In Lexus and the Olive Tree Thomas Friedman argued that economic interdependence equals prosperity and peace. In his new book he says the argument's over; globalization is here and it's good. But succeeding takes work, forethought, and resistance to "idio
A well-worn map of the world stretches the entire length of one wall in Thomas Friedman's Washington, D.C., office. Friedman, a foreign-affairs columnist for the New York Times, has marked the map with star-shaped stickers of red, gold and blue to indicate the myriad places he's traveled during his Pulitzer Prize-winning career, but, lately, he has fallen behind. "My daughter and I have to update that," he says.
Friedman's map needs updating because he has just spent the past ten months circling the globe again researching and writing his forthcoming book, The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, April 2005). A follow-up to Friedman's best-selling The Lexus and the Olive Tree (his first attempt to understand globalization), The World Is Flat delves even deeper into the phenomenon he believes is reshaping the economic, cultural and political landscapes of the world.
Friedman views globalization as a positive trend, but he admits to a healthy degree of ambivalence. "A lot of this stuff is very worrying to me," he says, in between fielding calls from Pakistan and Lebanon. "But I'm also really excited about certain aspects of it." Friedman believes that globalization is greatly misunderstood in this country—that it's seen as something to be feared and legislated out of existence. "You've got Lou Dobbs out there really making people stupid," he says. "But I'm not trying to convert anybody. I'm just trying to explain globalization to the world. You ignore it at your peril." Editor-in-Chief Ellen Pearlman and Executive Editor Dan Briody caught up with Friedman in between trips to discuss his views on the flattening world and its consequences.
CIO INSIGHT: Globalization is a highly charged political issue. Is it fundamentally misunderstood in this country?
FRIEDMAN: Writing this book was a bit like being in a Twilight Zone episode, because I would go around and interview all these CEOs and CIOs, and they would tell me what they're doing in terms of outsourcing. And they know just what's going on, and they're doing it like crazy. But nobody's told the kids. They're like pod people, they're off doing their thing, but nobody's told the kids.
And they haven't told the kids because of all the political and economic sensitivities. As a result, we're now entering what I think is a fundamental paradigm shift. A truly disruptive, Gutenberg-printing-press-like paradigm shift, and nobody's told the kids.
And we just went through a campaign where the Democrats were debating whether NAFTA is a good idea. Eh, hello? And the Republicans put duct tape over [White House Chief Economist] Greg Mankiw's mouth when he suggested outsourcing might be a good thing, and they stashed him in Dick Cheney's basement. We just had an election that history will look back on and laugh at, because we had an election at a time when the world basically went from vertical to horizontal, and nobody talked about it.
What I am trying to do is say that something important really is happening. The value-creation model is moving away from a vertical silo model to an increasingly collaborative horizontal model, from command and control to collaborate and connect, and that's going to change everything.
Not everyone is as optimistic about this flat world as you are. Why is that?
You can understand why businesses don't want to [be openly optimistic about it], because we have all these people out there. No one wants to be a Benedict Arnold executive. And you've got a major cable-television news show that has twisted itself into a platform for the anti-outsourcing movement and made all its viewers stupid. And so you create an environment where, if you defend this thing, you're Daddy Warbucks or some plutocrat.
CEOs are all worried about their brands. But companies that outsource, outsource to win. They're not outsourcing to shrink. Show me a company that's outsourcing just to save money, and that's a company whose stock I want to short. They're outsourcing to do their innovative turns faster, to grow their company larger, in order to hire more people everywhere, in Los Angeles and Bangalore. That's why they outsource.
But if U.S. companies can't talk about it, and if politicians can't talk about it . . .
Then it's a real problem, and that's why this could all stop, and that's why I wrote this book, because I think the new world is one that we can benefit from. And part of this new world is taking advantage of the ability to source any kind of product or any kind of service from anywhere in the world.
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