The world is ever changing and has been that way even before humans dominated Earth. However, what we are interested in for this topic is in the last few decades where globalization has had an impact in the early 21st century, making the world "flat". The phrase that the world has become flat is a metaphor for viewing the world level in terms of commerce and competition, meaning a level playing field where everyone has an equal opportunity. However, opinions are divided on how much globalization has actually impacted the world as a whole. Critics argue that Friedman’s term "flat" is grossly exaggerated as his view is from an American perspective. This paper investigates major arguments for both sides. Arguments supporting the "flat world theory" come mainly from Friedman. His argument rests on the assumption of ten flatteners and a triple convergence. Friedman says that the power of new information technology has helped bring the world closer together and has made it more interconnected and interdependent (Friedman, 2005). More people now have access to this technological platform for education, innovation and entrepreneurship (Friedman, 2005). However, Florida (2005, p.51) argues that this flat playing field mainly affects the advanced countries, which see not only manufacturing work but also higher-end jobs. Other developing or undeveloped countries simply do not have the luxury of this connection and are left out of this technological platform. Florida (2005, p.51) contends that “...there are more insidious tensions among the world’s growing peaks, sinking valleys, and shifting hills”. This inequality is growing across the world and within countries. Friedman also talks about the ten flatteners such as workflow software, open sourcing, outsourcing, offshoring and supply chaining. Friedman (2005, p.35) claims that “these flatteners created the platform for collaboration that flattened the world even more”. This global collaboration boasts the increase in the levels of internationalization in the world today. Meaning more firms are internationalizing and doing business abroad. However, Ghemawat (2007, p.56-57) disputes this with his “10 Percent Presumption”. Ghemawat(2007, p.56-57) maintains that “most types of economic activity that could be conducted either within or across borders turn out to still be quite domestically concentrated”. The total amount of capital being invested in foreign direct investment (FDI) around the world has been less that 10 percent for the last three years for which data is available (2003-2005) (Ghemawat, 2007). This means that the sliding majority of investments are domestically based.
Off-shoring is the establishment of business operations outside national boundaries. The process of moving business outside these boundaries is to garner an advantage either through tax breaks, lower wages, lower transportation cost and/or relaxed regulations ("Offshore definition," 2014). Many firms either branch out as a horizontal multinational or vertical multinational. Horizontal multinational’s produce the same good or services as abroad. This foreign direct investment (FDI) is done to strategically place production closer to the target market. Doing this provides advantages surrounding transportation cost while enhancing learning associated with local needs. A vertical multinational is one that fragments a portion of its good to take advantage of lower cost (i.e. cheap labor). Markusen and Maskus found horizontal multinational replaces trade whereas, a vertical multinational positively correlates with trade (Markusen & Maskus, 2001).
Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-first Century. New York:
Constant change and a flat, global competitive market landscape were described by Thomas Friedman, author of The World is Flat, as triple convergence and was a result of the ten flatteners. Friedman also stated that in “Globalization 1.0, countries had to think globally. In Globalization 2.0, companies had to think globally to thrive, or at least survive. In Globalization 3.0, individuals have to think globally to thrive, or at least survive.” (Friedman, 2007) The concept of needing individuals to think globally and thrive in the market led Friedman to travel and report on various educational cultures across the world. Friedman was determined to find “the right stuff” to make the youth in future generations competitive globally.
The phrase: "the world is flat" can be interpreted in many ways. Basically what Friedman means by "flat" is "linked." The falling of trade and political barriers and technical advances have made it possible to do business, instantaneously with billions of other people around the world. It has allowed for parts of the world, which had previously been cut off, like China and India, to successfully compete in the world market. Thus, the playing field is being leveled, and no one nation has an advantage. Friedman could also refer to a "flat world" in a metaphorical sense. In a spherical earth you cannot see around the world and cannot recognize the opportunities far from where you live. If the world were flat you could see it all. There would be no barriers to get in your way. This is the equivalent to a smaller globe which allows one to reach far away opportunities.
We say that we are heading toward a more global economy because of the fact that competition in today’s markets is global. This means that corporations in the United States can compete in foreign markets and vice versa, therefore U.S. corporations and foreign corporations become interdependent and thrive off each other. This can have a good impact on the United States because it allows U.S. corporations to seek materials and labor outside of the U.S. in countries such as China, India, and Mexico, where workers are paid a lot less money than U.S. workers, thus allowing them to sell their products for significantly cheaper than if they were produced in the U.S.; however, the tradeoff is that many American workers in the industrial sector lose jobs due to this shift of labor to overseas. In the long run this will be beneficial for the U.S. and although some percentage of workers are losing work, new jobs in the services sector, in fields such as computer technology, telecommunications, and language skills are opening up and experiencing growth because of this change.
When the term “Globalization” is discussed, most academics, scholars, professionals and intellectuals attempt to define and interpret it in a summarized fashion. My main concern with this approach is that one cannot and should not define a process that altered decades of history and continues to, in less than 30 words. Global Shift is a book with remarkable insight. Peter Dicken rather than attempting to define the commonly misused word, explains Globalization in a clear and logical fashion, which interconnects numerous views. Dicken takes full advantage of his position to write and identify the imperative changes of political, economic, social, and technological dimensions of globalization.
(Bilton et al 1996:5) The process of globalization has certainly had many changing effects to the world we live in; it has also changed the way many factors operate. Globalization is said "to have transformed the structure and scale of human relationships that social, cultural, political, and economic processes now operate at a global scale with a consequent reduction in the significance of other geographical scales. "(The Dictionary of human geography 2004:315) Globalization has had both positive and negative effects on a local, national, international and global level. Globalization often brings benefits at one level which cause negative effects at another, these results and the scale at which they manifest are often uncertain and unpredictable.
Labor laws, wage disparities, intense competition and fluctuating currency values are the challenges that are making organizations worldwide to compete in marketplace with products requiring a great deal of labor, and it is now getting harder for some of these organizations to maintain employees abroad. As Mello (p. 610) mentioned that a greater percentage of United States workforces are moving their operations abroad to developing nations like China and leaving an increasing number of United States domestic workers without employment. The foreign markets for the products and services are not the only things enticing these organizations to enter these global marketplaces. There are other reasons these companies are joining the global market arenas. For example, the foreign labor markets, this has attracted interest in many organizations to expand globally (Gersten, 1991). The labor force growth rates in developing nations alone will continue expanding by approximately 700 million people by the year 2010, while the United States labor force will continue to grow by only 25 million. This shows that United States’ growth rate will drop and the opportunities for productivity growth rate will increase in developing countries.
Thomas Friedman delivers the definition of “The World is Flat” in the introduction to the book. Friedman states that flattening the world means “equalizing, because the flattening forces are empowering more and more individuals today to reach farther faster, deeper, and cheaper than ever before” (Friedman 9). Friedman also goes on to state that flattening is an “equalizing opportunity, by giving many more people the tools and ability to connect, compete, and collaborate.” This means that the everyone in the world has a level playing field to compete on because of tools that have been created to empower them. Everyone has the ability to connect, compete, and collaborate on a global scale which
The expression "globalization" is generally utilized as a part of business rings and matters of trade and profit to depict the expanding internationalization of businesses for merchandise and administrations, the budgetary framework, companies and commercial ventures, innovation, and rivalry. In the globalized economy, partitions and national points of confinement have liberally diminished with the departure of tangles to market access. Furthermore, there have been decreases in transaction expenses and layering of time and separation in global transactions.
...ll as private sectors have gone international with new ventures outside the country. These companies are generating revenue, though modest compared to their overall sales revenue, by deputing their expert personnel outside.
Over the last couple of years, the world has become increasingly globalized. After the cold war, all parts of the world were attracted to the process of globalization. The effect of globalization is uneven in different parts of the world and globalization suggests a world full of persistent cultural interaction and exchange, contacts and connection, mixture and movement. Different people view globalization in different ways. Some people feel it has done more good than harm, while others believe it has done more harm than good. This essay will give a deep intuitive understanding of globalization, world systems, and how globalization has affected society, culture, economics, and politics.
First of all, Friedman talks about the different levels of globalization. There are 3 different time periods in which the society has differed and changed, bringing us to where we are today. Globalization 1.0, which took place from 1492 to 1800, was the first step to making the world flatter. The coming to America, and the industrial drive that came along with this is what most characterized globalization 1.0. The industry drive was about things such as manpower and horsepower, and how well we could utilize these in the world market. This caused the world to “shrink” a little bit, and become flatter. With the discovery of a new world, it broadened the area in which business was conducted, but the commonality of rule and trade caused the distance to be spanned more frequently. I think Friedman’s notions regarding globalization 1.0 is very accurate. The world in our terms began in 1492 with the discovery of North America. Once the area began to be inhabited and settled, there was much more worldwide interaction. Communications and trade between the American colonies and England increased, and this began a more stable business of worldwide association. I believe that Friedman’s theory is true, because the discovery of a land across the ocean for th...
The process of globalization allows the global market to include products and services from all the companies around the world, including all the investments that is across national borders. Indeed, many American companies have taken their merchandise, manufacturing and services to invest in other countries. However, this has produced a negative effect in the global economy. The American companies
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.