I wish I had read the most up-to-date copy of this book. My edition was published in the mid-2000s and it starts out with a narrative on technological innovations that already seems a little outdated. However, the book goes on to explore broader themes of globalisation and offers some good insights and theories into why certain groups prosper and others do not. A worthwhile read.

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Dates 18 August 2013 – 27 September 2013
Time spent reading 13 hours, 10 minutes
Highlights 92
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  • Tomaz Nedeljko Tomaz Nedeljko

The Infosys campus is reached by a pockmarked road, with sacred cows, horse-drawn carts, and motorized rickshaws all jostling alongside our vans. Once you enter the gates of Infosys, though, you are in a different world. A massive resort-size swimming pool nestles amid boulders and manicured lawns, adjacent to a huge putting green. There are multiple restaurants and a fabulous health club.

Andrew Doran Andrew Doran

Brings back memories from my visit to the Infosys campus in Pune back in 2005. I never saw anyone using any of the fabulous leisure facilities and wondered how much they were just for show.

if you are an American, you better be good at the touchy-feely service stuff, because anything that can be digitized can be outsourced to either the smartest or the cheapest producer, or both.

Yes, in a wonderful kabalistic accident of dates, the Berlin Wall fell on 11/9.

Yes, in a wonderful kabalistic accident of dates, the Berlin Wall fell on 11/9.

And needless to say, it is much easier and more satisfying for them to work hard in Bangalore than to pack up and try to make a new start in America. In the flat world they can stay in India, make a decent salary, and not have to be away from families, friends, food, and culture. At the end of the day, these new jobs actually allow them to be more Indian.

Communism was a great system for making people equally poor.

But though Netscape may have been only a shooting star in commercial terms, what a star it was, and what a trail it left. "We were profitable almost from the start," said Barksdale. "Netscape was not a dot-com. We did not participate in the dot-com bubble. We started the dot-com bubble."

The first Web site Berners-Lee created (and therefore the first Web site ever) was at and was first put up on August 6, 1991.

Robert Annunziata, who lasted only a year as CEO, had a contract that the Corporate Library's Nell Minow once picked as the worst (from the point of view of shareholders) in the United States. Among other things, it included Annunziata's mother's first-class airfare to visit him once a month. It also included a signing bonus of two million shares of stock at $10 a share below market.

Andrew Doran Andrew Doran

Nice work if you can get it...


Andrew Doran Andrew Doran

Is this where the ‘boom!’ started?

Your distinctive competency-the thing that will build a moat around your company-will always be created, enhanced, or embodied in some proprietary algorithm or manufacturing process or software application. You can't get everything off the shelf or off the Web-if you could, your competition could, too.

And the terrorist geeks in al-Qaeda

Andrew Doran Andrew Doran

Grrr. Every time I read the term ‘Al-Quaeda’ I just think of this:

BitTorrent is a Web site that allows users to upload their own online music libraries and download other people's at the same time.

Andrew Doran Andrew Doran


as in the APAtCHy server, because they were patching all these fixes together.

Andrew Doran Andrew Doran

Apache web server.

If you were a smart, educated Indian, the only way you could fulfill your potential was by leaving the country and, ideally, going to America, where some twenty-five thousand graduates of India's top engineering schools have settled since 1953, greatly enriching America's knowledge pool thanks to their education, which was subsidized by Indian taxpayers.

To appreciate how important supply-chaining has become as a source of competitive advantage and profit in a flat world, think about this one fact: Wal-Mart today is the biggest retail company in the world, and it does not make a single thing. All it "makes" is a hyperefficient supply chain.

Every moming in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn't matter whether you are a lion or a gazelle. When the sun comes up, you better start running.

American Indians

Andrew Doran Andrew Doran

I thought the correct term was Native Americans?

The Indian IT industry got its footprint across the globe because ofY2K.

Ohio State University business professor Oded Shenkar, author of the book The Chinese Century, told BusinessWeek (December 6, 2004) that he gives it to American companies straight: "If you still make anything labor intensive, get out now rather than bleed to death. Shaving 5% here and there won't work."

"Making stuff-that's easy. Supply chain, now that is really hard."

Zara lives by the motto that it is more profitable to incur shortages than overstock, and then to respond to shortages with lightning speed so you are offering customers exactly what tl1ey want with much less risk of leftovers.

as it becomes harder and harder to forecast demand, good companies find ways to postpone adding value to their products until the last possible moment.

Working with the U.S. Customs Service, UPS designed a software program that allows customs to say to UPS, "I want to see any package moving through your Worldport hub that was sent from Cali, Colombia, to Miami by someone named Carlos." Or, "I want to see any package sent from Germany to the United States by someone named Osama." When the package arrives for sorting, the UPS computers will automatically route that package to a customs officer in the UPS hub.

On any given day, according to UPS, 2 percent of the world's GDP can be found in UPS delivery trucks or package cars.

Said Kurt Kuehn, UPS's senior vice president for sales and marketing, "The Texas machine parts guy is worried that the customer in Malaysia is a credit risk. We step in as a trusted broker. If we have control of that package, we can collect funds subject to acceptance and eliminate letters of credit. Trust can be created through personal relations or through systems and controls. If you don't have trust, you can rely on a shipper who does not turn [your package] over until he is paid. We have more ability than a bank to manage this, because we have the package and the ongoing relationship with the customer as collateral, so we have two points of leverage."

Andrew Doran Andrew Doran


There are companies today (many of them don't want their names mentioned) that never touch their own products anymore. UPS oversees the whole journey from factory to warehouse to customer to repair. It even collects the money from customers if need be.

Live your life honestly, because whatever you do, whatever mistakes you make, will be searchable one day.

'Always tell the truth,' said Mark Twain, 'that way you won't have to remember what you said.

Andrew Doran Andrew Doran

A rule to live by.

Let's say you are British Airways and you are flying a Boeing 777 across the Atlantic. Somewhere over Greenland, one of your Rolls-Royce engines gets hit with lightning. The passengers and pilots might be worried, but there is no need. Rolls-Royce is on the case. That Rolls-Royce engine is connected by transponder to a satellite and is beaming data about its condition and performance, at all times, down into a computer in Rolls-Royce's operations room. That is true of many Rolls-Royce airplane engines in operation.

Are national boundaries a source of friction we should want to preserve, or even can preserve, in a Rat world?

You know the "IT revolution" that the business press has been touting for the last twenty years? Sorry to tell you, but that was only the prologue. The last twenty years were just about forging, sharpening, and distributing all the new tools with which to collaborate and connect. Now the real IT revolution is about to begin, as all the complementarities between these tools start to really work together to level the playing field.

"ovarian lottery"

Andrew Doran Andrew Doran

Brilliant phrase. Your chances of success in life being massively influenced by this.

After all, al-Qaeda is a network

Andrew Doran Andrew Doran

Again, prove it! I’m a skeptic.

As you sort out and weigh your multiple identities-consumer, employee, citizen, taxpayer, shareholder-you have to decide: Do you prefer the Wal-Mart approach or the Costco approach? This is going to be an important political issue in a flat world: Just how flat do you want corporations to be when you factor in all your different identities? Because when you take the middleman out of business, when you totally flatten your supply chain, you also take a certain element of humanity out of life.

"We have grown addicted to our high salaries, and now we are really going to have to earn them,"

an Indian consulting firm won the contract to upgrade the unemployment department of the state of Indiana!

Who owns your bits when you die?

In the new middle, we are all temps now.

When you lose your job, the unemployment rate is not 5.2 percent; it's 100 percent.

Always remember: The Indians and Chinese are not racing us to the bottom. They are racing us to the top-and that is a good thing!

In sum, it was never good to be mediocre in your job, but in a world of walls, mediocrity could still earn you a decent wage. You could get by and then some. In a flatter world, you really do not want to be mediocre or lack any passion for what you do.

most jobs are not lost to outsourcing to India or China-most lost jobs are "outsourced to the past." That is, they get digitized and automated.

Simply providing more education is probably a good thing on balance, especially if a more educated labor force is a more flexible labor force that can cope more readily with non-routine tasks and occupational change. But it is far from a panacea ... In the future, how we educate our children may prove to be more important than how much we educate them.

You can't light the fire of passion in someone else if it doesn't burn in you to begin with.

Now that foreigners can do left-brain work cheaper, we in the U.S. must do right-brain work better.

This weekend there will be accountants painting watercolors in their garages. There will be lawyers writing screenplays. But I guarantee you that you won't find any sculptors who on weekends will be doing other people's taxes for fun.

If you wanted to summarize the net effect of all these institutions, cultural norms, business practices, and legal systems, it can be reduced to one word: trust. They create and inspire a high level of trust-and a high level of trust is the most important feature any open society can possess. Trust, in many ways, is the product of all the ingredients in America's secret sauce.

Andrew Doran Andrew Doran

I wonder what the long-term effects of the NSA revelations will be.

the company that provides ethics and governance advice for global corporations, which I will discuss in detail in Chapter 11

Andrew Doran Andrew Doran

Unfortunate sentence.

The thing that impresses him most about the Asian students, and the best American ones, he concluded, is their work ethic. "When a Chinese graduate student comes up to me in the lab and says, 'How do you work so hard?' that is the best compliment I can get."

In China today, Bill Gates is Britney Spears. In America today, Britney Spears is Britney Spears-and that is our problem.

Without any question the wealthiest school districts attracted the best teachers, principals, and curriculum planners, along with the most demanding parents and PTAs, while the poorest districts attracted the weakest teachers and principals and parents who had to work three jobs just to survive (leaving them with less time to help their kids with their homework). By contrast, other industrialized countries fund their schools according to what it will take to deliver a standard curriculum, and then they take the money out of the state's general budget.

he believed that the literacy of college graduates had dropped because a rising number of young Americans in recent years had spent their free time watching television and surfing the Internet. 'We're seeing substantial declines in reading for pleasure, and it's showing up in our literacy levels,' he said."

Many Americans can't believe they aren't qualified for high-paying jobs. I call this the "American Idol problem." If you've ever seen the reaction of contestants when Simon Cowell tells them they have no talent, they look at him in total disbelief.

My goal as an educator is to stop being the best local school, or regional school, and start being the best on the planet.

When your currency is the world's currency and every brain wants to come over and work in your backyard, you start to take things for granted.

The secret isn't just lower wages. It's also the attitude of workers who take pride and are willing to do what is necessary to succeed, even if it means outsourcing parts production or working on weekends or altering vacation schedule

Andrew Doran Andrew Doran

Is a culture of altering vacation schedules really what we should be aiming for?

Intel's chips are made from just two things—sand and brains

If there is a new social contract implicit between employers and employees today, it should be this: You give me your labor, and I will guarantee that as long as you work here, I will give you every opportunity-through either career advancement or training-to become more employable, more versatile.

Sometimes the best way to change the world is by getting the big players to do the right things for the wrong reasons, because waiting for them to do the right things for the right reasons can mean waiting forever.

economic growth and trade remain the best antipoverty program in the world.

we need a new generation of parents ready to administer tough love: There comes a time when you've got to put away the Game Boys, turn off the television, shut off the iPod, and get your kids down to work.

Education begins in a home where reading is intrinsically valuable and necessary; where recognition of the hard work associated with education and doing well in school are top priorities; and where parents join schools in having high expectations for their children's success. Without this initial foundation and continued support at home, a teacher's hands are tied at school.

It takes two days to start a business in Australia, but 203 days in Haiti and 215 days in the Democratic Republic of Congo

Here's something you probably didn't know: Ireland today is the richest country in the European Union after Luxembourg.

Andrew Doran Andrew Doran

And now we know how that ended up...

If you want to have a modern complex division of labor, you have to be able to put more trust in strangers.

"I was on the sixth floor of a hotel in New Delhi," he recalled, "and when I looked out the window I could see for miles. How come? Because you do not have assured power in Delhi for elevators, so there are not many tall buildings."

Why India had leaders who built institutes of technology and Pakistan had leaders who did not is a product of history, geography, and culture that I can only summarize as one of those intangible things.

"Even if you're on the right track, you'll get run over if you just sit there."

Managers elsewhere here boast about what little time they waste in meetings; Apple is big on them and proud of it.

Howard Schultz, the founder and chairman of Starbucks, says that Starbucks estimates that it is possible to make nineteen thousand variations of coffee on the basis of the menus posted at any Starbucks outlet.

Andrew Doran Andrew Doran

Why would this need to be an estimate?

To help the villagers (many of them illiterate) express themselves, HP used a concept called graphic facilitation, whereby when people voiced their dreams and aspirations, a visual artist whom HP brought over from the United States drew images of those aspirations on craft paper put up on the walls around the room.

The best companies are the best collaborators. In the flat world, more and more business will be done through collaborations within and between companies, for a very simple reason: The next layers of value creation-whether in technology, marketing, biomedicine, or manufacturing-are becoming so complex that no single firm or department is going to be able to master them alone.

"The most important health-care system in the world is a mother," said Klausner. "How do you get things in her hands that she understands and can afford and can use? When we think about health problems in the developing world, the men are almost invisible, except as a source of part of the problem. It is all about the women."

They are actually making their customers their employees and having them pay the company for that pleasure at the same time!

Andrew Doran Andrew Doran

Reminds me of Nandos and Wagamamas where they have made the fact that 'the meals for people in your group will arrive separately' into a feature!

The deal called for HP to implement and manage a core banking system across 750 Bank oflndia branches.

Andrew Doran Andrew Doran

Bank of India outsourced their core banking operations to HP. Crikey.

the word "outsourcing" should really be retired. The applicable word is really "sourcing."

Without trust, there can also be no flat world, because it is trust that allows us to take down walls, remove barriers, and eliminate friction at borders.

It has always been my view that terrorism is not spawned by the poverty of money. It is spawned by the poverty of dignity.

I am confident that this flattening phase of globalization is not going to mean more Americanization, but more globalization of local cultures, art forms, styles, recipes, literature, videos, and opinions—more and more local content made global.

He asked why it is that Muslim scholars and clerics eagerly supported fatwas condemning Salman Rushdie to death for writing an allegedly blasphemous novel, The Satanic Verses, that wove in themes about the Prophet Muhammad, but to this day no Muslim cleric has issued a fatwa condemning Osama bin Laden for murdering three thousancl innocent civilians.

The iron law of globalization is very simple: If you think it is all good, or you think it is all bad, you don't get it. Globalization has empowering and disempowering, homogenizing and particularizing, democratizing and authoritarian tendencies all built into it.

It is just a small hint of the potential struggle for power-energy power-that could ensue if the Great American Dream and the Great Chinese Dream and the Great Indian Dream and the Great Russian Dream come to be seen as mutually exclusive in energy terms.

"On the average, each citizen of the U.S., Western Europe and Japan consumes 32 times more resources, such as fossil fuels, and puts out 32 times more waste, than do inhabitants of the Third World. But low impact people are becoming high impact people."

I visited with the management team at Dell near Austin, Texas. I shared with them the ideas in this book and in retum I asked for one favor: I asked them to trace for me the entire global supply chain that assembled the pieces that built the laptop that wrote the book. Yes, I wanted to know every part that went into my Dell notebook, what country it came from, and, if possible, the names of the people who put it together along the way. Here is what I found out.

Andrew Doran Andrew Doran


during my travels, I noticed that no two countries that both had McDonald's had ever fought a war against each other since each got its McDonald's.

Those of us who are fortunate to live in free and progressive societies have to set an example. We have to be the best global citizens we can be. We cannot retreat from the world. We have to make sure that we get the best of our own imaginations—and never let our imaginations get the best of us.

Those of us who are fortunate to live in free and progressive societies have to set an example. We have to be the best global citizens we can be. We cannot retreat from the world. We have to make sure that we get the best of our own imaginations—and never let our imaginations get the best of us.

Conspiracy theories are like a drug that goes right into your bloodstream, enabling you to see "the Light." And the Internet is the needle. Young people used to have to take LSD to escape. Now they just go online. Now you don't shoot up, you download. You download the precise point of view that speaks to all your own biases.

Damien Ryan Damien Ryan

Ah, the good old echo chamber.

Emily Phillips Emily Phillips

This quote speaks to two things for me: 1. The inherent danger in how easy it is to choose information sources (i.e. media outlets) that speak to what you want to hear. And this is not always intentional, or even in your control (i.e. targeting online advertising). It is also a chore to listen to people you don't agree with - and come on, who likes chores? 2. I once heard a take on conspiracy theories that I really liked. The speaker stated that "conspiracy theories undermine democracy." She went on to explain that in her view, in order to have a democratic society, you need an educated voter base with access to information to make decisions. If this information is incomplete - hidden from view - then it undermines the whole project. If you follow conspiracy theories, then this points to an underlying cynicism, a belief that belies a distrust in those disseminators of information that are themselves vital to a democratic society. Then again - could conspiracy theories be considered a sign of a healthy democracy? That people feel comfortable and confident enough (i.e. safe enough) to voice these opinions and question the system?

Andrew Doran Andrew Doran

Great stuff! The confirmation bias angle is covered quite well in ‘The Information Diet’ by Clay Johnson that I read some time back. As much as I understand this and know it to be true you will not get me reading news sources such as The Daily Mail as I find them just too abhorrent—tatty, right wing news dressed up as quality reporting. Is it right or wrong for me to avoid them? Your point on conspiracy theories is really interesting. I think that as long as you are questioning what you are told in terms of who is benefitting from the ‘official’ story or the so-called ‘conspiracy theory’ then you can make up you own mind. A tweet from Jeremy Bowen, a BBC reporter, was the first occasion that I saw someone question who benefitted from the recent chemical attacks in Syria; like a lot of other people on the day I had just assumed it was Assad’s forces and his tweet reminded me to keep an open mind. Having different points of view and weighing up evidence and facts seems democratic to me. One of the most powerful examples I have seen of both confirmation biases and conspiracy theories is the part in Adam Curtis’ amazing documentary ‘The Power of Nightmares’. He explains about the neoconservatives in the US in the 1970s who were monitoring the Atlantic for sonar pings from Soviet submarines. They didn’t find any pings, and their conclusion was that this was because the Soviets had developed submarine technology that made them undetectable! See here and search for ‘submarine’:

When memories exceed dreams, the end is near. The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh.

This is the real reason, in my view, that so many people in the world dislike President Bush so intensely. They feel that he has taken away something very dear to them-an America that exports hope, not fear.

Without taxation, there is no representation. The rulers don't really have to pay attention to the people or explain how they are spending their money-because they have not raised that money through taxes. That is why countries focused on tapping their oil wells always have weak or nonexistent institutions.