September 30, 2005

The world is Flat

I have been reading the book ‘The world is flat’ from Thomas L Friedman. Tom is a New York times columnist who has also written ‘Lexus and the Olive tree’. Both these books are about globalization.
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


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Joe Muka said...

Hi, Saw your site late night. Some of your ideas I may use for my site about voip certification It's kind of a boring topic...I liked some of your info.

Rohit said...

i actually find the topic of VOIP kind of interesting.however as my blog is focussed on investing i write on how VOIP as a technology is impacting several industries beyond telecom
Thomas friedman has listed VOIP technology as one of the flatners. In addition economist , in the previous issue had their cover page on VOIP and how ebay's purchase of skype is going to impact the telecom industry