The World Is Flat
All dreamers in action—not martyrs in waiting.
Let me close with one last point. My own daughter went off to college in the fall of 2004, and my wife and I dropped her off on a warm September day. The sun was shining. Our daughter was full of excitement. But I can honestly say it was one of the saddest days of my life. And it wasn’t just the dad-and-mom-dropping-their-eldest-child-off-at-school thing. No, something else bothered me. It was the sense that I was dropping my daughter off into a world that was so much more dangerous than the one she had been born into. I felt like I could still promise my daughter her bedroom back, but I couldn’t promise her the world—not in the carefree way that I had explored it when I was her age. That really bothered me. Still does.
The flattening of the world, as I have tried to demonstrate in this book, has presented us with new opportunities, new challenges, new partners but also, alas, new dangers, particularly as Americans. It is imperative that we find the right balance among all of these. It is imperative that we be the best global citizens that we can be—because in a flat world, if you don’t visit a bad neighborhood, it might visit you. And it is imperative that while we remain vigilant to the new threats, we do not let them paralyze us. Most of all, though, it is imperative that we nurture more people with the imaginations of Abraham George and Fadi Ghandour. The more people with the imagination of 11/9, the better p. 469 chance we have of staving off another 9/11. I refuse to settle for a world that gets smaller in the wrong sense, in the sense that there are fewer and fewer places an American can go without a second thought and fewer and fewer foreigners feeling comfortable about coming to America.
To put it another way, the two greatest dangers we Americans face are an excess of protectionism—excessive fears of another 9/11 that prompt us to wall ourselves in, in search of personal security—and excessive fears of competing in a world of 11/9 that prompt us to wall ourselves off, in search of economic security. Both would be a disaster for us and for the world. Yes, economic competition in the flat world will be more equal and more intense. We Americans will have to work harder, run faster, and become smarter to make sure we get our share. But let us not underestimate our strengths or the innovation that could explode from the flat world when we really do connect all of the knowledge centers together. On such a flat earth, the most important attribute you can have is creative imagination—the ability to be the first on your block to figure out how all these enabling tools can be put together in new and exciting ways to create products, communities, opportunities, and profits. That has always been America’s strength, because America was, and for now still is, the world’s greatest dream machine.
I cannot tell any other society or culture what to say to its own children, but I can tell you what I say to my own: The world is being flattened. I didn’t start it and you can’t stop it, except at a great cost to human development and your own future. But we can manage it, for better or for worse. If it is to be for better, not for worse, then you and your generation must not live in fear of either the terrorists or of tomorrow, of either al-Qaeda or of Infosys. You can flourish in this flat world, but it does take the right imagination and the right motivation. While your lives have been powerfully shaped by 9/11, the world needs you to be forever the generation of 11/9—the generation of strategic optimists, the generation with more dreams than memories, the generation that wakes up each morning and not only imagines that things can be better but also acts on that imagination every day.
Acknowledgments
p. 471 In 1999 I published a book on globalization called The Lexus and the Olive Tree. The phenomenon we call globalization was just taking off then, and The Lexus and the Olive Tree was one of the early attempts to put a frame around it. This book is not meant to replace The Lexus and the Olive Tree, but rather to build on it and push the arguments forward as the world has evolved.
I am deeply grateful to the publisher of The New York Times and chairman of the New York Times Company, Arthur Sulzberger Jr., for granting me a leave of absence to be able to undertake this book, and to Gail Collins, editorial page editor of The New York Times, for supporting that leave and this whole project. It is a privilege to work for such a great newspaper. It was Arthur and Gail who pushed me to try my hand at documentaries for the Discovery Times Channel, which took me to India and stimulated this whole book. Thanks in that regard also go to Billy Campbell of the Discovery Channel for his enthusiastic backing of that Indian documentary, and to Ken Levis, Ann Derry, and Stephen Reverand for helping to bring it off. Without Discovery the show would not have happened.
I never could have written this book, though, without some wonderful tutors from the worlds of technology, business, and politics. A few individuals must be singled out for particular thanks. I never would have broken the code of the flat world without the help of Nandan Nilekani, CEO of the Indian technology company Infosys, who was the first to point out to me how the playing field was being leveled. Vivek Paul, presp. 472ident of the Indian technology company Wipro, really took me inside the business of the flat world and deciphered it all for me—time and time again. Joel Cawley, the head of IBM’s strategic planning team, helped me connect so many of the dots between technology and business and politics on Planet Flat—connections I never would have made without him. Craig Mundie, chief technology officer of Microsoft, walked me through the technological evolutions that made the flat world possible and helped ensure that in writing about them I would not fall flat on my face. He was a tireless and demanding tutor. Paul Romer, the Stanford University economist who has done so much good work on the new economy, took the time to read the book in draft and brought both his humanity and his intellect to several chapters. Marc Andreessen, one of the cofounders of Netscape; Michael Dell of Dell Inc.; Sir John Rose, chairman of Rolls-Royce; and Bill Gates of Microsoft were very generous in commenting on certain sections. My inventor friend Dan Simpkins was enormously helpful in walking this novice through his complex universe. Michael Sandel’s always challenging questions stimulated me to write a whole chapter—“The Great Sorting Out.” And Yaron Ezrahi, for the fourth book in a row, let me bounce countless ideas off his razor-sharp mind. The same was true for David Rothkopf. None of them is responsible for any mistakes, only for insights. I am truly in their debt.
So many other people shared with me their valuable time and commented on different parts of this book. I want to thank in particular Allen Adamson, Graham Allison, Alex and Jocelyn Attal, Jim Barksdale, Craig Barrett, Brian Behlendorf, Katie Belding, Jagdish Bhagwati, Sergey Brin, Brill Brody, Mitchell Caplan, Bill Carrico, John Chambers, Nayan Chanda, Alan Cohen, Maureen Conway, Lamees El-Hadidy, Rahm Emanuel, Mike Eskew, Judy Estrin, Diana Farrell, Joel Finkelstein, Carly Fiorina, Frank Fukuyama, Jeff Garten, Fadi Ghandour, Bill Greer, Jill Greer, Ken Greer, Promod Haque, Steve Holmes, Dan Honig, Scott Hyten, Shirley Ann Jackson, P. V. Kannan, Alan Kotz, Gary and Laura Lauder, Robert Lawrence, Jerry Lehrman, Rick Levin, Joshua Levine, Will Marshall, Walt Mossberg, Moisés Naím, David Neeleman, Larry Page, Jim Perkowski, Thomas Pickering, Jamie Popkin, Clyde Prestowitz, Glenn Prickett, Saritha Rai, Jerry Rao, Rajesh Rao, Amartya p. 473 Sen, Eric Schmidt, Terry Semel, H. Lee Scott Jr., Dinakar Singh, Larry Summers, Jeff Uhlin, Atul Vashistha, Philip Verleger Jr., William Wertz, Meg Whitman, Irving Wladawsky-Berger, Bob Wright, Jerry Yang, and Ernesto Zedillo.
And special thanks to my soul mates and constant intellectual companions Michael Mandelbaum and Stephen P. Cohen. Sharing ideas with them is one of the joys of my life. A special thanks too to John Doerr and Herbert Allen Jr., who each gave me the opportunity to road test this book on some of their very demanding and critical colleagues.
As always, my wife, Ann, was my first editor, critic, and all-around supporter. Without her help and intellectual input this book never would have happened. I am so lucky to have her as my partner. And thanks too to my daughters Orly and Natalie for putting up with another year of Dad closeted away in his office for long hours, and to my d
ear mother, Margaret Friedman, for asking every day when my book would be done. Max and Eli Bucksbaum provided valuable encouragement in the early hours of the morning in Aspen. And my sisters Shelley and Jane have always been in my corner.
I am blessed to have had the same literary agent, Esther Newberg, and publisher, Jonathan Galassi, for four books, and the same line editor, Paul Elie, for the last three. They are simply the best in the business. I am also blessed to have the most talented and loyal assistant, Maya Gorman.
This book is dedicated to three very special people in my life: My mother- and father-in-law, Matt and Kay Bucksbaum, and my oldest childhood friend, Ron Soskin.
Index
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
p. 475 Abell, Pete, 130
Abizaid, Gen. John, 39
Abdul Kalam, A.P.J., 458
Accenture Ltd., 34, 205
accounting, 11-15, 80, 166, 184
Adamson, Allen, 180
adaptability, 239-43, 249
Addison, Craig, 423
Adobe Photoshop, 98, 188, 241
Afghanistan, 55, 396, 401, 423, 434-35
bin Laden in, 448, 450
U.S. invasion of, 198, 386-87, 458
AFL-CIO, 222
Africa, 182, 315, 317, 376, 377, 389, 398, 412
disease in, 377-81
African-Americans, 254, 304-5, 403
Agere, 417
agriculture, 288-89
environmental issues and, 297-99
AIDS, see HIV-AIDS
Airborne Express, 345-48
Airbus Industries, 196
Airman Flight School, 445
Airspace, 167
Akbar, M. J., 457
al-Arabiya news channel, 406
al-Jazeera television network, 400
al-Qaeda, 8, 387, 392-95, 429-35, 437, 444-45, 447, 456, 457, 464, 469
Al-Rashed, Abdel Rahman, 406
al-Shehhi, Marwan, 395
Al-Sudairi, Turki, 327
al-Zarqawi, Abu Musab, 402
al-Zawahiri, Ayman, 394, 396-97, 445, 448
Alexa.com, 94
Ali, Al Abdul Aziz, 444
Allen, Jay, 132
Allison, Graham, 437
Alps, 416
Amazon.com, 65, 68, 98, 102, 156, 242
Amazon rain forests, 412
ambition, 260-65
American Airlines Flight 11, 449
American Association for the Advancement of Science, 253
American Express, 6, 173, 426
American Indians, 108
American Revolution, 460
America Online (AOL), 26, 53, 56, 63, 78, 212, 278, 432
Amin, Idi, 328
AMR Research, 130
anchored jobs, 238-39
Andreessen, Marc, 58-62, 70, 83, 85, 86, 231-32
Angola, 321
Annunziata, Robert, 67
anti-Americanism, 385-87
antiglobalization movement, 384, 387
Apache, 82-91, 96, 103
Apple, 59, 235, 463
Macintosh, 59, 61
Arab Human Development Report, 398, 401
Arabs, 9, 292, 316-17, 326-28, 392-406, 456, 461, 463-64, 466
Arafat, Yasser, 467
Aramex, 345-50, 463-64
ARC Electronics, 66
Ardolino, Bill, 43-44
Argentina, 250, 322
Arguello, Mike, 83, 261-62
Army, U.S., 432
Central Command, 430
Arrow, 417
p. 476 ASIMCO Technologies, 114, 116, 120, 122-24, 127
Askey, 417
Assaf, Anas, 467
Associated Press, 218-19, 271
Association of University Technology Managers, 245
Asustek, 417
Atef, Mohammed, 445
AT&T, 58, 67, 68
Bell Labs, 113, 254
Athens Olympics, 250
Atta, Mohammed, 292, 395, 396, 445, 449
Attal, Alex, 282-83
AU Optronics, 417
Auras, 416
Australia, 6, 16, 95, 138, 187, 320, 436
Austria, 320, 442
automobile industry, 29, 102
in India, 234
offshoring in, 122-25
supply chain in, 146-47
Avis, 425, 426
Awadallah, Bassem, 462
Azim, Shabana, 458
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
B
Baader-Meinhof Gang, 396
Bahrain, 316, 326, 328, 461, 463
Baker, Dolly, 36-37
Baker, James A., 111, 48-49
Baker, Mitchell, 99
Baldwin family, 97-98
Baltimore, David, 303-4
Bangladesh, 315
BankBoston, 244
bankruptcy, 319, 320
Barksdale, Jim, 57-60, 63-64
Barnes and Noble, 65
Barrett, Craig, 182, 183, 268, 322
basketball, 250-51, 303
Beesley, Angela, 95
Behlendorf, Brian, 84-89, 91-93
Beijing Foreign Affairs Institute, 411
Beijing Municipal Bureau of Commerce, 408
Belding, Brian, 372
Belding, Katie, 372-73
Belgium, 95, 403
benefits, portable, 284-88
Berlin Wall, fall of, 48-52, 55, 60, 73, 182, 192, 194, 313, 385, 441-42
Berners-Lee, Tim, 56, 86
Best Buy, 118
Bhagwati, Jagdish, 232, 233
Bible, the, 48
Bigari, Steven, 40-41
Billpoint, 78
Bina, Eric, 86
biodiversity, 297-98
bin Laden, Osama, 55, 387, 395-97, 400-401, 403-405, 436, 438, 444-45, 447, 448
Birdsall, Nancy, 461
Bir Zeit University, 467
BlackBerry, 213
bloggers, 93
Bloomberg news organization, 18
Bluetooth, 159-60
BMW, 354
Boeing Aircraft, 75, 171, 194-97
Bombardier, 263
Boomer, L. Gary, 14
Boston College, 271-72
Boucher, Richard, 425
Bradley, Bill, 197
Brazil, 51, 78, 95, 117, 314, 320, 322, 414
Brezhnev, Leonid, 278
Brickwork, 31-32
Brin, Sergey, 152, 154-55, 292
Britain, 9, 95, 212, 231, 234, 320, 344, 404, 445
automobile industry in, 171-72, 211-12, 354-56
economic reform in, 314, 333
India and, 50, 190, 325, 328
Microsoft research center in, 266
Muslims in, 399
offshoring by, 417
university enrollments in, 260
Britannica.com, 94
British Airways, 171, 425, 426
Brody, Bill, 162, 272, 293
Brooke, Jim, 160
Brookings Institution, 293
Brown v. Board of Education (1954), 254
Buddhists, 463
Buffett, Jimmy, 373
Bureau of Labor Statistics (BLS), 258
Burkina Faso, 320
Burns, Nick, 39
Bush, George W., 42, 93, 198-99, 268, 283-84, 303, 387, 450-52
business startup costs, 318-20
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
C
C++, 111
California, University of: Berkeley, 85, 87, 96
Santa Cruz, 293
California Institute of Technology (Caltech), 84, 303-4
Calle, Luis de la, 313, 322
Cambodia, 142, 320, 363-66
p. 477 Cambridge Energy Research Associates, 413
Cambridge University, 193, 234
camera phones, 169-70, 179, 372-74
Cameroon, 320
Canada, 138, 143, 148, 187, 310, 320, 331, 410
capital markets, 245-46
CapitalOne, 290
-91
Caplan, Mitchell H., 351, 352
Carnegie Endowment for International Peace, 451
Carnegie Mellon University, 96, 105
Carrico, Bill, 304
Carrier, 29
Castaneda, Jorge, 332
Caterpillar, 122, 124
CAT scans, 15-16, 30, 239
Cawley, Joel, 63, 76, 79, 81, 302, 353
CBS News, 42, 93
CCI, 416
Celestica, 299
cell phones, 160-61, 164-65, 167, 169-70, 213, 372-74
Central Intelligence Agency (CIA), 39, 292
Chamber of Commerce, U.S., 311
Chambers, John, 323
Chanda, Nayan, 383, 405
Chechnya, 406, 434-36
Chen Shui-bian, 424
Cherukuri, Satyam, 30, 29-30
Chile, 316
Chi Mei Optoelectronics, 417
China, 29, 92, 95, 104, 141, 151, 181-83, 208, 252, 277, 309, 316, 322, 354, 385, 407, 430, 463
basketball in, 250
capital markets in, 245
cell phones in, 373
Central Bank of, 310
communist revolution in, 436
Cultural Revolution in, 267, 328
culture of, 325, 327-28
disease in, 378
economic growth of, 249
economic reforms in, 314
education in, 264-68, 271-73, 305, 333, 335
eighteenth-century, 11
energy consumption in, 407-12
engineers in, 113, 257, 258, 280
enrollment in foreign graduate schools of students from, 260;
environmental issues in, 300
and fall of Berlin Wall, 51
IBM and, 210-11
immigrants from, 292
intangibles of economic development in, 329, 331-36
intellectual property piracy in, 218
manufacturing in, 21, 74, 114-27, 235, 294, 309-13, 315, 356, 414, 416, 417, 421-22
middle class in, 275-76, 387
and open-sourcing, 102
outsourcing to, 32-36, 113, 189, 247-49, 361
political stability of, 247
poverty in, 315
rural population of, 221, 376, 377, 380, 413-14, 419, 420
scientists in, 257, 269
Taiwan and, 419, 422-25
Trade policy and, 228-33, 235-36
in Wal-Mart supply chain, 132, 138, 140, 177
work ethic in, 263, 264
zippies in, 191-94