Book Review

Book: The World is Flat
(A Brief History of the Twenty-First Century)
Author: Thomas L. Friedman
Publisher: Farrar, Straus and Giroux New York
Pages: 488 Price: $ 27.50

GLOBALIZATION—THE NEW TRENDS
Dr Afzal Mirza
This best selling book has been written by Thomas L. Friedman a foreign affairs columnist of The New York Times. He has already authored three best selling books namely From Beirut to Jerusalem (1989),The Lexus and the Olive Tree: Understanding Globalization (1999) and Attitudes: Exploring the World After September 11 (2002). This is his yet another book on globalization and as usual by inserting lot of statistics and anecdotes from his personal interviews with a large number of people he met during his travels as a journalist Friedman has produced a commercially successful best seller. The proof of its success lies in the fact that it is on the bestsellers charts for the last 20 weeks and is being profusely quoted here and there. Highlighting the present trend of outsourcing in America Friedman has developed a couple of theories on globalization that sound interesting. The first theory is that The World is Flat and that is also the title of the book that attracts many readers for the book. What does he mean by the flatness of the world? He says that when Columbus sailed in three ships with a crew of three hundred people in search of India he accidentally discovered America. India was a great source of attraction for him because of its gold and spices and other exotic goods. On his return he reported to the King and Queen of Spain that the world was round. When Friedman undertook his journey to India he traveled with a small crew of photographers of Discovery Times .When he returned from India he reported to his wife that world was flat.
Friedman led his crew to Bangalore to visit the operations of an Indian company called Infosys. From downtown Bangalore when he drove through the pockmarked road with sacred cows, motor- rickshaws and horse-driven carts all jostling along to arrive at the facility he found a different world inside. “A massive resort-size swimming pool nestles amid boulders and manicured lawns adjacent to a huge putting green. There are multiple restaurants and a fabulous health club. Glass and steel buildings seem to sprout up like weeds each week.” A visit by the crew to the global conferencing center there found a massive screen on the wall—the biggest digital TV screen Friedman had ever seen. On that screen he was told that tele-conferencing could be carried out with people from Boston, New York, London, Sam Francisco all alive simultaneously. Above the screen there were eight big clocks each showing time of different zones of the world from US East/ West to GMT, Japan, Singapore Australia and Hong Kong. The boss of the facility Nilekani told Friedman,”Tom, the playing field is being leveled.” He meant that countries like India now compete in the field of globalization. According to the author what that man was saying was that the playing field was being flattened. “Flattened? Flattened? My God he‘s telling me the world is flat.”
What was going on inside that facility was indeed amazing. Friedman tells that the companies of America have outsourced much of their work to this Bangalore facility. If you have rented a car from Avis in America say in Chicago the bills are processed from Bangalore. The bills of General Electric for American consumers are prepared and issued from India. You travel by Delta Airlines or any other American airlines and if you have any lost baggage problem it is traced from Bangalore. Friedman describes how in his hotel room he was visited by a young Indian asking him if he could assign his personal income tax returns preparation to him. ”But I work in USA and receive my salary there,” Friedman tells the young man. “No problem, sir,” replies the young man ,” we are already doing it for hundreds of Americans here in India.” Then he goes on to tell the author that many small and medium sized tax consulting companies have already outsourced their work to Indians because it is much cheaper here to process it. What they do is, he explains, they assign a fictitious name to the customer and pass on his income details to them which Indian accountants process and send back the income tax statements for submission to American Revenue Service after just changing back the original name on the statement. Friedman writes,” In 2003 some 25000 US tax returns were done in India. In 2004 the number was 100,000. In 2005 it is expected to be 400,000. In a decade you will assume that your accountant has outsourced the basic preparation of your tax returns---if not more. It is interesting to know that there are 25000 people sitting in a building in Bangalore and a majority of them are making promotional calls for various products and customer service in US.

Friedman has written about an interesting discussion he had with an Indian company boss. When he asked the him far could they go in outsourcing ? For instance you can’t outsource the serving of a steak or giving a hair cut. The man replies,” But we are coming close to exporting a haircut, the appointment part. What kind of haircut do you want? Which barber do you want? All those things can and will be done by a call center far away. “His next program?. He had been talking to an Israeli company that is making some big advances in compression technology to allow for easier and better transfer of CAT Scans via the internet so you can quickly get a second opinion from a doctor half a world away. Later Friedman came to know from a John Hopkins Hospital researcher that in many small and medium sized hospitals in US radiologists are outsourcing reading of CAT scans to doctors in India and Australia. The advantage is that it is day time in India and Australia while it is night in US so after- hours coverage becomes possible. Friedman is a journalist and after listening to this outsourcing in other sectors he thought of journalism too and he talked to Tom Glocer the boss of Reuters .He was informed that “ with 2300 journalists around the world in 197 bureaus catering for a market including newspapers, investment bankers, stock brokers, radio, television and Internet outlets Reuters has a complex audience.” About trying to practice outsourcing in Reuters Glocer told Friedman, “ So the first thing we did was hire six reporters in Bangalore as an experiment. We said, ’let’s let them just do the flash headlines and the tables and whatever else we can let them to do in Bangalore. India is an unbelievably rich place to recruit people with not only technical skills but alsos financial skills.’” Thanks to outsourcing Glocer has cut the entire Reuters staff by roughly a quarter.

Broadly speaking Friedman has divided the history of globalization in three eras. The first lasted from 1492 when Columbus set sails for America to 1800. He calls it Globalization: 1.The key agent of change during this era was how much muscles you had. That means how much horse power, wind power or steam power you had. The second era Globalization 2 lasted roughly from 1800 to 2000 interrupted by the Great Depression and World Wars I and II. This shrank the world from medium size to small size. He thinks that driving force during this era were multinational companies. The multinationals went global for markets and labor spear- headed by joint stock companies and industrial revolution. The world shrank because of faster means of communication and computers. Globalization 3 is shrinking the world from small size to tiny size leveling the competition field or flattening the globe. And the main instrument of this age is not hardware but software that empowers individuals. The role of individuals and companies in the present era Friedman discusses in his theory called The Dell Theory of Conflict Prevention. He explains how it would work. He says that in the course of his work for this book he met Michael Dell the CEO of Dell computers. He found out that the company sells 140000 to 150000 computers every day. Now as you receive an order with your specific requirements the whole machinery comes in to action. The company has six factories around the world—in Ireland, China, Brazil, Tennessee, Texas and Malaysia. The specific order given by Friedman was designed in Texas. There are thirty main components of a computer and each one is produced in dozens of factories in different parts of the world. For example the microprocessor comes either from Intel factories in Philippines, China, Costa Rica or Malaysia. Its memory comes from Taiwan, Korea or Germany etc. etc. These are just two out of thirty components but there are still 28 components that are procured from hundreds of factories located around the world. The criterion for location of these facilities is nothing but the peaceful and stable environments as well as stable political systems prevailing in those countries. Thus India is one such country because of its consistent democratic tradition. One can understand why Pakistan is not there.
According to the author the biggest test case of Dell theory is China versus Taiwan where during the last elections “motherboards won over motherland” but the theory is already proven in case of India and Pakistan. When in 2002 India and Pakistan were positioned against each other and there was a global panic that the two old adversaries armed with nuclear weapons might come to the point of collision then it was the Bangalore top executives who prevailed upon the prime minister Vajpayee not to indulge in such a venture which would ruin the fast developing economy of India. Because in that eventuality the US and European companies would withdraw the outsourcing and India’s economy would collapse. Friedman thinks that the conflict was not prevented by the intervention of United Nations or any political power but the interdependency of economic interests of the countries prompted by the expediencies of Globalization 3. (End)