His latest book ‘The world is flat’ is about how the world is changing (he uses the word flattening) due to various trends. I have just completed the first section, which discusses about the various factors, which are driving this trend. The ten key factors, which are driving the world, are below
- Berlin wall : The fall of the Berlin wall was a key event as it a precursor to the fall of communism and moving these countries from communism and socialism (India ) to a capitalistic system. This event brought down the barriers between the countries and accelerated globalization
- Netscape IPO : Netscape introduced the first commercial browser and brought Internet to the masses. Internet no longer was some geeky technology used by a few.
- Work flow software : Here he talks of how the workflow technology has enabled the various applications across companies and countries to talk to each other and has reduced the friction in global commerce
- Open sourcing : Basically the free software , open collaboration movement between individuals. Ex : Linux, Apache server and now blogging and podcasting
- Outsourcing : Companies giving out various functions to specialized vendors
- Offshoring : No need for me to say anything
- Supply Chaining : Gives the example of how Wal-Mart has developed this extremely efficient global supply chain and driven down costs across the value chain
- Insourcing : Outside vendor getting into your company and taking over non core functions such as logistics etc
- Informing : Empowerment of the individual . Example : Google has enabled anyone with a computer and net connection to have access to all possible information (well almost )
- Steroids : Talks about how wireless technology is accelerating the above trends
Tom mentions India a lot in his book. India has definitely got impacted big time. Even individuals like us have benefited. As a personal example – before the net , It was a pain getting financial information on a company. One had to go to a broker, ask for the annual report. The whole research would take days. Now I can Google any company and pull all the data I want.
The transaction costs were high prior to the net. Now the same are below 1 %.
Of course all the information , does not mean that investing is any easier. It still requires interpreting the information. At the same time, the minute-by-minute stock quotes and information (noise ??) are only distracting