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The Book of The Century (So Far)

Like almost everyone else I know, I’d been meaning to read Thomas Friedman’s The World is Flat: A Brief History of the Twenty-First Century.  Once my friend and critic Susan Spaulding gave me a copy, I had to get down to it.  Susan was right: I had a lot to learn even though I’d blogged a series called The Flattening of Everything.

The premise isn’t startling: technology and the companies that have run with the technology like Dell and Microsoft and Google and Wal-Mart and Netscape (personally I give credit to Mosaic and Marc Andreessen rather than the company but it’s not my book) have flattened the world.  National boundaries are no longer the economic impediment they once were.  Jobs flow with much less friction to where they’re most efficiently done.  One consequence is the enormous economic growth in India and China as they weave their way into the global supply chains of the multinationals.  Another consequence is a widening gap between haves and have-nots.   A third consequence is the end of jobs security as we might have known it.

Friedman’s genius is that he gives names to things we knew but had no words for.  Then he adds things we didn’t know but should’ve.  Finally he adds true insights.  His faults are few but there are some.  He uses H-P as a favorable example too often given its recent lack of success.  Some of his oft-quoted sources have made a name for themselves more as oft-quoted sources than as doers (maybe I’m just jealous).  Sometimes he’s a little too gee-whiz.  The world’s changed before.  But the faults pale next to the strengths of the book.

Here’s one story that floored me:

We all know that some jobs are being outsourced.  Customer support is the most cited example.  Then there’s programming.  The only reason we pay outrageous prices to have technicians in the US analyze our medical lab test results is state licensing laws for technicians.  OK, but taking orders at a McDonald’s drive-through windows, that’s location dependent, right? Like plumbing, right?  No, wrong!

Friedman tells the story of how drive-through orders at the McDonald’s in Cape Girardeau, Missouri – you know the one, just off I55 – go to a call center in Colorado Springs, Colorado for processing between the time you shout at the microphone and the time you drive to the pickup window.  Why not?  Once your order became electronic at the microphone, it doesn’t cost significantly more to send it to Colorado than straight to the local kitchen.  Along with the order goes a digital picture of your car.  When you get to the pickup window, you get what you ordered – not close to what you ordered and not what the car in front of you or the car behind you ordered.

The order takers in Colorado are really good; they don’t make mistakes.  They are paid 40 cents more an hour than the average MacDonald’s  employee.  It costs the franchise owner in Missouri more per order to use them than to use his own employees.  But, with mistakes greatly reduced, the drive-throughs handle thirty more cars per hour.  That’s real money not even considering customer satisfaction.

Friedman’s point is that almost any job – no matter how local it seems – can be decomposed into at least some parts that can be outsourced for greater efficiency – AND better customer service.  No one in Bangalore is gonna fix my plugged pipes on the Jersey Shore; but maybe, if the plumber here were scheduled by someone there, we’d know when he was gonna come.  (This is theoretical, of course, I have a great plumber and am dependent on him.)

And the price of communication has nowhere to go but down.  Just like the price of computing.  So the world just gets flatter and flatter.

I intend to blog more about this book unless a lot of you post comments saying “we’ve already read it, cut it out.”

My posts about flattening are here, here, and here.

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» Book of the Century from Vy Blog
I have the Tom Friedman book on my list and just haven't read it yet. I love Evslin's posts about it and want him to keep blogging about it. (Interesting that the McDonald's he talks about is one in my [Read More]

» More on the Book of the Century from Vy Blog
I blogged the other day about Tom Friedman's book, The World is Flat. (And like an idiot I forgot to link to Tom Evslin's good post about it.) I mentioned that the McDonald's referenced in the book is in my [Read More]

» ON TRUST IN A "FLAT WORLD" from *michael parekh on IT*
JUST A LITTLE MORE TRUST A personal custom of mine going into the New Year's holidays, is to take one of the books I've read over the course of the year, for a closer re-read. It sometimes makes for new discoveries in a familiar favorite. This year's r... [Read More]

» ON TRUST IN A "FLAT WORLD" from *michael parekh on IT*
JUST A LITTLE MORE TRUST A personal custom of mine going into the New Year's holidays, is to take one of the books I've read over the course of the year, for a closer re-read. It sometimes makes for new discoveries in a familiar favorite. This year's r... [Read More]

Comments

Fenton

(I say all of this with the utmost respect, and having read your blog for months now.)

I want you to make a post about what you would say to people over 40 who have lost their jobs to outsourcing. I'd like even more for you to actually go around to people who have lost their jobs to outsourcing and say it directly to them.

*I* agree that outsourcing is a wonderful thing, but only because I directly benefit from it. I'm young, over-educated and am prepared to be fired at any moment because I've known my entire life that three people doing my job in India or even Alabama is cheaper than paying me to do it alone.

Not many people whose jobs get outsourced are that lucky, and we don't have any real safety net for them. We can't tell 50 year olds in factories that, "It's your fault. You should have prepared" because they *did* prepare. They prepared for the world that everyone told them to prepare for: lifetime employment, a good pension, and enough money to send their kids to school.

I would be much more inclined to push even more support towards outsourcing initiatives if I could say, to their face, that it was their fault. If I could tell them that they were either not good enough, smart enough, or determined enough to make it in America, then I would. I can't though because that's not the problem. I also can't tell them that they just had bad luck, when outsourcing support and industrial/structural economic change welfare is a big political "NO" to the people who would write pro-outsourcing legislation.

I can't say any of that to someone's face. If you can, more power to you because you're tougher than I am. If the lowering of prices on consumer goods that comes from outsourcing is at least as high on an individual basis, then we could use that as an argument as to why it's better to lose your job than not to support outsourcing. If not, then there's still no benefit for the people over 30 that it's affecting right now.

Mike B

Is this review a joke? This is one of the dumbest books of the century. When I started reading your post, Tom, I thought that this was a saracastic posting. I guess not.

Read this review:

http://nypress.com/18/16/news&columns/taibbi.cfm

ellen

I don't know why everyone thinks outsourcing is so great? When the Boston Gas Company became Keyspan their service company became a separate entity. If you need service, you call and someone in New Jersey covers the Boston calls. In January, we had an elderly no heat situation. A guy was sent and stayed 2 hours and sald we needed some part and someone would call back to tell me when it would be installed. 6 hours later, no call. I made 20 calls and I finally got the Boston number where the service guy came from. I was informed that the part would take 7 days to order. I found a part at a heating distributor 5 minutes away. I called the service part of the gas company back. They had to buy the part or they would not install it and they don't buy from that particular vendor. They must order their parts from overseas if it was going to take 7 days.
In frustration, I called an independent boilerman. He came over and found that the part was not needed, because a ball had fallen down in the gas meter and stopped the flow of gas. This time the Keyspan man was called and not the service arm of the gas company and she fixed the problem. The house was without heat for almost 12 hours, but it would have been alot worse if I waited for the call back from the service company from New jersey. To make matters worse no one refunded the $200 for the faulty diagnosis.


I hate outsourcing

Jeremy

this is a good review as well
http://www.nybooks.com/articles/18154

its not that I don't think technology can heolp with some things... imagine if your plumber had is diary on the internet with an XML feed to tell you when he was arriving or going to be late? or the McD's menu on the internet and you could order with a 3G phone? but the communications revolution is no more profund than the telegraph etc.. its all relative to where we are today

Jeremy

this is a good review as well
http://www.nybooks.com/articles/18154

its not that I don't think technology can heolp with some things... imagine if your plumber had is diary on the internet with an XML feed to tell you when he was arriving or going to be late? or the McD's menu on the internet and you could order with a 3G phone? but the communications revolution is no more profund than the telegraph etc.. its all relative to where we are today

Jeremy

Tom I really like your blog and think the comments in it have a lot of credibility. But to be honest Tom Friedman is not a good economist (although he is still a better economist than jounralist) and his ideas lack any sort of emprical validation and often common sense. The Lexus and The Olive Tree is possibly one of the worst economics books alive.

Agreed customer service can be improved with outsourcing and dissagregation. But this isn't making the world 'flatter'. As Dell has recently found out there is significant room for a company to disappoint customers with this technology, I too returned a Dell and had the worst customer serrvice experience of my life with their Indian call centre. Some of this change Friedman advocates is change for change sake with no discernible economic value.

Abby

I still think that the title is kind of silly. If the world were flat, rather than round, the distances would be greater.

Here's my concern about centralization. Nowadays 411 information services are located thousands of miles away, and the person answering the phone can't tell me anything that smartpages will give me after a quick search.

15 or 20 years ago the operator was local and actually knew something. I could call and ask for the police department and not be sure of the exact address (but I knew that it was the branch near the school with the red roof, or whatever), and the battle axe at the other end of the line knew exactly what I was talking about and was able to help me. Now that person is in Utah and knows nothing. I don't call information anymore, because it's useless, but I often waste a lot of time trying to get the information I need.

Yali Friedman

I think your point about centralizing work stateside is an important point that often gets less press attention than offshoring. It is, in fact, an effective means to protect American workers and combat outsourcing of industries.
We're witnessing the reshuffling of biotechnology clusters into a 'hub and node' distribution. Essentially, as the barriers to long distance communication have fallen, the need for proximity has diminished as well. This is leading to a distributed infrastructure, with regions developing niche specialities instead of the soup-to-nuts approach that was once prototypical of drug development regions (and, interestingly, drug companies as well). We've posted a white paper on this topic at http://www.bioeconomy.org/pubs/hubsandnodes.pdf

Ben Casnocha

Tom, if he like his writing style,it can be a fun read. Check out this critical, serious review:

http://bigben.blogs.com/first/2005/08/the_world_is_ro.html

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