ways of doing business was the second convergence, and it actually helped to flatten the world even further. Finally, just when all of this flattening was happening, a whole new group of people, several billion, in fact, walked out onto the playing field from China, India, and the former Soviet Empire. Thanks to the new flat world, and its new tools, some of them were quickly able to collaborate and compete directly with everyone else. This was the third convergence. Now let's look at each in detail.

Convergence I

All ten flatteners discussed in the previous chapter have been around, we know, since the 1990s, if not earlier. But they had to spread and take root and connect with one another to work their magic on the world. For instance, at some point around 2003, Southwest Airlines realized that there were enough PCs around, enough bandwidth, enough computer storage, enough Internet-comfortable customers, and enough software know-how for Southwest to create a work flow system that empowered its customers to download and print out their own boarding passes at home, as easily as downloading a piece of e-mail. Southwest could collaborate with its customers and they with Southwest in a new way. And somewhere around the same time, the work flow software and hardware converged in a way that enabled Konica Minolta to offer scanning, e-mailing, printing, faxing, and copying all from the same machine. This is the first convergence.

As Stanford University economist Paul Romer pointed out, economists have known for a long time that “there are goods that are complementary-whereby good A is a lot more valuable if you also have good B. It was good to have paper and then it was good to have pencils, and soon as you got more of one you got more of the other, and as you got a better quality of one and better quality of the other, your productivity improved. This is known as the simultaneous improvement of complementary goods.”

It is my contention that the opening of the Berlin Wall, Netscape, work flow, outsourcing, offshoring, open-sourcing, insourcing, supply-chaining, in-forming, and the steroids amplifying them all reinforced one another, like complementary goods. They just needed time to converge and start to work together in a complementary, mutually enhancing fashion. That tipping point arrived sometime around the year 2000.

The net result of this convergence was the creation of a global, Web-enabled playing field that allows for multiple forms of collaboration-the sharing of knowledge and work-in real time, without regard to geography, distance, or, in the near future, even language. No, not everyone has access yet to this platform, this playing field, but it is open today to more people in more places on more days in more ways than anything like it ever before in the history of the world. This is what I mean when I say the world has been flattened. It is the complementary convergence of the ten flatteners, creating this new global playing field for multiple forms of collaboration.

Convergence II

Great, you say, but why is it only in the past few years that we started to see in the United States the big surges in productivity that should be associated with such a technological leap? Answer: Because it always takes time for all the flanking technologies, and the business processes and habits needed to get the most out of them, to converge and create that next productivity breakthrough.

Introducing new technology alone is never enough. The big spurts in productivity come when a new technology is combined with new ways of doing business. Wal-Mart got big productivity boosts when it combined big box stores-where people could buy soap supplies for six months-with new, horizontal supply-chain management systems that allowed Wal-Mart instantly to connect what a consumer took off the shelf from a Wal-Mart in Kansas City with what a Wal-Mart supplier in coastal China would produce.

When computers were first introduced into offices, everyone expected a big boost in productivity. But that did not happen right away, and it sparked both disappointment and a little confusion. The noted economist Robert Solow quipped that computers are everywhere— except “in the productivity statistics.”

In a pathbreaking 1989 essay, “Computer and Dynamo: The Modern Productivity Paradox in a Not-Too Distant Mirror,” the economic historian Paul A. David explained such a lag by pointing to a historical precedent. He noted that while the lightbulb was invented in 1879, it took several decades for electrification to kick in and have a big economic and productivity impact. Why? Because it was not enough just to install electric motors and scrap the old technology-steam engines. The whole way of doing manufacturing had to be reconfigured. In the case of electricity, David pointed out, the key breakthrough was in how buildings, and assembly lines, were redesigned and managed. Factories in the steam age tended to be heavy, costly multistory buildings designed to brace the weighty belts and other big transmission devices needed to drive steam-powered systems. Once small, powerful electric motors were introduced, everyone hoped for a quick productivity boost. It took time, though. To get all the savings, you needed to redesign enough buildings. You needed to have long, low, cheaper-to-build single-story factories, with small electric motors powering machines of all sizes. Only when there was a critical mass of experienced factory architects and electrical engineers and managers, who understood the complementarities among the electric motor, the redesign of the factory, and the redesign of the production line, did electrification really deliver the productivity breakthrough in manufacturing, David wrote.