Fostering competition in the global village

In his bestselling book The World Is Flat, Thomas Friedman elaborates on a story he tells his daughters. “Girls, when I was growing up, my parents used to say to me, ‘Tom, finish your dinner. People in China and India are starving.’ My advice to you is: Girls, finish your homework. People in China and India are starving for your jobs.”Friedman, a columnist for the New York Times went to Bangalore, India to discover what had changed.
One of his first interviews was with Nandan Nilekani, the highly respected chief executive of Infosys Technologies who said “The playing field is being leveled and you Americans are not ready.” Friedman quickly translated this into the analogy that the world had become flat allowing developing economies such as India, China and Russia to compete with a new intensity like never before.
Friedman describes the ten global forces since 1989 that contributed to the flattening of the world. They include the fall of the Berlin Wall, the Netscape IPO, workflow software, open source software, outsourcing, offshoring, supply chaining (e.g. the global Wal-Mart network), insourcing (logistics giants such as UPS and FedEx assisting micro-businesses), in-forming (e.g. Google’s knowledge supply chain) and steroids (e.g. wireless technologies pumping up collaboration and innovation).
The tipping point arrived when these ten flatteners converged around the year 2000 in a complimentary and inclusive manner. As Friedman states, the net result of this convergence was the “creation of a global, Web-enabled playing field that allows for multiple forms of collaboration — the sharing of knowledge and work — in real time, without regard to geography, distance, or, in the near future, even language.”
In the past, the value-creation model was associated with the “command and control” vertical silo. Today, the flattening world is associated with a “connect and collaborate” horizontal model that spans the globe.
Collaborating and managing horizontally requires learning a whole new set of skills for customers and employees. The example of Southwest Airlines is a case in point that the author highlights from personal experience. In the past, the airline communicated vertically with customers through ticket agents. Then it changed by issuing preferred seating through e-ticket machines to customers who arrived early. The relationship today is horizontal. Customers are allowed to download their boarding passes off the Internet. In the flat world, horizontal collaboration turns the customer into their own ticket agent.
The new thing about Globalization 3.0 — as Friedman calls it — is that individuals and small groups of all colours can now connect, collaborate and compete globally. Suddenly, you no longer need to emigrate to innovate. Competitive advantage in a flat world belongs to anyone who can imagine and create new opportunities with others.