To The New "Flat World" Economy
By Jeff Lukens
recently had problems getting connected to the Internet. After spending
several hours on the phone with my internet provider's helpdesk, the
technician informed me the problem must lay with my computer's operating
called the Microsoft helpdesk. I soon discovered the individual I was
talking to was in India. It was late afternoon here in Florida, but in
India it was four-something in the morning, and these were his normal
working hours. His English was a bit stilted and accented, but with
greater attention on my part, understandable. We slogged through the
troubleshooting procedures for more than two hours. Afterwards, my
computer still did not work. In fact, it did not even turn on anymore.
few of days at the repair shop and a few hundred dollars later my computer
was back in working order. The problem, as I found out, was not with my
operating system but with the Internet service provider all along.
me. I believed what the technicians told me. It was totally unnecessary to
call Microsoft's experts in India and have them mess up my computer.
calamity was my introduction to the new economic "flat world,"
as coined by author and columnist Thomas Friedman. In its most simplistic
form, the "flat world" means products are designed in the United
States, manufactured in China, sold at Wal-Mart, and serviced in India.
sudden increase in global telecommunications in the past ten years has
"flattened," or leveled, the playing field on which nations now
along with the fall of communism and the entry of more than two billion
new people into the global workforce, allows many new ways to lower costs.
This tends to be good for consumers and bad for producers.
"flat world" may be just another way to say "cheap
labor," but it is more than that. Capital flows to where companies
can make a profit, with the best companies outsourcing to win, not just to
are taking an ever-closer look at their processes to identify their core
competencies. Competencies not at the core of the company's business
function are outsourced. In so doing, a company can innovate faster, gain
market share, and thereby hire more people in the company does best. While
that sounds good, it is also a painful process for displaced workers.
is determined less and less by massive, multinational corporations, and
ever more by innovative people and startup companies. In India and China
especially, companies compete not just for unskilled, low-wage work, but
more often for high-end specialized work as well.
they could take control over most operating functions of a company,
including product design, and keep U.S. workers only for distribution and
common response to such external threats has been protectionist
legislation on imports. Such measures have never worked before, and will
not work now. Tariffs on textile or steel imports, for example, will not
preserve American jobs.
innovative American companies in these sectors and others have instead
adapted their strategies and practices to thrive in this new world
economic order. Adaptation is clearly a key to success.
real issue is where the American economy is heading. Will we abandon our
manufacturing sector? How do we constantly retrain our workforce? And how
does our public education system keep up? These issues remain uncertain.
crisis is arising where people from other nations compete for our jobs by
working harder than we do and surpassing our education levels. America's
flow of cutting-edge innovations could quickly become yesterday's news if
our children's education doesn't keep up.
makes a folksy contrast from when he was growing up, his parents told him
to finish his dinner because people in China and India were starving. Now
his advice to his daughters is to finish their homework because people in
China and India are starving for their future jobs.
the coming of the "flat world" economy, we will be running
faster just to stay in the same place. We definitely will not compete for
the lowest wages against emerging counties. We can only maintain our
standard of living by staying leaders in innovation, and that can only
happen by excellence in education at all levels.
my experience servicing my computer, the fall of American economic
leadership is a calamity we can avoid. We have much work ahead of us to
improve our education system, and the time is already here for us to get
busy before we get "flattened" by emerging countries competing
for our jobs.