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“The metaphor of a flat world, used by Friedman to describe the next phase of globalization, is ingenious. It came to him after hearing an Indian software executive explain how the world’s economic playing field was being leveled. For a variety of reasons, what economists call ”barriers to entry” are being destroyed; today an individual or company anywhere can collaborate or compete globally. |
Bill Gates explains the meaning of this transformation best. Thirty years ago, he tells Friedman, if you had to choose between being born a genius in Mumbai or Shanghai and an average person in Poughkeepsie, you would have chosen Poughkeepsie because your chances of living a prosperous and fulfilled life were much greater there. ”Now,” Gates says, ”I would rather be a genius born in China than an average guy born in Poughkeepsie.” “
From NewYork Times – “The World Is Flat: The Wealth of Yet More Nations“
While answering the question “What created the flat world?”, Friedman stresses technological forces. “Paradoxically, the dot-com bubble played a crucial role. Telecommunications companies like Global Crossing had hundreds of millions of dollars of cash — given to them by gullible investors — and they used it to pursue incredibly ambitious plans to ”wire the world,” laying fiber-optic cable across the ocean floors, connecting Bangalore, Bangkok and Beijing to the advanced industrial countries. This excess supply of connectivity meant that the costs of phone calls, Internet connections and data transmission declined dramatically — so dramatically that many of the companies that laid these cables went bankrupt. But the deed was done, the world was wired. Today it costs about as much to connect to Guangdong as it does New Jersey.”
Thanks to online business networking portals like LinkedIn and openBC, the world is wired for me too, as an individual. Friedman is right when he attributes these changes to technological forces. Today, using e-mails, instant messaging software like Yahoo Messenger and MSN Messenger, voice over internet protocol software like Skype, video conferencing and tele-conferencing, broadband internet and blogging software, I can communicate with anyone from anywhere on the planet, provided of course that they too have the same communicating capability.
I no longer need to depend on an established organization / company to provide me employment so that I can earn by providing services to people who want their work outsourced. I can, on my own, as an individual, establish my credibility by using online business networking portals like LinkedIn and openBC and get business from clients overseas. I provide my services online and offsite and get paid by a simple bank transfer (which is usually economical only for large payments) or by using money transfer facilities like Western Union Money Transfer. (I have not had a chance to use PayPal because they still do not allow me to withdraw cash and a cheque is time-consuming. They also need me to necessarily own a credit card so that my account can be verified for me to withdraw upwards of USD 500.) What PayPal does not offer, Western Union Money Transfer does – easy, economical even for small amounts, fast and convenient for both the service provider and the client.
“The next blow in this one-two punch was the dot-com bust. The stock market crash made companies everywhere cut spending. That meant they needed to look for ways to do what they were doing for less money. The solution: outsourcing. General Electric had led the way a decade earlier and by the late 1990’s many large American companies were recognizing that Indian engineers could handle most technical jobs they needed done, at a tenth the cost. The preparations for Y2K, the millennium bug, gave a huge impetus to this shift since most Western companies needed armies of cheap software workers to recode their computers. Welcome to Bangalore.“
Online Business Networking portals like LinkedIn and openBC, indeed make the world a level playing field for me. The world being flat is no longer a metaphor in Friedman’s book. It is no longer limited to large firms like Infosys and Wipro. As an individual, I have the whole world open to me with opportunities galore. I do not necessarily have to work with Infosys or Wipro to be part of this metaphor!
“People in advanced countries have to find ways to move up the value chain, to have special skills that create superior products for which they can charge extra. The UPS story is a classic example of this. Delivering goods doesn’t have high margins, but repairing computers (and in effect managing a supply chain) does. In one of Friedman’s classic anecdote-as-explanation shticks, he recounts that one of his best friends is an illustrator. The friend saw his business beginning to dry up as computers made routine illustrations easy to do, and he moved on to something new. He became an illustration consultant, helping clients conceive of what they want rather than simply executing a drawing. Friedman explains this in Friedman metaphors: the friend’s work began as a chocolate sauce, was turned into a vanilla commodity, through upgraded skills became a special chocolate sauce again, and then had a cherry put on top.”
Although Friedman constantly says that America (using it as a representative of the developed world) should outsource everything that is lower in the value chain to India (using it as a representative of the developing world), I believe that because of the online business networking portals that I am part of, I can today, move into the role of the “illustration consultant” like Friedman’s friend did in the example above. For example, if someone wants transcription services outsourced (for a workshop on creativity and innovation) and wants a good job done – not only can I deliver transcription services, I can move up the value chain and give the person suggestions about improving their speech delivery techniques, I can give suggestions about where they can find out more information about a certain aspect of innovation and creativity that one of their audience member asked them about and they were not able to answer convincingly, since I am an avid networker, I could even put them in touch with the CEO of a company who wanted to inculcate an innovation culture in his organization – would mean a potential client for the outsourcer!
And I can do so by asking a premium, which would be above the normal rate for a “regular” voice to data transcription service.
In our race to share the wealth of the developed world, people in the developing world, more often than not, undermine themselves and their capabilities. We think “Oh well! I am an MBA, I have a management consulting background, I have a fantastic command over English, I watch all these English movies so I can get the accent. So why can’t I provide transcription services? After all, for 5 hours of voice, which will work out to 25 hours of data, will pay me almost half a month’s salary!”
The point here is that people in developing countries are open-minded about doing anything, but in that process, we undermine our actual potential. So instead of providing a cut and dried transcription service, I throw in a value-added service. I will be of course doing an outsourced job, but I will get paid what a person in the developed world would have gotten paid for doing the same job. All clear?
