Friedman’s Flat World

The New York Times has an essay by Tom Friedman who has also written a book on the same topic: “It’s a Flat World, After All.”

I encountered the flattening of the world quite by accident. It was in late February of last year, and I was visiting the Indian high-tech capital, Bangalore, working on a documentary for the Discovery Times channel about outsourcing. In short order, I interviewed Indian entrepreneurs who wanted to prepare my taxes from Bangalore, read my X-rays from Bangalore, trace my lost luggage from Bangalore and write my new software from Bangalore. The longer I was there, the more upset I became — upset at the realization that while I had been off covering the 9/11 wars, globalization had entered a whole new phase, and I had missed it. I guess the eureka moment came on a visit to the campus of Infosys Technologies, one of the crown jewels of the Indian outsourcing and software industry. Nandan Nilekani, the Infosys C.E.O., was showing me his global video-conference room, pointing with pride to a wall-size flat-screen TV, which he said was the biggest in Asia. Infosys, he explained, could hold a virtual meeting of the key players from its entire global supply chain for any project at any time on that supersize screen. So its American designers could be on the screen speaking with their Indian software writers and their Asian manufacturers all at once. That’s what globalization is all about today, Nilekani said. Above the screen there were eight clocks that pretty well summed up the Infosys workday: 24/7/365. The clocks were labeled U.S. West, U.S. East, G.M.T., India, Singapore, Hong Kong, Japan, Australia.

”Outsourcing is just one dimension of a much more fundamental thing happening today in the world,” Nilekani explained. ”What happened over the last years is that there was a massive investment in technology, especially in the bubble era, when hundreds of millions of dollars were invested in putting broadband connectivity around the world, undersea cables, all those things.” At the same time, he added, computers became cheaper and dispersed all over the world, and there was an explosion of e-mail software, search engines like Google and proprietary software that can chop up any piece of work and send one part to Boston, one part to Bangalore and one part to Beijing, making it easy for anyone to do remote development. When all of these things suddenly came together around 2000, Nilekani said, they ”created a platform where intellectual work, intellectual capital, could be delivered from anywhere. It could be disaggregated, delivered, distributed, produced and put back together again — and this gave a whole new degree of freedom to the way we do work, especially work of an intellectual nature. And what you are seeing in Bangalore today is really the culmination of all these things coming together.”

At one point, summing up the implications of all this, Nilekani uttered a phrase that rang in my ear. He said to me, ”Tom, the playing field is being leveled.” He meant that countries like India were now able to compete equally for global knowledge work as never before — and that America had better get ready for this. As I left the Infosys campus that evening and bounced along the potholed road back to Bangalore, I kept chewing on that phrase: ”The playing field is being leveled.”

”What Nandan is saying,” I thought, ”is that the playing field is being flattened. Flattened? Flattened? My God, he’s telling me the world is flat!”

Doc Searls asked for my views on the article, especially in the context of Linux and open-source. (Here is what Doc wrote.) This is what I wrote:

I must say that I am a fan of Friedman’s writings — he has a way of putting complex things across very nicely especially bringing in a global perspective.

I think he and others are, if anything, underplaying the impact of what is happening in “the flat world.” One has to live here to see the potential and impact. At a micro-level, each day may seem like yesterday, but just as the grains on the chess board (power of 2…) add up, the changes are putting countries like India and China on a powerful and irreversible growth track. Because the people in these countries are now starting to genuinely feel that “tomorrow will be better than today.” And optimism can be a huge force multiplier.

I think (and you’ve read it on my blog) that the next big innovations and opportunities are going to come from the East. If I look at computing and software, I see a future where teleputers (to use a phrase from George Gilder) in the form of thin clients and mobile phones will be used to provide access to all of the content and applications from centralised servers. A decade ago, only an IBM or one of the tech biggies could have been expected to build something like that. Today, thanks to open-source and Linux, so can people like me! And that’s exactly what we are seeking to do. Centralise content and data, and make them available via multiple channels — PCs or thin clients, and mobile phones. In fact, the mobile phones will be an equal participant to the computer in the business process — they are the “laptop of the East.”

Open-source is a powerful enabler. We don’t have the time to recreate the OS and apps. What we can do is aggregate it all together. Use Web 2.0 ideas like APIs, web services and Ajax to glue together various apps and provide the apps that will make SMBs real-time enterprises — faster then their brethren in the developed markets who have to worry about legacy. This is what happened with telecom. We leapfrogged the wireline revolution and went wireless — India now has more mobile phones than land lines. In computing, thanks to open-source and broadband, we will leapfrog the packaged software era and go straight to the software-as-a-service (SaaS) era. ASPs will come back – in the world’s emerging markets, delivering apps and data to thin clients and mobiles. ASPs (and SaaS) are the only way to combat both piracy and non-consumption.

What the likes of Google and Yahoo did for consumers, a new generation of companies needs to do for SMBs in the emerging markets. They are the engines for these economies. Software will power these companies. Thus far, because they couldn’t afford software, piracy or non-consumption was the only option. Both bad. Now, there will be an alternative — thanks to open-source and broadband (the same telecom technologies that got built out in the last 10 years). Software engines built on open-source to power business growth. And make these SMBs more competitive in the global marketplace. Combine what Friedman talks of and add to that the entrepreneurs of the East with cutting edge technology built around teleputers, open-source and broadband — and you will find cos. from the East “flattening” others. Maybe I am exaggerating, but there is now a real opportunity for these cos. Look at the Korean companies who have piggybacked on their nation’s adoption of high-tech. Look at the market caps of some of the top Indian software services cos. (in comparison to their US counterparts). The opportunities are there for these countries and companies (and individuals).

What do you think? Is this wishful thinking, or a reality waiting to happen?

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Rajesh Jain

An Entrepreneur based in Mumbai, India.