Monday, February 11, 2008

The World is Flat and Getting Older

I just finished reading Thomas Friedman's The World is Flat. It is quite insightful and looks at globalization, outsourcing, global supply chains and the impacts this flattening process is having and will have in the future. As the fellow who recommended this book to me said, twenty percent of what Friedman says is wrong. I believe he overestimates what government is capable of doing effectively and he overestimates just how flat the world will become. Some things are just so localized that they can't be flattened (ie it's hard to outsource your house cleaning or lawn care to India). He also introduces too many people as "my friend." I have no doubt that Thomas Friedman has lots of friends, but you don't have to name drop. If you took a shot of whiskey everytime Friedman writes "my friend" you would be too drunk to finish the book. Nonetheless, The World is Flat is well worth the price.

One idea that's been running through my mind the last few months is how aging populations will impact the economy. Friedman doesn't get into this (he focuses on backward looking cultures, not age groups), but he does ask a question relevant to my concern: "Does your society have more memories than dreams or more dreams than memories?"

I've often wondered what will happen as the U.S. gets older. Will an aging population that has more years behind it than in front of it erect barriers or push for policies that will stymie economic growth in exchange for increased present comforts? Will a fear of change drive older Americans to restrict innovation or long term investments? Here is part of a great paragraph by Friedman:

In societies that have more memories than dreams, too many people are spending too many days looking backward. They see dignity, affirmation, and self worth not by mining the present but by chewing on the past. And even that is usually not a real past but an imagined and adorned past. Indeed, such societies focus all their imagination on making that ingrained past even more beautiful than it ever was, and then they cling to it like a rosary or a strand of worry beads, rather than imagining a better future and acting on that. It is dangerous enough when other countries go down that route; it would be disastrous for America to lose its bearing and move it that direction.
As the population ages, and as I hear about the "Good Old Days" more and more, I wonder whether or not America will move in this direction. I read an interview with the late management guru Peter Drucker where he said that the largest age group dominates the culture. As retirees come to dominate the culture, I fear that innovation and economic freedom could be restricted. I'm not so sure that Western Europe isn't already moving in that direction. So you could have a situation where the younger countries get flatter while the older countries start to unflatten. Time will tell.


Anonymous said...

I completely understand what you mean by Friedman's name dropping. He is an apologist for coporate globalization. I'm sure he doesnt have any "friends" among poor farmers commiting suicides, turning into construction site daily wage workers in India, since the advent of the globalzaition in 90's. Which is why we dont hear their voices, which forms the majority of the population (as per the Nobel winner Joseph Stiglitz that number equals about 800 million peopel!!!) left behind in the "progess and develoment" fold of globalization.

So, I would much rather the discourse on Globalization came from economists like Joesph Stiglitz (Nobel winner for economics and was Chief Economist at World Bank), Paul Krugman (Princeton), Pankaj Ghemawat (Harvard)etc. Ted Koppel interviews Friedman and Joseph Stiglitz, who ofcourse doesnt find a mention in Friedman's book.

Two books to read, which offer a counterperspective to Friedman's "The World is Flat."

The Harvard Professor, Pankaj Ghemawat's latest book, "Redefining Global Strategy," is more academically inclined. I read an article of his published in the journal, "Foreign Policy", where he argues that the world is, at best, only semi-globalized. His argument being that Cultural, Administrative, Geographic and Economic aspects of a nation come in the way of total globalization from taking place and cites examples of the same.

The other small, but interesting book, is by Aronica and Ramdoo, "The World is Flat? A Critical Analysis of Thomas Friedman's New York Times Bestseller." It is a small book compared to the 600 page tome by Friedman, and aimed at the common man and students alike. As popular as the book may be, some reviewers assert that by what it leaves out, Friedman's book is dangerous. The authors point to the fact that there isn't a single table or data footnote in Friedman's entire book. "Globalization is the greatest reorganization of the world since the Industrial Revolution," says Aronica. Aronica and Ramdoo conclude by listing over twenty action items that point the way forward, and they provide a comprehensive, yet concise, framework for understanding the critical issues of globalization.

You may want to see
and watch
for an interesting counterperspective on Friedman's
"The World is Flat".

Also a really interesting 6 min wake-up call: Shift Happens!

There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation

Matt said...

You're right on the data front. A few charts and tables would have made Friedman a more interesting read. Aside from his columns, I haven't read anything else of his. Friedman doesn't strike me as a big data geek, even though it would help him. I guess the story doesn't flow as nice with a table stuck in the middle.

I have no doubt there is better stuff out there on globalization. I may check Ghemawat. Right now one of my main interests is how institutions impact economic development, whether at the local or international level, and his work appears to be related.