”Not a Flat World”- Hope and Frustration: How to Understand It?

Globalization has bound people, countries and markets closer than ever. Ideas will spread faster, leaping borders. Poor countries will have immediate access to information that was once restricted to the industrial world and traveled only slowly, if at all, beyond it. Entire electorates will learn things that once only a few bureaucrats knew.

Small companies will offer services that previously only giants could provide. In all these ways, the communications revolution is profoundly democratic and liberating, leveling the imbalance between large and small, rich and poor. We seem to live in a world that is no longer a collection of isolated, “local” nations, effectively separated by high tariff walls, poor communications networks, and mutual suspicion. It’s a world that is increasingly wired, informed, and, well, “flat.” [1]

The few cities that dominate international financial activity — Frankfurt, Hong Kong, London, New York — are at the height of modern global integration; which is to say, they are all relatively well connected with one another. But when examining the numbers, the picture is one of extreme connectivity at the local level, not a flat world. Most types of economic activity that could be conducted either within or across borders turn out to still be quite domestically concentrated.[2]

One favorite mantra from globalization champions is how “investment knows no boundaries.” The fact is, the total amount of the world’s capital formation that is generated from foreign direct investment has been less than 10 percent for the last three years for which data are available (2003–05).[3] In other words, more than 90 percent of the fixed investment around the world is still domestic.

Communications technologies have improved dramatically during the past 100 years. And the Internet itself is just one of many newer forms of connectivity that have progressed several times faster than plain old telephone service. This pace of improvement has inspired excited proclamations about the pace of global integration. The success of the Indian IT industry is not exempt from political and geographic constraints. The country of origin matters — even for capital, which is often considered stateless.

Friedman cites Nandan Nilekani, the CEO of the second-largest such firm, Infosys, as his muse for the notion of a flat world. But what Nilekani has pointed out privately is that while Indian software programmers can now serve the United States from India, access is assured, in part, by U.S. capital being invested — quite literally — in that outcome. [4]

Even Thomas Friedman, who popularized the “flat world” theory, admits towards the end of his best-selling book The World Is Flat that the world, in fact, is not flat. For instance, Friedman singles out the fall of the Berlin Wall as an alleged “flattener” because that event supposedly allowed people to see the world differently, to “tap into one another’s knowledge pools.”[5]

Friedman cites the Google search engine as another “flattener” because the company claims it wants everyone in the world to have access to all of the world’s knowledge, in every language. In fact, Friedman himself seems to be backing off the “flat world” idea, writing recently in the New York Times about a

“terrible trend emerging in the world today… a widespread religious and sectarian cleavage.”[6]

It is critical, he notes, that the U.S. stands by its principles of free trade and

“welcoming the world to do business in our land, as long as there is no security threat. If we start exporting fear instead of hope, we are going to import everyone else’s fears right back.”[7]

Friedman begins the book by proclaiming that the world is flat, and he finally offers the antithesis:

I know that the world is not flat. Don’t worry. I know.”

Like most books describing purported revolutions, The World is Flat vacillates between whether the flat world revolution is a fait accompli or an ongoing process.[8] It is a question of whether the world is flat, or whether it is flattening.  This tension is evident in Friedman’s qualified statement that:

“…the flattening of the world is largely (but not entirely) unstoppable”[9]

Cambridge Journal of Regions, Economic and Society confirms that Friedman is wrong to equate the emergence of a world of increasing interconnectedness with a ‘flat’ global economy and the empirical evidence does not in any case back up the idea that the global economy is becoming flat. [10]


[1] Why the world isn’t flat http://www.foreignpolicy.com/articles/2007/02/14/why_the_world_isnt_flat?page=0,1

[2] Why the world isn’t flat http://www.foreignpolicy.com/articles/2007/02/14/why_the_world_isnt_flat?page=0,1

[3]Why the world isn’t flat http://www.foreignpolicy.com/articles/2007/02/14/why_the_world_isnt_flat?page=0,1

[4]Why the world isn’t flat http://www.foreignpolicy.com/articles/2007/02/14/why_the_world_isnt_flat?page=0,1

[5] Logistically Speaking: It’s a round world after all http://mhlnews.com/global-supply-chain/logistically-speaking-its-round-world-after-all

[6] Logistically Speaking: It’s a round world after all http://mhlnews.com/global-supply-chain/logistically-speaking-its-round-world-after-all

[7]Logistically Speaking: It’s a round world after all http://mhlnews.com/global-supply-chain/logistically-speaking-its-round-world-after-all

[8] Geopolitics and the Flat World. In: Friedman T.L. 2002. The World is Flat. Brief History of the Globalized Worls in the Twenty-first Century. Alan Lane an imprint of Penguin books, London, page 460

[9] Geopolitics and the Flat World. In: Friedman T.L. 2002. The World is Flat. Brief History of the Globalized Worls in the Twenty-first Century. Alan Lane an imprint of Penguin books, London, page 276

[10] http://cjres.oxfordjournals.org/content/1/3/343.full

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