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Today, to welcome to MIT

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Thomas Friedman

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Who, as you know, is the foreigner affair columnist for the New York Times.

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I will admit up front

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that it¡¦s one of the few columns I read with great regularity,

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finding the content always stimulating, whether or not I agree with one hundred percent.

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But, as I told him earlier today,

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his titles are the best in the world.

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Anybody who could write ¡LDancing Alone¡², or ¡LLast Week Broccoli¡²,

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all of which enables you to remember Brusell Sprout.

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Whatever, broccoli would be better!

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I think, as you know, he has won 3 Pulitzer prizes,

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3 books that all of us know very well:

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¡§From Beirut to Jerusalem¡¨,

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¡LThe Lexus and the Olive Tree¡², which I remember Alex Darvel always introduce me to a couple years ago,

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little more recently, ¡LLongitudes and Latitudes¡².

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He¡¦s a graduate of our neighboring institution, Brandeis University in Mediterranean studies,

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and then got a master degree in Middle East studies at Oxford University.

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So, the reason he¡¦s here today,

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I¡¦m gonna tell you the truth.

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I was in a hotel somewhere rather late at night,

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doing what I usually do in hotel: lying in bed, flipping through channels,

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and I came across the last few minutes of the Charlie Rose Show

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and Charlie was interviewing Tom. They are having a great discussion.

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He¡¦s there talking about all his flatteners. I¡¦m listening

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and, all a sudden, I recognized with a startle

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that here is a really important, powerful public voice,

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in a very articulate manner,

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speaking the things that are very important to us here at MIT,

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things such as the values of openness,

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and things such as the importance of science and technology.

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And the importance of young men and  women being educated in these fields, to the future of this country.

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In addition, of course,

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to the fundamental hypothesis, a fundamental notion

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of helping us to understand a little more clearly, some of the most important trends going on in the world.

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He was, of course, discussing his new book, ¡LThe World Is Flat¡²,

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which is in its second week, I guess, number 1 on the New York bestseller list.

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So, in just a moment, 	Tom is going to address us.

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He is going to take a little Q&A at the end of that.

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We¡¦ll cut the things off just about 5¡¦o clock

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but there after starting at 5:15,

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there will be a reception.  I don¡¦t know how many people¡¦s food was planned for,

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and the book signing downstairs in the Bush room, 10-105.

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Tom. welcome to MIT!

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(Friedman)Thank you very much, thank you.

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Chuck, thank you very much for having me.  It¡¦s a treat and an honor to be here.

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I had an enormously stimulating day already.

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So, I look forward to this conversation.

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Thank you also for giving my book titles right.

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You know, I¡¦ve often been introduced to author of ¡LFrom Beirut to Lebanon¡²,

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¡LThe Lexus and the Palm Tree¡², that¡¦s a popular one,

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And ¡LLatitudes and Attitudes¡². It¡¦s not a Jimmy Buffett¡¦s song.

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And thank you also for noting that my book ascended to number 1 this week in the New York Times bestsellers list.

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I finally made ahead of Jane Fonda,

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Because I was going to retitle my book ¡LFlat World, Flat Abs¡² if I did not grow up so.

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But I made it, so.

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I thought I¡¦ll talk for the next 30 minutes or so, of just the origins of this book,

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the accidental way it came about,

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and give you a sense of the core piece and really look forward to a dialog.

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This book really was an accident.

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For those of you who read my column know that really, I became the front columnist in January 1995

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Between 1995 to Sep 10th 2001,

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my column really oscillated between what I would call ¡LLexus issues¡² and ¡LOlive Tree issues¡²¡¦

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issues about trades, technology, finance,

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Many issues about geopolitics and ethnic conflicts.

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And I was really in that kind of oscillation mode, I say, right up until September 11.

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When I read of what happened that day, I really dropped the whole Lexus story like a stone

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and went off and cover the Olive tree wars.

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I really spent 3 years after 911, traveling almost exclusively in the area of Muslim world,

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trying to understand the roots of 911, and covering the war in Afghanistan and in Iraq,

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and I was really in that mode right up to last January, January of 2004, about 16 months ago,

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when I started doing documentary recently for the Discovery channel. We¡¦ve done one on the roots of 911.

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We did one on the wall that Israel built in the West Bank.

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And in January of 2004, we¡¦re sitting around with our Discovery-New York Times team,

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trying to figure out what to do our next documentary on.

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And at the time, the issue of America¡¦s standing in the world; the America¡¦s low stand in the world was a very hot issue.

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And so I had this idea, I said, ¡§Why don¡¦t we¡K
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why don¡¦t we go to call centers all over the world

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and interview young people who spend their days imitating Americans

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on what they think of America?¡¨

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I thought I make a fun kind, almost double mirror,

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and we are literarily budgeting that show 

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when a certain presidential democratic hopeful named John Kerry 

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came on with his blast against Benedict Arnold executives who outsource.

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Suddenly, it recalls the whole issue of outsource. It just exploded onto the world stage,

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and onto the front page of the Business Week, on Fortune, on Forbes, and the New York Times, and on the Wall street Journal.

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So, I said, you know, ¡§Time out.

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Why don¡¦t we just go to Bangalore, the outsourcing capital of India

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and the Silicon Valley of India, and do a documentary called ¡¥The Other Side of Outsourcing¡¦

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where we look at these phenomena from the ground up?¡¨

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And that¡¦s what we did.

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And so on February 15th of 2004, I set off to Bangalore with our Discovery crew

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and we shot about 60 hours of interviews, in a course of 10 to 11 days.

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And over the course of those 60 hours of interviews, I got progressively sicker and sicker.

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It was not the food.

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It was a sense I got with each passing interview,

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that while I had been sleeping,

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while I had been off covering the 911 wars,

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something really big had happened, in this globalization story.

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And I had completely missed it.

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That thought hit me somewhere between the interview with the Indian entrepreneur who wanted to do my taxes from Bangalore,

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and the one who wanted to write my new software from Bangalore, and the one who want to read my X-rays from Bangalore, and the ones who want to trace my lost luggage on Delta Airlines from Bangalore,

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that while I had been sleeping, something really big had happened, and I couldn¡¦t explain it.

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In fact, I wish I could show you the outtakes of the interviews.

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You¡¦d be sitting across the table from Jerry Rao, who owns a company called Mphasis.  It¡¦s a part of a group that done 400,000 American tax returns from India last year.

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And I say to him, ¡§Jerry, what happened? I missed something!

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How can you be doing this?

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What happened?¡¨

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Well,  the last interview we did was with a friend of mine, Nandan Nilekani, who headed Infosys, the CEO of Infosys, which is one of the premier Indian high tech companies.

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Nandan and I were sitting on the couch outside his office before the filming began.

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I was doing a kind of pre-interview with him.

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And one point he said to me: ¡LTom, I¡¦ve got to tell you.

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The global economic playing field is being leveled.

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The global economic playing field is being leveled

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and you Americans are not ready.¡¨

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Oh, I wrote that down in my little notebook:

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The global economic playing field is being leveled.

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Well, after the interview I got in my jeep, and went back to my hotel.

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The whole time back in that ride, I kept rolling over in my head what Nandan had said: 

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¡§The global economic playing field is being leveled.¡¨ And finally it occurred to me what Nandan was saying was that the global economic playing field is being flattened.

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And then, then I thought of this book.

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I said to myself, ¡§Oh, my God, he¡¦s telling me the world is flat.

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He¡¦s telling me the world is flat, and he¡¦s citing this as a great achievement in human development

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that we¡¦ve made the world flat.¡¨

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Well, when I went back to my hotel, I called my wife.

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This is exactly how it happened. I said: ¡LHoney, I¡¦m gonna write a book called ¡¥The World Is Flat¡¦.¡²

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She thought I was stark raving mad.

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But I came home. I called the publisher in New York Times, and my boss Gail Collins, the editor of page.

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¡§Gail, I¡¦ve gotta go on leave.

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I¡¦ve gotta go on leave immediately

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because my software needs updating.
The framework through which I'm analyzing foreign affairs needs updating.

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I am seeing things out there, I cannot understand and explain.

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If I don't go on leave immediately, I¡¦m gonna write something really stupid in the New York Times.¡¨

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It's a great way to get a leave, I have to say.

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Very hard to say no.

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So we worked it out basically

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and I eventually got three months¡¦ leave.

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And during that time, basically,

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between March 15th and December 15th,

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in a complete frenzy, obsession, really,

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I wrote this book.

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Let me just go through the first three chapters very quickly

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The first chapter is called, I think it appropriately enough: ¡§While You Were Sleeping¡¨.

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And I begin the book by noting that Christopher Columbus set sail in 1492 looking for a shorter route to India

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That's where Columbus was going in 1492.

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There the Muslim powers of that day had blocked the overland routes,

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and he didn't want to go around the Horn of Africa, so Columbus sailed west.

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He had the Nina, the Pinta, the Santa Maria.

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He never did find India,

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but he called the people he ran into Indians, and we call them that till this day.

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And he came home and told his wife, "Honey, I've accidentally discovered the world is round."

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I set off for India 512 years later.

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I knew just which direction I was going.

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I sailed east.

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I had Lufthansa business class

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and a GPS satellite that popped up in my seat told me exactly where I was,

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and I came home and told my wife, "Honey, I've accidentally discovered the world is flat."

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And the first chapter really goes through all the encounters I had in India

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that led me to this conclusion.

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But unlike Columbus, I kept going east.

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I next went to Dalian in China,

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the capital of outsourcing for Japan.

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This town, a major town in northeast China

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where thousands upon thousands of Japanese-speaking Chinese

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are now running the backrooms, writing the software and doing the business processing for major Japanese multinationals and major American multinationals formerly based in Tokyo.

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Let me repeat that, in case you misheard me, ok?

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¡Kin light of the recent headlines in China.

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Tens of thousands of Japanese-speaking Chinese

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are today running the backrooms of major Japanese multinationals from Dalian

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where it is now a requirement in many universities that you study two years of Japanese

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in order to have access to this incredibly burgeoning market of outsourcing from Japan.

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And then I kept going east, and I went to Colorado.

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And I really went east.

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And I called Jet Blue one day to make an airline reservation.

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I was really doing a little bit of research.

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And I got a rather elderly sounding woman on the phone. She was very friendly

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and I asked her if Jet Blue flew from Washington to Atlanta.

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She said, no, they didn't.

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Finally I said, "Madam, could I ask you your name?"

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And she said, "My name is Betty."

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And I said, "Betty, could I ask you where you are right now?"

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She said, "Honey, I'm in my slippers up in my bedroom, looking out of the most beautiful scene of Salt Lake City, Utah."

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Because Jet Blue has created a complete home reservation system.


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Jet Blue was founded by David Neeleman, a devout Mormon

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who believes that families would be held together better if one of the spouses works at home 

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and so he created a complete home reservation system

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that¡¦s manned largely by retiree and housewives in Salt Lake City, Utah.

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So if you call Jet Blue for reservation, you could get Betty in her bedroom.

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You might get Bob in the basement, You might get Sue out by the hot tub on her laptop

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but that's who will make your Jet Blue reservation.

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And then I kept moving east.

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I got all the way to Washington. D. C.. I picked up the Washington Post one day.

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They had a remarkable story about a pilot project begun by McDonald¡¦s

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where if you drive up to McDonald¡¦s now, at certain locales you drive up to the driving window

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and you order 6 Big Mac, 6 milk shake and 18 fries for the kids.

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You are not actually speaking to that McDonald¡¦s.
You are speaking out to McDonald¡¦s call center in Colorado Springs

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that's taking down your order and taking your picture

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and then zapping your picture and your order electronically back to that McDonald¡¦s

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where your picture and order are matched up when you drive up to the driving window.

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So the world is being flattened

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in all kinds of ways that a lot of us aren't fully aware of.
I certainly was not aware of it when I started this project.

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That sort of brings me to the kind of metathesis of the book which is the end of the first chapter.

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Basically what I am arguing there is that, there've been 3 great era of globalization, I would argue.

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The first era, try to call globalization 1.0,

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lasted from, while I would say, 1492 until the early 1800s.

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Say, 1820 was the beginning of global arbitrage.

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The first era of globalization 1.0 really shrank the world from a size large to a size medium.

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That era of globalization was really spearheaded by countries globalizing.

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You went global through your country.

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Whether it¡¦s Spain exploring the new world, Portugal East Asia, Britain colonizing India,

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it was countries going global for reasons of imperialism, power, natural resources,

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but the dynamic agent of globalization in that era

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was really the country.

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The second great era of globalization, globalization 2.0,

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I would argue, was from early 1800s until the year 2000. It just ended.

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And that era of globalization shrank the world from size medium to size small.

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And that era of globalization, I would argue, was spearheaded by companies globalizing,

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multinationals globalizing for markets and for labor.

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And in that era of globalization, you went global through your company.

220
00:16:53,767 --> 00:16:58,395
The company was the dynamic agent of that era of globalization.

221
00:16:59,562 --> 00:17:03,230
What I am trying to argue in this book is: while you were sleeping,

222
00:17:03,265 --> 00:17:06,062
We enter globalization 3.0.

223
00:17:06,097 --> 00:17:07,638
Certainly while I was sleeping.

224
00:17:07,673 --> 00:17:11,222
It is shrinking the world from size small to size tiny,

225
00:17:11,257 --> 00:17:15,525
and flattening the global economic playing field at the same time.

226
00:17:15,560 --> 00:17:20,430
Only what's really new, unique and different about this era

227
00:17:20,465 --> 00:17:27,783
is that this era of globalization is not built around countries globalizing,

228
00:17:27,818 --> 00:17:31,263
and is not built around companies globalizing.

229
00:17:31,298 --> 00:17:41,590
What is new and unique about this era is the degree to which it is and will continue to be built around individuals globalizing,

230
00:17:41,625 --> 00:17:43,870
individuals and small groups.

231
00:17:43,905 --> 00:17:52,303
That is the new and unique thing about this era is the degree to which individuals and small groups can globalize themselves

232
00:17:52,338 --> 00:17:58,135
and increasingly must think of themselves globally and locate themselves globally.

233
00:17:59,111 --> 00:18:00,834
And pay attention.

234
00:18:00,869 --> 00:18:03,818
This era of globalization, I would argue,

235
00:18:03,853 --> 00:18:06,816
unlike globalization 1.0 and 2.0,

236
00:18:06,851 --> 00:18:12,697
is not gonna be built exclusively around a group of white western individuals

237
00:18:12,732 --> 00:18:14,952
who dominated the first 2 eras of globalization.

238
00:18:14,987 --> 00:18:23,080
It's gonna be built around individuals and small groups of every color of the rainbow who will be able to plug and play.

239
00:18:24,010 --> 00:18:26,547
So that's the kind of the meta argument here.

240
00:18:26,582 --> 00:18:29,505
Now the second chapter of the book, the one that really took me the longest,

241
00:18:29,540 --> 00:18:32,683
is called "the Tens Days of Flattened World".

242
00:18:32,718 --> 00:18:37,851
It's about the ten forces, technology and advances I tried to build each one around a day

243
00:18:37,886 --> 00:18:42,757
that really created this level, this global playing field.

244
00:18:43,733 --> 00:18:47,853
And let me go through what I called "The Ten Flatteners" as quickly as I can.

245
00:18:47,888 --> 00:18:51,332
The first flattener is 11/9

246
00:18:51,367 --> 00:18:53,747
Not 9/11, 11/9.

247
00:18:53,782 --> 00:18:55,888
11/9/1989.

248
00:18:55,923 --> 00:18:59,152
11/9 is the day the Berlin Wall came down.

249
00:18:59,187 --> 00:19:02,666
Wonderful sort of cabalistic accident of dates.

250
00:19:02,701 --> 00:19:06,741
And the fall of the wall was a huge flattener

251
00:19:06,776 --> 00:19:12,486
because the fall of the wall allowed us to see and think of the world as a single flat plane.

252
00:19:12,521 --> 00:19:16,781
I dare say if we look back in the archives of MIT or the New York Times,

253
00:19:16,816 --> 00:19:22,382
we won't find a lot of people or a lot of courses about globalization in 1970 or 1980.

254
00:19:22,417 --> 00:19:27,158
People had eastern policies and they had western policies.

255
00:19:27,193 --> 00:19:30,046
They talked about the north and they talked about the south,

256
00:19:30,081 --> 00:19:34,325
but no one was really talking about globalization because there was a wall in the way.

257
00:19:34,360 --> 00:19:41,766
And the fall of the wall was a huge flattener because it allowed us to see and think of the world as a single flat plane.

258
00:19:43,340 --> 00:19:48,657
I call this first flattener when the walls came down and the Windows came up

259
00:19:48,692 --> 00:19:55,858
because the Windows operating system 3.0, the breakthrough system shifted 5 months after the fall of the Berlin Wall

260
00:19:55,893 --> 00:19:58,610
And so those two things happened at the same time.

261
00:20:00,099 --> 00:20:10,626
Not only the wall came down and gave us the ability to look at the world through a single space, but we are suddenly endowed with a kind of a single graphic user interface to all start to look at the world through.

263
00:20:13,604 --> 00:20:17,115
That was the first flattener. The 2nd flattener is 8/9/1995.

264
00:20:17,150 --> 00:20:22,426
I consider 8/9/1995 one of the most important days in western civilization.

265
00:20:22,461 --> 00:20:31,257
August 9th 1995 is the date a small start-up company in Mountain View, California called Netscape went public.

266
00:20:31,292 --> 00:20:35,131
And Netscape is going to be the huge flattener for 3 reasons.

267
00:20:35,166 --> 00:20:39,178
First of all, it was really the Netscape browser

268 
00:20:39,213 --> 00:20:44,866
that gave us the 1st commercial browser that really brought the Internet alive,

269
00:20:44,901 --> 00:20:49,553
brought it alive in the way that grandma and grandpa, grandson and granddaughter could use it, 

270
00:20:49,588 --> 00:20:53,593
not just the computer scientists trained in MIT.

271 
00:20:53,628 --> 00:20:58,835
And so, the huge breakthrough of Netscape was it, in my view, brought the Internet alive, 

272
00:20:58,870 --> 00:21:09,298
as a device that people from more different places in more different ways could connect with one another than ever before.

273
00:21:09,333 --> 00:21:13,428 
The second thing that Netscape contributed to, certainty didn¡¦t do it alone with

274
00:21:13,463 --> 00:21:17,537
Netscape commercialized a set of transmission protocols based on open standard 

275
00:21:17,572 --> 00:21:26,034
which help ensure that the Internet would be interoperable and won¡¦t be the province of any single company or anyone¡¦s ward garden.

276
00:21:26,069 --> 00:21:30,123
Third, the most importantly to me, Netscape triggered the .com boom, 

277
00:21:30,158 --> 00:21:32,522
and that triggered the dot com bubble.

278
00:21:32,557 --> 00:21:44,772
and that triggered the accidental, ridiculous, absurd, outrageous, insane overinvestment, of something closed to a trillion dollars in fiber optic cable in 5 years.

279
00:21:44,807 --> 00:21:52,751
And that crazy, absurd, ridiculous investment of nearly a trillion dollars in fiber optic cable in 5 years 

280
00:21:52,786 --> 00:21:59,904
accidentally made Beijing, Bangalore and Bethesda, where I live, next-door neighbors,

281
00:21:59,939 --> 00:22:03,688
without anyone, anywhere planning it to happen.

282
00:22:03,723 --> 00:22:07,000
You recall how it to place.

283
00:22:07,035 --> 00:22:09,733
Netscape went public on the morning of 1995.8.9, 

284
00:22:09,768 --> 00:22:13,706
at the price of 28 dollars. That was the opening price.

285
00:22:13,741 --> 00:22:18,893
The stock opened the day at 71, closed the day at 56.

286
00:22:18,928 --> 00:22:27,374
And we all looked at that and said, ¡§Wow, there is gold over them there¡¦re hells.¡¨ 

287
00:22:28,446 --> 00:22:32,125
And so what we do? We all went out and we brought Global Crossing,

288
00:22:32,160 --> 00:22:36,708
Nortel, Lucent.

289
00:22:36,743 --> 00:22:39,470
Come on, admit it. It was in your 4O1K.

290
00:22:40,798 --> 00:22:43,405
And those companies took our money 

291
00:22:43,440 --> 00:22:53,369
and our mutual funds and they laid mile after mile of under-sea and over-land fiber optic cable.

292
00:22:54,600 --> 00:22:57,162
And I only have to tell this crowd about fiber optic cable

293
00:22:57,197 --> 00:23:03,362
that it is the gift that keeps on giving,

294
00:23:04,309 --> 00:23:13,371
Coz once it¡¦s set in the ground, all you have to do is to keep improving those switches at each end and you light more and more capacities.

295
00:23:14,541 --> 00:23:20,596
And basically, that glut, that massive glut of fiber optic cable,

296
00:23:20,631 --> 00:23:29,508
allowed suddenly more people in more places to communicate virtually for free than ever before in the history of the planet. 

297
00:23:30,795 --> 00:23:34,771
So, that really is what the Netscape flattener was all about. 

298
00:23:34,806 --> 00:23:36,989
The third flattener I simply called work-flow.

299
00:23:37,024 --> 00:23:44,198
And work flow is simply my catch-all for all the software and all the standards 

300
00:23:44,233 --> 00:23:52,309
that allowed work to flow, everything from Microsoft Word ,to Microsoft Net-Meeting, to all the proprietor software that you are right and work on in your daily work.

301
00:23:52,344 --> 00:23:57,273
Again I will go back to MIT probably in the, sometime in the 80s.

302
00:23:57,308 --> 00:24:02,739
You know the admissions department would be probably running the Microsoft, the bookkeeping department was running Novell. 

303
00:24:02,774 --> 00:24:08,272
Both departments were much more efficient because they had computers,

304
00:24:08,307 --> 00:24:12,018
but applications did not connect to applications. 

305
00:24:12,053 --> 00:24:16,984
Now, a lot of applications still don¡¦t connect applications, we certainly know that. 

306
00:24:17,019 --> 00:24:25,432
But over the 90s, there was a revolution in software that has connected a lot of more applications with a lot of more other applications, 

307
00:24:25,467 --> 00:24:29,401
and the net result of that created revolution from middle ware to 

308
00:24:29,402 --> 00:24:32,5
all kinds of transmission protocols.

309
00:24:32,612 --> 00:24:42,041
The net result of that is that people are able to work together with other people on more stuff than ever before. 

310
00:24:42,076 --> 00:24:46,328
When my applications can work with your applications virtually that we don¡¦t have to think about it,

311
00:24:46,363 --> 00:24:52,936
it means that we can work together like never before.

312
00:24:52,971 --> 00:25:00,111
And this, I would argue, some point in the mid 1990s was what I called the genesis moment of the flat world,

313
00:25:00,146 --> 00:25:08,614
because when you take that Netscape revolution, people able to connect with people over a network like never before,

314
00:25:09,304 --> 00:25:16,599
and then you take the revolution in software of more and more applications connecting to more other applications than never before,

315
00:25:16,634 --> 00:25:25,382
what we created, willy-nilly, was a global platform for multiple forms of collaboration.

316
00:25:25,417 --> 00:25:35,933
Suddenly more people could collaborate and connect on more stuff than ever before in the history of the world.

317
00:25:35,968 --> 00:25:40,228
And that, to me, was the genesis moment for the flattening of the world. 

318
00:25:40,263 --> 00:25:46,061
Now the next six flatteners are the new forms of collaboration 

31900:25:46,096 --> 00:25:48,829
that sprang from this platform and have come back to flatten the world even more.

320
00:25:48,864 --> 00:25:50,359
I¡¦ll go through them quickly. 

321
00:25:50,394 --> 00:25:52,200
The first of course is ¡¥outsourcing¡¦. 

322
00:25:52,235 --> 00:25:55,537 Outsourcing is just a new form of collaboration 

323
00:25:55,572 --> 00:26:00,465
empowered by this platform of people to people and application to application.

324
00:26:00,500 --> 00:26:09,218
Now, MIT, if it wants to, can out-source the whole bookkeeping department to North Boston, North Dakota or North Bangalore. 

325
00:26:09,253 --> 00:26:13,122
Of this platform either one would be almost equally easy. 

326
00:26:13,157 --> 00:26:16,103
Outsourcing, a new form of collaboration. 

327
00:26:16,138 --> 00:26:19,312
The next new form of collaboration is ¡¥Off-shoring.¡¦ 

328
00:26:19,347 --> 00:26:26,825
I build each of these around the dates, so out-sourcing was built around Y2K, off-shoring was built around when China joined the World Trade Organization  

329
00:26:26,860 --> 00:26:29,560
which takes off-shoring to a whole new level.


330
00:26:29,595 --> 00:26:34,282
Now I take my whole factory from Canton, Ohio and I move it to Canton in China

331
00:26:34,317 --> 00:26:37,441
and integrate it into my global production system- 

332
00:26:37,476 --> 00:26:38,800
off-shoring. 

333
00:26:38,835 --> 00:26:41,713
Third new form of collaboration is open-sourcing. 

334
00:26:42,641 --> 00:26:48,065
¡¥Open-source¡¦, to me, is a verb. It¡¦s open-sourcing. It is actually a new form of collaboration 

335
00:26:48,100 --> 00:26:53,919
It¡¦s a bunch of geeks like half of you, sitting at home, working on the LINUX operating system

336
00:26:54,421 --> 00:26:57,215
which todaythe day has 15% of global OS market. 

337
00:26:57,250 --> 00:27:02,333
Brazil just announced a couple month ago. It¡¦s converting the whole Brazilian government to LINUX.

338
00:27:02,368 --> 00:27:07,941
This is a whole new form of collaboration obviously, and innovation. 

339
00:27:08,885 --> 00:27:12,671
And you know then, how it likes to be Microsoft, how it makes Bill Gates.

340
00:27:12,706 --> 00:27:15,003
And how would you like to be Bill Gates? 

341
00:27:16,051 --> 00:27:22,244
So, your old model: if anyone challenges you and you undercut them on price. 

342
00:27:23,362 --> 00:27:26,776
And, it¡¦s hard to be free.

343
00:27:26,811 --> 00:27:28,407
It¡¦s hard to be free 

344
00:27:28,442 --> 00:27:38,166
It¡¦s hard to be a bunch of geeks sitting at home writing the next operation system or the next version of Microsoft Word or Adobe Acrobat for free.

345
00:27:38,201 --> 00:27:40,733
Some doing it because they hate Microsoft. 

346
00:27:40,768 --> 00:27:44,037
And let¡¦s be honest, many doing it because they hate Microsoft.

347
00:27:44,072 --> 00:27:49,133
That¡¦s just a question: whether there¡¦ll be an open source movement if there were no Microsoft.

348
00:27:49,168 --> 00:27:56,030
And many others doing it for all the reasons you, this crowd understands the best, which is the purest view of science of it.

349
00:27:56,065 --> 00:27:59,366
¡§Look at this algorithm I came up with,

350
00:27:59,401 --> 00:28:03,614
look at this patch, this is so cool, you gotta try this.¡¨

351
00:28:06,133 --> 00:28:07,292
But whatever reason they are doing it¡K

352
00:28:07,327 --> 00:28:10,773
This is only crowd in America who laughs at this line.

353
00:28:10,808 --> 00:28:12,940
It is so good, it is great!

354
00:28:16,018 --> 00:28:18,289
Other people just sit there. ¡¥What¡¦s he talking about?¡¨

355
00:28:20,794 --> 00:28:22,448
But for whatever reason they are doing it, 

356
00:28:22,483 --> 00:28:26,992
this, to me, is a whole new form of collaborate. Firefox.

357
00:28:27,027 --> 00:28:33,047
Here is web browser produced by a 19-year old at Stanford along with a 24 year old from New Zealand

358
00:28:33,082 --> 00:28:35,735
who had never met yet.

359
00:28:35,770 --> 00:28:40,025
And, you know in one month, it has been downloaded 10 million times!

360
00:28:40,060 --> 00:28:43,279
Takes 5% of Microsoft Explorer¡¦s market in a month. 

361
00:28:43,314 --> 00:28:48,007
So this is an incredibly powerful new form of collaboration.

362
00:28:48,042 --> 00:28:54,447
And the Open University at MIT is doing which I had a pleasure of learning all about today. 

363
00:28:54,482 --> 00:28:56,375
It¡¦s just another expression of this

364
00:28:56,376 --> 00:29:00,615
and it is going to be, I think, incredibly powerful form of innovation.

365
00:29:00,650 --> 00:29:02,305
The flatter the world gets.

366
00:29:02,340 --> 00:29:07,642
The 4th new form of collaboration, I called ¡¥supply chaining.¡¦

367
00:29:07,677 --> 00:29:09,987
Supply chaining is what Wal-Mart does,

368
00:29:11,731 --> 00:29:16,547
i.e. designing a global supply chain down to the last atom of efficiency. 

369
00:29:17,476 --> 00:29:22,760
So, you take an item off the shelf from the Wal-Mart in Brooklyn, and another is immediately made in Shenzhen, China.

370
00:29:22,795 --> 00:29:26,721
If Wal-Mart were a country, it would be China¡¦s 8th largest trading partner today,

371
00:29:26,756 --> 00:29:28,961
ahead of Canada and Australia.

372
00:29:29,729 --> 00:29:36,208
And my friend Yossi Sheffi who¡¦s here has taught me something about supply chain.

373
00:29:36,243 --> 00:29:42,054
And he has a nice saying, which is that: ¡²Making stuff? Making stuff. That is easy.

374
00:29:42,089 --> 00:29:45,455
Supply chain? That¡¦s really hard.

375
00:29:47,437 --> 00:29:50,094
Think about Wal-Mart¡¨ as he said.

376
00:29:50,954 --> 00:29:55,380
Wal-Mart is the biggest company in America, and they don¡¦t make anything.

377
00:29:56,693 --> 00:30:01,850
Just a supply chain, down to the last atom of efficiency.

378
00:30:01,885 --> 00:30:03,892
Whole new form of collaboration.

379
00:30:03,927 --> 00:30:07,306
The fifth new form of collaboration I called ¡¥in-sourcing.¡¦ 

380
00:30:07,341 --> 00:30:09,572
In-sourcing is what UPS does.

381
00:30:09,607 --> 00:30:13,035
You know the people in the funny brown trucks in the funny brown shorts.

382
00:30:14,075 --> 00:30:19,994
If you think all they¡¦re doing is delivering packages, you are not paying attention.

383
00:30:21,159 --> 00:30:23,984
There¡¦s a little hint of what they are up to is on the side of their truck now.

384
00:30:24,019 --> 00:30:27,697
It simply says ¡¥Your world synchronized.¡¨

385
00:30:27,732 --> 00:30:30,470
Coz what UPS does now is internal logistics.

386
00:30:30,896 --> 00:30:37,941
They come into your company, right up to your neck, right up to headquarters, and take over your entire, internal logistics. That¡¦s I called in-sourcing.

387
00:30:39,067 --> 00:30:41,334
So you have a Toshiba laptop

388
00:30:41,369 --> 00:30:45,432
and it breaks, and you go to your warranty, and it says called 1-800-HELP.

389
00:30:45,467 --> 00:30:46,801
You called 1-800-HELP 

390
00:30:46,836 --> 00:30:49,633
and they tell you take your Toshiba laptop to the UPS store

391
00:30:49,668 --> 00:30:52,408
and send it to us and had it back to in 72 hours.

392
00:30:52,443 --> 00:30:53,616
Here¡¦s what you don¡¦t know.

393
00:30:53,651 --> 00:31:00,123
Your Toshiba laptop goes from the UPS store to the UPS hub at Louisville airport in Kentucky

394
00:31:00,158 --> 00:31:04,098
where in an airline hanger at Louisville airport, in a clean room,

395
00:31:04,133 --> 00:31:08,201
your Toshiba laptop is repaired by a UPS employee.

396
00:31:08,236 --> 00:31:11,168
It never touches Toshiba¡¦s hands.

397
00:31:11,203 --> 00:31:14,505
Toshiba has in-sourced that entirely to UPS. 

398
00:31:14,540 --> 00:31:19,160
Nike.com. You wanna get the kids a new pair of sneakers. You go on-line Nike.com.

399
00:31:19,195 --> 00:31:24,624
What you don¡¦t know is on the other side of the screen, there¡¦s someone in funny brown shorts

400 00:31:25,928 --> 00:31:33,679
who is taking down your order, picking and packing the shoes from the Nike w house that UPS manages,

401
00:31:33,714 --> 00:31:37,712
and shipping them to you and collecting the money on behalves of UPS.

402
00:31:37,747 --> 00:31:40,025
See the Pappa John¡¦s pizza truck go by.

403
00:31:41,025 --> 00:31:42,050
Guess who¡¦s driving?

404
00:31:43,485 --> 00:31:47,161
Say it with me now: someone in funny brown shorts!

405
00:31:47,196 --> 00:31:55,795
Because Pappa John has in-sourced the delivery of their dough from the bakery to their outlets to UPS.

406
00:31:55,830 --> 00:31:58,010
So this is a whole new form of collaboration.

407
00:31:58,045 --> 00:32:02,609
It requires more micro you get a huge amount of  standardization and, as a result, you¡¦e going to be a huge flattener over time. 

408
00:32:02,644 --> 00:32:06,166
There are hundred, probably thousand companies today

409
00:32:06,201 --> 00:32:11,530
that no longer touches any of their products.

410
00:32:11,565 --> 00:32:17,529
They are nothing but marketing shelves, who have in-sourced, basically their inners, to UPS.

411 00:32:18,290 --> 00:32:22,498
The sixth and the last new form of collaboration, I called ¡¥informing¡¦.

412
00:32:22,533 --> 00:32:25,241
Informing, and that is my name for Google. 

413
00:32:25,276 --> 00:32:27,713
That is my name for search 

414
00:32:27,748 --> 00:32:33,873
because I can now inform myself, I can collaborate with data all by myself.

415
00:32:34,585 --> 00:32:37,673 
TIVO is a form of informing for entertainment

416
00:32:37,708 --> 00:32:41,513
and informing is a powerful new form of collaboration. 

417
00:32:41,514 --> 00:32:47,344
So just to review. We have the first three, they¡¦ve created this platform for multiple forms of collaboration,

418
00:32:47,379 --> 00:32:55,215
then we have the next six new forms of collaboration: out-sourcing, off-shoring, open-sourcing, supply-chaining, in-sourcing and informing.

419
00:32:55,250 --> 00:32:56,593
That¡¦s nine.

420
00:32:56,628 --> 00:32:58,922
What¡¦s the tenth? I said, ¡§There are ten.¡¨

421
00:32:59,841 --> 00:33:03,994
I argue in the book, that the tenth, I simply called ¡¥the steroids¡¦,

422
00:33:04,029 --> 00:33:11,010
and the steroids are wireless voice over the Internet and file sharing.

423
00:33:11,907 --> 00:33:14,042
And what these steroids are doing

424
00:33:14,077 --> 00:33:19,289
is now turbo-charging all six of these new form of collaboration,

425
00:33:19,892 --> 00:33:27,002
so I can now do anyone from anywhere with any device, totally mobile.

426
00:33:27,818 --> 00:33:33,865
So, that¡¦s the 2nd chapter, and that¡¦s the argument about what I considered to be the 10 forces that flattened the world. 

427
00:33:34,546 --> 00:33:39,769
Now, the third chapter and I will stop. After these trials to tie together these base arguments.

428
00:33:40,506 --> 00:33:42,403
The third chapter is called ¡¥The Triple Convergences.¡¦

429
00:33:42,438 --> 00:33:45,856
So basically what I argue is that sometime around the year 2000

430 00:33:45,891 --> 00:33:52,963
there were three huge convergences which all came together to really shape the brief history of the 21st century.

431
00:33:52,998 --> 00:33:58,197
The first convergence, I would argue, is all ten of these flatteners converged,

432
00:33:58,232 --> 00:33:59,707
right around the year 2000,

433
00:33:59,742 --> 00:34:06,634
converged into a tipping point with a complementarity between them. All started to work together.

434
00:34:06,669 --> 00:34:11,651
So the informing helped the out-sourcing, the out-sourcing help the off-shoring.

435
00:34:11,686 --> 00:34:19,883
The open-sourcing drove the in-sourcing. All the complementarities between these ten flatteners started to work together,

436 00:34:20,874 --> 00:34:22,354
and when they did,

437
00:34:23,130 --> 00:34:25,458
they created the flat world.

438
00:34:25,493 --> 00:34:27,067
What do I mean by the flat world?

439
00:34:27,102 --> 00:34:40,979
They created a global web-enabled platform for multiple forms of sharing knowledge and work, irrespective of time, distance, geography or even, increasingly, language.

440
00:34:41,014 --> 00:34:43,612
That¡¦s what I mean when I say ¡¥the world is flat¡¦.

441
00:34:43,647 --> 00:34:49,882
I mean we have created a global, web-enabled platform for multiple forms of sharing knowledge and work, 

442
00:34:49,917 --> 00:34:55,898
irrespective of time, distance, geography, and, increasingly, even language.

443
00:34:55,933 --> 00:34:58,181
And I believe that platform.

444
00:34:58,216 --> 00:35:05,667
If you think about that platform, you can explain more things about what¡¦s happening in the world today

445
00:35:05,702 --> 00:35:09,290
than with any other framework. 

446
00:35:09,325 --> 00:35:14,154
You can explain the rise in energy, and you can explain the rise in out-sourcing,

447
00:35:14,189 --> 00:35:18,338
or you can explain MIT¡¦S Open Course.

448
00:35:20,618 --> 00:35:23,561
And you can explain 911 and Al-Qaeda.

449
00:35:24,226 --> 00:35:31,025
So, that first convergence is what flattened the world by producing this new platform

450
00:35:31,060 --> 00:35:33,864
that more people than ever can plug and play on.

451
00:35:34,560 --> 00:35:38,328
The 2nd convergence is that we¡¦re just at the  beginning of this

452
00:35:38,363 --> 00:35:42,088
is that we all having to learn to horizontalize ourselves,

453
00:35:42,123 --> 00:35:47,216
i.e. we¡¦re all having to learn to adapt our business processes, our study habits,

454
00:35:47,251 --> 00:35:51,567
our innovative approaches to this new platform.

455
00:35:51,602 --> 00:35:57,664
Coz we¡¦re going from a world where values were created in vertical silos largely of command and control,

456
00:35:57,699 --> 00:36:03,873
to a world where the values would be created increasing horizontally by who you connect and collaborate with.

457
00:36:03,908 --> 00:36:08,729
We¡¦re just at the beginning of making all these changes from vertical to horizontal.

458
00:36:09,346 --> 00:36:11,272
Now, the best way to understanding this is, I think¡K

459
00:36:11,307 --> 00:36:16,202
Paul David, a Stanford economics had a remarkable essay,

460
00:36:16,237 --> 00:36:18,195
I¡¦m sure many of you have to read, on electrification.

461
00:36:18,196 --> 00:36:23,347
And he asked a question: why was when electricity first appeared, we didn¡¦t get a productivity boost.

462
00:36:23,348 --> 00:36:25,412
And the answer that he¡¦s looked into was

463
00:36:25,447 --> 00:36:29,867
because to get the actual productivity boost from electric motors replacing steam engines,

464
00:36:29,902 --> 00:36:31,940
we had to first redesign buildings: 

465
00:36:31,975 --> 00:36:36,204
from tall multistory buildings that could accommodate big steam engines with their pulleys, 

466
00:36:36,239 --> 00:36:42,134
To small and lower long buildings that with a factory could operate small electric motors.

467
00:36:42,169 --> 00:36:45,639
And the managers had to adapt their management practices.

468
00:36:45,674 --> 00:36:48,448
After architects adapted the way that buildings are looked,

469
00:36:48,483 --> 00:36:52,391
and then shop floor stewards had to adapt how they manage the shop floor.

470
00:36:52,426 --> 00:36:56,996
So there were a million different habits and structures that had to change. 

471
00:36:57,031 --> 00:37:00,339
And, boom, once they changed at a tipping point, 

472
00:37:00,374 --> 00:37:04,827
then we really got the productivity boost from the electrification.

473
00:37:04,862 --> 00:37:14,549
I would argue we¡¦re just at the beginning of doing the same thing with this horizontal platform.  We¡¦re just at the beginning of changing our habits- horizontalizing ourselves.

474
00:37:15,526 --> 00:37:19,813
I keep discovering it in a very personal way, when I was working on the book.

475
00:37:19,848 --> 00:37:22,293
I live in Bethesda in Maryland.

476
00:37:22,328 --> 00:37:26,989
And my daughter, my oldest daughter was a sophomore goes to a school in New Haven, Connecticut.

477
00:37:27,024 --> 00:37:29,622
I was going to visit her last March.

478
00:37:29,657 --> 00:37:36,055
It¡¦s a complete pain in the behind to go from the Bethesda, Maryland to New Haven, Connecticut.

479
00:37:36,090 --> 00:37:40,822
You have to drive from Bethesda to BWI airport in Baltimore,

480
00:37:40,857 --> 00:37:44,622
take Southwest Aairline from Baltimore to Hartford, 

481
00:37:44,657 --> 00:37:47,688
and then drive from Hartford for an hour to New Haven.

482
00:37:47,723 --> 00:37:52,233
I promised to going up last spring, taking two bags of spring clothes for my daughter

483
00:37:54,869 --> 00:37:57,929
and I was go on Southwest. 

484
00:37:57,964 --> 00:38:01,954
I know you may not have flown on Southwest, but you may know on Southwest, you don¡¦t get a reserved seat.

485
00:38:01,989 --> 00:38:06,096
You just get a ticket and says A, B or C.

486
00:38:06,888 --> 00:38:09,671
You do not want to be a C on Southwest Airline.

487
00:38:09,706 --> 00:38:13,781
Especially if you bring 2 bags to your daughter

488
00:38:13,816 --> 00:38:17,183
of the stuff that you want room above the seat, not get stuck in the middle.

489
00:38:17,218 --> 00:38:18,906
You won¡¦t want to be a B, you wanna be A.

490
00:38:19,562 --> 00:38:24,481
No problem, I am a hip guy, so I did the e-ticket thing on Southwest.

491
00:38:24,516 --> 00:38:28,287
And I got to BWI airport 95 minutes before my flight, 

492
00:38:28,322 --> 00:38:30,736
coz I wanna be an A. No one¡¦s  gonna be B.

493
00:38:31,739 --> 00:38:35,561
So, I got to the Southwest Airline machine, stuck in my visa card and out came my ticket.

494
00:38:35,596 --> 00:38:38,569
And it said B.

495
00:38:39,465 --> 00:38:46,536
I said, son of a ___!! This thing is fixed! This is rig! This is worse than Las Vegas!

496
00:38:46,571 --> 00:38:49,039
There is no way I am a B!

497
00:38:49,074 --> 00:38:53,305
I am here 95 minutes before this flight , there¡¦s no way I am a B!

498
00:38:57,305 --> 00:39:00,448
When I get my cinnabon, and stood in the back of the B line,

499
00:39:00,483 --> 00:39:03,832
woo, I¡¦m mad.

500
00:39:05,639 --> 00:39:09,350
Well I stood at the back of the B line for an hour.

501
00:39:10,413 --> 00:39:11,975
Then they called the flight

502
00:39:12,887 --> 00:39:14,504
and then I saw it.

503
00:39:14,539 --> 00:39:25,544
All the As seem to be getting on kept what look to me  like crumpled pieces of white home printer paper

504
00:39:26,305 --> 00:39:36,884
as though they had downloaded and printed it out at home their own bar codes and boarding passes at 12:01a.m. the night before!

505
00:39:36,919 --> 00:39:41,358
Well, what I didn¡¦t know is, thanks to the first convergence, 

506
00:39:41,393 --> 00:39:50,653
Southwest Airline has begun a program where all their customers could download and print out their own boarding passes at 12:01 AM the night before.

507
00:39:50,688 --> 00:39:55,238
Oh, friends, I looked at that and I said, ¡§Friedman, you are an old 20th century. 

508
00:39:57,812 --> 00:40:00,941
You are so globalization 2.0.¡¨

509
00:40:00,976 --> 00:40:05,610
I mean, really, but think about it in globalization 1.0, there was a ticket agency.

510
00:40:05,645 --> 00:40:10,497
We were supposed to go down the Kate St. in Washington, pull a number stamp  there¡¦s  a physical person standing in front of you.

511
00:40:10,532 --> 00:40:12,563
Then it was e-ticket machine.

512
00:40:12,598 --> 00:40:14,195
We thought that was cool.

513
00:40:15,428 --> 00:40:17,098
And then while you were sleeping, while you were sleeping,

514
00:40:17,875 --> 00:40:25,282
Southwest Airline made you the individual your own ticket agent.

515
00:40:26,122 --> 00:40:29,770
And excuse me, another way to look at it,

516
00:40:29,805 --> 00:40:33,714
the Southwest Airline made you their employee.

517
00:40:35,009 --> 00:40:36,820
And excuse me one more time,

518
00:40:37,053 --> 00:40:45,070
if you value your time that before 12:01 that night before, you are paying Southwest Airlines to be their employee.

519
00:40:48,130 --> 00:40:52,482
That just happened.

520
00:40:52,738 --> 00:41:00,480
And that convergence made possible what Southwest Airlines did.

521
00:41:00,515 --> 00:41:04,009
And what I hadn't done was horizontalize myself.

522
00:41:04,044 --> 00:41:08,832
I was still interacting with Southwest Airlines vertically.

523
00:41:08,867 --> 00:41:12,385
I was the moron going up to the e-ticket machine,

524
00:41:14,089 --> 00:41:16,343
not the person downloading ticket at home.

525
00:41:16,378 --> 00:41:18,856
So next time around, next time around,

526
00:41:18,891 --> 00:41:22,641
I will go online at 12:01 that night before.

527
00:41:22,676 --> 00:41:28,362
I will go to work for Southwest Airlines. I will download as an individual my own boarding pass and bar code.

528
00:41:28,921 --> 00:41:33,530
And I will arrive at BWI airport 35 minutes before the flight,

529
00:41:34,401 --> 00:41:39,985
not 95, and I will capture 60 minutes of productivity.

530
00:41:41,345 --> 00:41:45,952
All the changes that will be involved that me captured in those 60 minutes.

531
00:41:45,987 --> 00:41:51,802
We are just at the beginning of a million changes in our habits and business processes around

532
00:41:51,837 --> 00:41:55,123
that I call horizontalizing ourselves.

533
00:41:55,158 --> 00:41:59,194
That is the second convergence. We say we're just at the beginning  of it.

534
00:41:59,229 --> 00:42:02,821
The third convergence is very simple. Just when the world went flat,

535
00:42:02,856 --> 00:42:07,277
it¡¦s only created that platform for multiple forms of sharing knowledge and work

536
00:42:07,312 --> 00:42:11,119
just when we started to adapt our business processes, what happens?

537
00:42:11,154 --> 00:42:17,053
Three huge economies called India, China and the former Soviet empire opened up.

538
00:42:17,798 --> 00:42:23,814
And three billion people who are out of the game walk on to the playing field.

539
00:42:23,849 --> 00:42:27,592
And when do they arrive? Just when the world has been flattened.

540
00:42:27,627 --> 00:42:30,999
Just when then can plug and play, compete, connect and collaborate

541
00:42:31,085 --> 00:42:36,665
with your kids and mine, more efficiently, cheaply and effectively than ever before in the history of the planet.

542
00:42:36,700 --> 00:42:43,367
Yes, I know, it's ten percent of those, only ten percent of those three billions who can really plug and play.

543
00:42:43,402 --> 00:42:47,990
Ten percent of three billion zero carry the one. That's three hundred million people.

544
00:42:48,025 --> 00:42:51,295
That's exactly twice the size of the American work force

545
00:42:52,371 --> 00:42:54,547
It's the simple argument of this book

546
00:42:54,582 --> 00:43:01,481
that it is the convergence of these ten flatteners with these new business processes with the three billion new players

547
00:43:01,516 --> 00:43:05,905
that is going to shape the brief history of the 21st century
548
00:43:05,940 --> 00:43:09,587
Now before I end, let me just point out one last thing,

549
00:43:09,622 --> 00:43:10,946
one last coincidence,

550
00:43:11,556 --> 00:43:13,720
this huge event, this

551
00:43:13,755 --> 00:43:19,896
what I, this triple convergence, for that I think, over time, is going to change everything.

552
00:43:20,416 --> 00:43:22,743
We are going from vertical to horizontal.

553
00:43:22,778 --> 00:43:27,777
I think this is gonna to be seen in time.

554
00:43:27,812 --> 00:43:31,323
And it will take time to play out as the mother of all inflection points.

555
00:43:31,358 --> 00:43:36,562
This is gonna be as big as Gutenberg and the printing press.

556
00:43:37,736 --> 00:43:42,346
And just when we reach this incredible inflection point,

557
00:43:43,633 --> 00:43:49,136
it gets completely disguised by what I would call a political perfect storm.

558
00:43:49,784 --> 00:43:55,679
And that political perfect storm is 9.11, Enron and the .com bust.

559
00:43:56,291 --> 00:44:01,392
9.11 completely distracts us, from a country from the President on down to the reporters, Ok?

560
00:44:01,427 --> 00:44:03,129
We all focused somewhere else.

561
00:44:03,164 --> 00:44:06,970
Enron made every CEO guilty until proven innocent.

562
00:44:07,005 --> 00:44:08,675
Who wants to talk to them?

563
00:44:08,710 --> 00:44:14,154
Little on think about what they might need to actually compete and collaborate more effectively in this world,

564
00:44:14,189 --> 00:44:20,514
what they might need by way of taxes incentives to different copy right and intellectual property laws?

565
00:44:21,674 --> 00:44:25,649
And of course, the .com bust made a lot of people really silly.

566
00:44:25,684 --> 00:44:28,098
It made them think the globalization was over.

567
00:44:28,955 --> 00:44:31,200
But in fact, it was just been turbocharged.

568
00:44:33,089 --> 00:44:35,593
So right when the world got flat,

569
00:44:37,743 --> 00:44:40,201
we are looking totally the other way.

570
00:44:40,236 --> 00:44:44,071
So doing this book was really a strange experience

571
00:44:44,547 --> 00:44:48,544
coz I would go around and interview all the CIOs and CTOs and CEOs

572
00:44:48,579 --> 00:44:51,784
And they are, they are like pot people.

573
00:44:51,819 --> 00:44:55,135
They are like pot people in a science fiction movie.

574
00:44:55,170 --> 00:44:58,199
They all know the secret

575
00:44:58,234 --> 00:45:00,357
They are doing it like crazy.

576
00:45:00,392 --> 00:45:04,127
They all know what's going on. Everything I learned, I learned from them.

577
00:45:04,758 --> 00:45:07,494
They all know what's going on

578
00:45:07,529 --> 00:45:11,171
but nobody's told the kids!

579
00:45:13,900 --> 00:45:16,900
Nobody's told the kids!

580
00:45:17,566 --> 00:45:19,374
So we just had an election

581
00:45:19,409 --> 00:45:22,462
right at the middle of this triple convergence,

582
00:45:22,973 --> 00:45:26,916
with the Democrats were debating whether NAFTA was a good idea,

583
00:45:27,644 --> 00:45:34,715
and the Republicans put duck tape over the mouth of Chief White House economist Greg Mankiw

584
00:45:34,750 --> 00:45:37,387
when he said outsourcing makes a lot of sense.

585
00:45:37,422 --> 00:45:41,797
And they stashed him in Dick Cheney's basement,

586
00:45:45,277 --> 00:45:51,325
never to be heard from again. Has anybody seen Greg Mankiw?

587
00:45:54,788 --> 00:46:01,181
So right when we have reached a fundamental inflection point, that's gonna require a lot of change,

588
00:46:02,404 --> 00:46:04,189
nobody's told the kids.

589
00:46:05,741 --> 00:46:09,764
So I wrote this book to tell at least two kids,

590
00:46:10,347 --> 00:46:11,778
Orly and Natalie Friedman:

591
00:46:12,923 --> 00:46:15,084
¡§What world I think they are gonna grow up in?¡¨

592
00:46:16,052 --> 00:46:17,886
And it's a world I said many times¡K

593
00:46:17,921 --> 00:46:20,087
When I was growing up in Minneapolis, my parents said to me

594
00:46:20,662 --> 00:46:23,210
"Tom, finish your dinner. People in India and China are starving."

595
00:46:24,285 --> 00:46:26,540
And I tell my girls, "Girls, finish your homework,
596
00:46:26,575 --> 00:46:30,196
because people in China and India are starving for your jobs.¡¨

597
00:46:30,231 --> 00:46:34,036
And in a flat world, they can have them.

598
00:46:34,071 --> 00:46:37,923
There is no such thing as an American job any more.

599
00:46:39,291 --> 00:46:46,919
So let me simply conclude with an insight that was parted to me by Carly Fiorina form HP before she lost her job.

600
00:46:48,623 --> 00:46:50,639
Carly got all these actually

601
00:46:50,674 --> 00:46:55,898
I don't know about the business side, but she was very smart about all of these.

602
00:46:55,933 --> 00:47:03,169
And she said to me, ¡§You know, Tom, everything that we called IT revolution, the information technology revolution, these last twenty years,

603
00:47:03,204 --> 00:47:07,831
sorry to tell you, that was just the warmer packet.

604
00:47:07,866 --> 00:47:17,169
That¡¦s  just been the forging, sharpening and distribution of the tools of collaboration into this new platform.

605
00:47:17,811 --> 00:47:20,346
We are now just at the end of the beginning.

606
00:47:20,987 --> 00:47:22,707
What you are now about to see

607
00:47:22,742 --> 00:47:26,491
is the real IT revolution.¡¨

608
00:47:27,322 --> 00:47:33,849
So, friends, fasten your seat belt and put your seat back, and chair tables into a fixed and upright position

609
00:47:34,872 --> 00:47:37,737
because the world is flat.

610
00:47:37,772 --> 00:47:38,706
Thank you very much.

611
00:47:38,741 --> 00:47:41,025
Thank you very much.

612
00:48:05,124 --> 00:48:10,313
I know we have time for some questions. I'd love to... I want to favour students if I could.

613
00:48:10,348 --> 00:48:12,043
So if you are a student you getta...yeah!

614
00:48:13,300 --> 00:48:21,223
(Student 1)Q: What do you think, if nations that are underdeveloped, Something like Africa fits¡K
A: How does that fit into all these?

615
00:48:21,258 --> 00:48:22,368
It's an important question.

616
00:48:22,403 --> 00:48:25,935
The question was¡K will I be doing a book signing afterwards? 

617
00:48:26,951 --> 00:48:30,543
And the answer is yes, and thank you so much for asking me.

618
00:48:34,159 --> 00:48:39,415
Where does Africa fit in? Where does the whole under-developed world fit into all these?

619
00:48:41,220 --> 00:48:43,434
I've two chapters in the book. I've just given you the first, you know.

620
00:48:43,469 --> 00:48:49,445
And the next parts are about what it means for American. Last part, what it means for developing world and for geopolitics.

621
00:48:52,576 --> 00:48:57,614
And the chapter on the developing world, sort of...,I just go really quickly to answer your question.

622
00:48:57,649 --> 00:48:59,663
The first is called the Virgin of Guadalupe.

623
00:49:00,416 --> 00:49:07,960
And what happened when I started my researches in the book, I traveled around world and I come to have just asking people where were you when you discovered the world is flat?

624
00:49:08,673 --> 00:49:11,266
It's very interesting getting people's answers.

625
00:49:11,301 --> 00:49:16,993
So I was in Mexico and talking to some friends of central bank there.

626
00:49:17,028 --> 00:49:22,138
And it may know it was Mexico and I think it was the central bank.

627
00:49:22,173 --> 00:49:26,676
They said, ¡§We discovered the world is flat last year. You know,

628
00:49:26,711 --> 00:49:30,629
our patron saint, in Mexico it's Virgin of Guadalupe.

629
00:49:30,664 --> 00:49:37,549
And last year we discovered that all kinds of statues of the Virgin of Guadalupe were being imported from China.¡¨

630
00:49:38,750 --> 00:49:41,888
When you are a low-wage developing country,

631
00:49:41,923 --> 00:49:45,384
and your patron saint has been imported from China,

632
00:49:47,192 --> 00:49:48,377
the world is flat!

633
00:49:50,088 --> 00:49:54,057
The point about this, I¡¦m trying to make and this is a serious point¡K

634
00:49:54,092 --> 00:49:59,424
I did the same thing with an Egyptian friend who talked about how Ramadan lanterns which are staple of Ramadan,

635
00:49:59,459 --> 00:50:02,259
kids carry them around and around in Ramadan,

636
00:50:02,738 --> 00:50:09,682
they are now all been imported. This is a thousand year old ---- in Egypt and they are now all being imported from China,

637
00:50:09,717 --> 00:50:12,985
with a microchip that played the latest Egypt folk songs.

638
00:50:14,392 --> 00:50:21,153
What is this about when the world gets flat, the slightest variation, you know, is your flatness relative to another country.

639
00:50:21,188 --> 00:50:25,937
Can take a country like Mexico, from right being on the border,, to thousands miles away;

640
00:50:25,972 --> 00:50:31,000
to countries like China, thousands miles away, thousands miles away, to right to our border.

641
00:50:31,035 --> 00:50:33,977
And so what I really talk about in that chapter is that what 90s were about.

642
00:50:34,012 --> 00:50:38,437
It seems to me was what I call a reform wholesale,

643
00:50:38,472 --> 00:50:45,620
macroeconomic reform giving you sort of opening your economy to the world. More trade and things that like¡K

644
00:50:45,655 --> 00:50:53,218
But what really what the 2000 is gonna be about is a reform. That was a reform wholesale.

645
00:50:53,763 --> 00:50:56,389
Yes, it¡¦s 2000 I think will be more about retail about what actually gets a business started.

646
00:50:56,424 --> 00:51:00,421
And there is a wonderful study that the World Bank has done called "Doing business 2000".

647
00:51:00,456 --> 00:51:04,381
They actually looked at five categories, a hundred countries. I think I get this right.

648
00:51:04,416 --> 00:51:08,095
Five questions.

649
00:51:08,130 --> 00:51:11,054
¡¥How long does it take to get a license to start a business?¡¦

650
00:51:11,089 --> 00:51:15,262
Does it take three days or a hundred eighty days. And ¡¥how much does it cost?¡¦

651
00:51:15,297 --> 00:51:18,438
¡¥How easy is it to hire and fire people?¡¦

652
00:51:18,473 --> 00:51:20,935
¡¥How easy is it to raise capital?¡¦

653
00:51:20,970 --> 00:51:26,919
¡¥How easy is it to get a legal dispute, a commercial dispute,  adjudicated? How much money does it cost?¡¦

654
00:51:26,954 --> 00:51:29,031
And ¡¥how easy is it to go bankrupt?¡¦

655
00:51:29,066 --> 00:51:34,936
Because it is very important if it is to be easy to free up dead capital in order to apply to live thing.

656
00:51:34,971 --> 00:51:38,278
And it did a whole schema. It's a fascinating report if you have seen it.

657
00:51:38,313 --> 00:51:41,475
They simply called "doing business" and these five criteria.

658
00:51:41,510 --> 00:51:44,515
These are the reforms, micro-reforms.

659
00:51:44,550 --> 00:51:51,073
I think how quickly you get to reform retail will really differentiate one developing country from another.

660
00:51:51,108 --> 00:51:54,977
But you asked a further question, really about the poorest countries in the world.

661
00:51:57,555 --> 00:52:00,665
I have another chapter which is really called ¡¥the un-flat world.¡¦

662
00:52:00,700 --> 00:52:04,065
I just said, ¡¥Don¡¦t worry.¡¦ I understand the world isn't all flat not even close. Ok?

663
00:52:04,857 --> 00:52:11,721
And to me there is sort of four forces and communities that are not in the flat world, that if we don't attend to them

664
00:52:12,464 --> 00:52:15,664
Could very much un-flatten the world from their side.

665
00:52:16,473 --> 00:52:17,784
The first I simply call it the "too-sick".

666
00:52:18,607 --> 00:52:23,111
And that's communities caught in the gripe of HIV AIDS, tuberculosis and malaria,

667
00:52:23,146 --> 00:52:26,881
and that's everything from rural Africa to rural India to rural Russia.

668
00:52:26,916 --> 00:52:30,945
I mean, parts, you know, no doubt, even around our own country to a lesser degree.

669
00:52:30,980 --> 00:52:33,129
They just are too sick

670
00:52:33,164 --> 00:52:35,361
to be able to take part in the flat world.

671
00:52:36,980 --> 00:52:42,722
And actually I talked about the interesting ways of collaboration that  people are coming up to address some of those problems.

672
00:52:42,757 --> 00:52:47,067
In fact I talked about the Gates Foundation, which I think it's very interesting, grand challenging model.

673
00:52:47,102 --> 00:52:49,325
The second group of people I called the "too-unabled"

674
00:52:49,360 --> 00:52:54,340
And again, that's rural India, rural China. I've been to Beijing. I've been to Shanghai. I've been to Bangalore.

675
00:52:54,375 --> 00:53:00,580
I've seen the riches but they need a step stool, if they are gonna be able to participate in this.

676
00:53:02,261 --> 00:53:10,428
And what I talked about there is, I'm a big believer that in governance. That¡¦s the key to every anti-poverty program

677
00:53:10,463 --> 00:53:11,891
is around governance

678
00:53:12,419 --> 00:53:17,777
and local governance. It's really a challenge basically to the NGO community and anti-globalization movement

679
00:53:17,812 --> 00:53:21,601
to make actually local governance and focusing on that the priority.

680
00:53:22,019 --> 00:53:22,842
Coz you look at India today.

681
00:53:22,877 --> 00:53:27,074
India in 1991, when they first do their opening to the world,

682
00:53:27,109 --> 00:53:32,355
had 100 million dollars in the bank. India was going broke. Do you understand when they talk about a country that way?

683
00:53:32,390 --> 00:53:35,371
Today India has 120 billion dollars in reserve.

684
00:53:35,406 --> 00:53:36,698
That's the good news.

685
00:53:36,733 --> 00:53:42,681
The bad news is when 100 thousand rupees is allocated from New Delhi to the village outside Bangalore,

686
00:53:42,716 --> 00:53:46,266
by the time it gets there, it's down to 10 thousand rupees.

687
00:53:46,301 --> 00:53:56,472
And so actually dealing with just that internal chain of governance put up a huge impact in building a step-stool for people who want to be in globalization.

688
00:53:57,355 --> 00:53:58,842
Third group are the "too frustrated".

689
00:53:59,482 --> 00:54:02,173
And that to me is a lot of the Muslim world today.

690
00:54:02,208 --> 00:54:08,467
They¡¦ve seen what's going in the flat world, they want to be part of it but they feel very much left behind

691
00:54:09,321 --> 00:54:11,142
and so they¡¦re too frustrated.

692
00:54:11,177 --> 00:54:14,276
And the fourth is simply what I called "too-many-Toyotas"

693
00:54:14,311 --> 00:54:20,772
Coz when the world goes flat and three million people arrived with own god blessed versions of American dreams for them:

694
00:54:20,807 --> 00:54:23,625
a house, a car, a toaster and a microwave oven and a Toyota.

695
00:54:23,660 --> 00:54:25,947
If we don't find an alternative source of energy,

696
00:54:25,982 --> 00:54:34,102
we are gonna burn up, heat up this planet faster than any time in the history of God¡¦s creating the earth.

697
00:54:34,137 --> 00:54:38,083
And all work is gonna be a global struggle with China over oil

698
00:54:38,763 --> 00:54:41,078
coz China's foreign police is very simple.

699
00:54:41,113 --> 00:54:42,853
If summarize it in one sentence:

700
00:54:42,888 --> 00:54:44,629
Taiwan and looking for oil.

701
00:54:44,664 --> 00:54:46,941
That's all China's doing

702
00:54:49,075 --> 00:54:51,462
so for understandable reasons.

703
00:54:51,463 --> 00:54:56,701
Again it gets back to that platform it can tell you a lot about, you know why it's three dollars a gallon.

704
00:55:00,038 --> 00:55:04,287
I don't have a magic cure for any country,

705
00:55:04,322 --> 00:55:12,014
but it does seem to me that what World Bank has identified around those issues of... reform retail is one.

706
00:55:13,906 --> 00:55:16,319
And the other is around how we collaborate with them.

707
00:55:16,354 --> 00:55:19,963
I will give a quick example coz you¡¦¡¦e asking an important question that I've given in the book.

708
00:55:19,998 --> 00:55:25,572
HP did a very interesting project in India. They adopted a village in their business.

709
00:55:25,761 --> 00:55:30,891
One day they woke up and said, ¡§There are billion of people who live on two or three dollars a day,

710
00:55:30,926 --> 00:55:34,509
lot more than live at fifty and a hundred thousand dollars,

711
00:55:34,544 --> 00:55:39,280
and we have to think about how we can actually create products at a profit that will sell to them.¡¨

712
00:55:39,315 --> 00:55:42,864
So they adopted a village. It is in the book, so I don¡¦t remember the village in India.

713
00:55:42,899 --> 00:55:48,937
And they went around to spend six months there just asking people. Try to understand what they need, what they need most:

714
00:55:49,771 --> 00:55:51,244
one of that that HP could provide.

715
00:55:51,279 --> 00:55:55,643
One of things that they discovered was that people really need cameras to take pictures with,

716
00:55:56,364 --> 00:56:00,043
that they need cameras to get licenses, you know, pictures get licenses with.

717
00:56:00,078 --> 00:56:07,284
To get a picture for license, sometimes people have to walk all day from one village to the nearby town that happened to have a photographer.

718
00:56:07,319 --> 00:56:08,659
HP said. ¡§No problem.

719
00:56:08,694 --> 00:56:09,722
We do pictures, you know.¡¨

720
00:56:11,251 --> 00:56:17,576
So they said giving cameras, and the other is printers it can print out pictures.

721
00:56:17,611 --> 00:56:19,754
No problem. Then they discovered no electricity.

722
00:56:21,187 --> 00:56:23,058
So they thought about that for a while, 

723
00:56:23,093 --> 00:56:29,426
And they said, ¡§No problem. Solar-powered cameras and picture printers.¡¨

724
00:56:29,461 --> 00:56:35,662
And they developed a mobile solar-powered picture lab, basically photography and printer.

725
00:56:36,384 --> 00:56:41,575
And they gave it to a women's NGO in this town, in this village they are working in.

726
00:56:42,439 --> 00:56:46,278
They want to see how they would use, whether it could produce a business.

727
00:56:46,313 --> 00:56:52,270
Well, what they discovered first of all, say, guess what, you know in India villages like anybody else, they love pictures.

728
00:56:52,305 --> 00:56:57,721
So suddenly they want a family picture, wedding pictures, pictures when the visitors came to town.

729
00:56:57,756 --> 00:57:02,665
So sort of all kinds of, these women developed a great business out of this.

730
00:57:03,923 --> 00:57:10,313
After a year, HP came to them. ¡§That's great. So great you guys have a business! Give us our camera back.¡¨

731
00:57:12,313 --> 00:57:16,802
And they said, ¡§What do you mean? What're you talking about? We've got a business going here.¡¨

732
00:57:19,190 --> 00:57:24,489
HP said, ¡§You can keep the camera if you can come up with a business plan.

733
00:57:24,524 --> 00:57:28,249
Will you pay us?

734
00:57:28,284 --> 00:57:31,137
Pay fixed amount a month, for the paper and for rental the camera.¡¨ And they did.

735
00:57:32,185 --> 00:57:34,842
Coz that's only way sustainable as only gets a scale.

736
00:57:34,877 --> 00:57:37,657
If it's, you know, sustainable in that way

737
00:57:37,692 --> 00:57:39,419
so collaborating that way,

738
00:57:39,454 --> 00:57:41,550
not just coming say what you people need is this,

739
00:57:41,585 --> 00:57:48,604
but really getting down, very low, understanding what people need and then trying to design solution around their life.

740
00:57:48,639 --> 00:57:51,387
I think that's part of the answer.

741
00:57:53,693 --> 00:57:54,715
That's one. The student. Yeah! All of a way, you look like a student

742
00:57:56,291 --> 00:58:00,150
(Student 2) What are the implications of these ideas bring the inspirations by MIT?

743
00:58:00,185 --> 00:58:03,071
(Friedman) What the implications for MIT? Wow!

744
00:58:04,647 --> 00:58:10,935
That's why I have been here all day! Really think about it and having the pleasure to talk about.

745
00:58:10,970 --> 00:58:17,207
I think the open university you're doing is really a pioneering thing. I think it's incredible.

746
00:58:17,242 --> 00:58:18,975
I've learned more about it today.

747
00:58:19,010 --> 00:58:26,712
I think it's an enormously powerful platform that is going to. I am certain inspire a lot more copy cats. 

748
00:58:26,747 --> 00:58:29,834
That's part of the answer to this young man's question as well:

749
00:58:30,370 --> 00:58:32,833
making that knowledge available.

750
00:58:32,868 --> 00:58:34,977
I even think what's going on today is really exciting.

751
00:58:35,012 --> 00:58:37,784
We¡¦re connecting all the knowledge pool in the world together.

752
00:58:37,819 --> 00:58:39,505
That's what the flat world means.

753
00:58:39,540 --> 00:58:43,448
What your open university is doing is actually a key connecter on all of that.

754
00:58:43,483 --> 00:58:46,560
So I think that you should trigger a huge period of innovation,

755
00:58:46,595 --> 00:58:53,880
because the next breakthrough bioscience could come a fifteen... Motorola is working on a twelve dollar cell phone now.

756
00:58:53,915 --> 00:59:00,233
So twelve dollar Internet enables cell phone that can download Google and MIT's open university and wow!

757
00:59:00,268 --> 00:59:04,187
Who knows what's the next innovation in bioscience will come from?

758
00:59:04,222 --> 00:59:08,299
Maybe a fifteen year old in Romania who downloads human genome, you know.

759
00:59:09,788 --> 00:59:13,964
So I think what you are doing is really, really powerful.

760
00:59:13,999 --> 00:59:17,143
I guess one of the things of the themes of our discussions today here has been.

761
00:59:18,013 --> 00:59:23,101
I think our country is really heading in a wrong direction at the macro level on this subject.

762
00:59:25,165 --> 00:59:29,052
I'm not here to be cute, but we got people that bring respect.

763
00:59:29,087 --> 00:59:32,294
We have movie theaters in Kansas that won't show movies on evolution, you know,

764
00:59:32,329 --> 00:59:38,357
at the time when the world is going in this direction, and we stand to be the greatest beneficiaries of it.

765
00:59:38,392 --> 00:59:40,436
I think if we have all the secrets of the sources:

766
00:59:40,471 --> 00:59:42,154
the country¡¦s great research universities,

767
00:59:42,189 --> 00:59:45,163
still rule of law, efficient markets,

768
00:59:45,198 --> 00:59:47,556
intellectual property protection,

769
00:59:47,591 --> 00:59:50,523
but we are not tending to the secrets of ourselves. 

770
00:59:51,532 --> 00:59:55,547
Last year, the National Science Foundation cut its budget by 100 million dollars.

771
00:59:55,582 --> 00:59:59,580
That's just...,I mean, we had its budget cut by congress by a hundred million dollars, excuse me.

772
01:00:00,814 --> 01:00:03,070
I mean that's just flat out stupid, you know.

773
01:00:03,926 --> 01:00:08,334
In this moment in time when the world is flat and the world is going, you know.

774
01:00:14,340 --> 01:00:16,404
What I really feel and what I argue in this book is that

775
01:00:16,439 --> 01:00:18,570
we¡¦re in a quiet crisis right now.

776
01:00:20,051 --> 01:00:25,686
And a Quiet crisis is that... This is a term coined by Shirley Ann Jackson who's a graduate of MIT.

777
01:00:25,721 --> 01:00:32,097
She's the president of Rensselaer Polytech, first African American woman to win a PhD in physics from MIT.

778
01:00:33,474 --> 01:00:35,770
And, she calls it the quiet crisis.

779
01:00:35,805 --> 01:00:36,908
She calls it that because

780
01:00:36,943 --> 01:00:45,387
she was part of that generation inspired to go into science and engineering by Sputnik and President Kennedy's vision of putting a man on the moon.

781
01:00:49,116 --> 01:00:52,666
And that generation is retiring and dying out

782
01:00:52,701 --> 01:00:54,436
and, we all know, we didn't replace them.

783
01:00:54,703 --> 01:00:59,153
We imported them, their replacement, from India and China,  among other places.

784
01:01:01,810 --> 01:01:03,761
Since 911, two things have happened:

785
01:01:03,796 --> 01:01:05,097
One is the world went flat

786
01:01:05,132 --> 01:01:08,952
And when the world goes flat, you can innovate without having to emigrate.

787
01:01:09,729 --> 01:01:13,650
And when you can innovate without having to emigrate, who needs to come to chilly Boston?

788
01:01:13,685 --> 01:01:15,629
When you could stay home, in your own culture,

789
01:01:15,664 --> 01:01:20,756
live a very high standard of living, work for a cutting-edge global corporation, in cutting-edge science,

790
01:01:20,791 --> 01:01:23,108
and be home with your family.

791
01:01:23,998 --> 01:01:30,236
And second thing that happened was 911. And so we're telling all the first rung intellectual draft choices in the world to stay home.

792
01:01:31,473 --> 01:01:34,246
You want to went through our airport? No, no, we don't want you here. You know, I'm sorry.

793
01:01:38,104 --> 01:01:43,056
And so actually, the theme of my conversations today with different folks that interacted with is that

794
01:01:43,091 --> 01:01:48,105
I'm really worried. I mean the story I've told today is

795
01:01:48,140 --> 01:01:49,929
just triggers. The point is that¡K

796
01:01:49,964 --> 01:01:55,365
My daughter for National History Day, which she's in 8th grade representing Maryland.

797
01:01:55,936 --> 01:01:59,098
Her project was: How Sputnik led to the Internet.

798
01:01:59,133 --> 01:02:03,006
You know Sputnik let to DARPA, let to DARPA Net, let to

799
01:02:03,041 --> 01:02:05,651
something that happened 50 years ago,

800
01:02:06,292 --> 01:02:08,850
in reaction to something totally different.

801
01:02:08,885 --> 01:02:13,067
Our reaction to Sputnik leads to the Internet today.

802
01:02:13,683 --> 01:02:15,115
What I really worry about

803
01:02:15,868 --> 01:02:18,107
is our reaction to 911:

804
01:02:18,142 --> 01:02:20,731
a thousand little steps,

805
01:02:20,766 --> 01:02:33,057
From a visa rejection by a visa officer in Sinai, to a grant proposal denied to a research. You know, paper blocked,

806
01:02:33,092 --> 01:02:36,907
to funds not spent, or funds spent somewhere else.

807
01:02:36,942 --> 01:02:41,517
That we could get the total sum of these things

808
01:02:41,552 --> 01:02:50,838
would be something that really eats at the very DNA of openness, interoperability, and interactiveness with the world,

809
01:02:50,839 --> 01:02:52,961
i.e. the American DNA.

810
01:02:53,933 --> 01:03:00,253
And at 50 years we'll wake up and said, ¡§We did all of that in reaction to 911.¡¨

811
01:03:00,853 --> 01:03:04,396
And so I really, really worry about that.

812
01:03:04,431 --> 01:03:08,540
I think we're in a quite crisis right now. That's part of the quiet crisis.

813
01:03:08,575 --> 01:03:10,218
The other part is simply¡K

814
01:03:10,253 --> 01:03:13,565
You know the time when I think we need a new ¡¥New Deal¡¦

815
01:03:13,600 --> 01:03:16,608
to deal with flatism  and all the implications of it.

816
01:03:16,705 --> 01:03:19,961
We have an administration trying to take  apart the old ¡¥New Deal¡¦

817
01:03:21,187 --> 01:03:25,474
and that's just like loopy from my point to view at this time.

818
01:03:25,509 --> 01:03:30,428
I think with the fixed social security, maybe private account maybe not, there's argument for both but

819
01:03:31,179 --> 01:03:36,059
it is surely, in my view, NOT the most important priority for this country.

820
01:03:36,094 --> 01:03:38,355
So we're in a quite crisis.

821
01:03:41,760 --> 01:03:42,990
So we're in a quite crisis

822
01:03:43,025 --> 01:03:45,213
as my friend Paul Romer says,

823
01:03:45,248 --> 01:03:48,086
¡§A crisis is a terrible thing to waste.¡¨

824
01:03:51,406 --> 01:03:52,854
One more from up there

825
01:03:53,773 --> 01:04:24,195
(Student 3) You said that everyone can plug and play is competing in equalized field. Is there other result on something highly focused?  Say, for example, electric power. If everything else from distribution to maintenance and supply is spread throughout, doesn¡¦t it make subject of what you¡¦ve done and kept in very isolated, geographically or whatever¡K¡¨

826
01:04:24,230 --> 01:04:25,723
(Friedman) I don't really think so.

827
01:04:25,758 --> 01:04:31,284
I see the trends really...I will just go back to the 12-dollar-Motorola-phone,

828
01:04:31,319 --> 01:04:33,204
and Google hookup,

829
01:04:33,239 --> 01:04:36,579
and MIT's Open University.

830
01:04:36,614 --> 01:04:42,067
It seems to me this has the potential to be enormously democratizing at the same time.

831
01:04:43,075 --> 01:04:51,533
So I don't think those trends may manifest themselves.
I wouldn't say they won't, but it doesn't seem to me inevitable or certain that that would be the only thing that happens.

832
01:04:51,568 --> 01:05:00,343
(Voice) What happened to the second tier players? Get more Open Courseware?

833
01:05:03,772 --> 01:05:07,594
(Friedman) You asked that, I didn't say that, okay? Everybody takes his notes.

834
01:05:15,601 --> 01:05:22,512
I think that we're a long, long way from everybody being able to learn by just downloading MIT software.

835
01:05:23,142 --> 01:05:28,798
I think I really believe that, you know, the role of schools and interaction and teachers.

836
01:05:30,662 --> 01:05:36,125
And what you called the second tier players are still gonna be very very important for a long time.

837
01:05:37,388 --> 01:05:39,277
It seems to me that

838
01:05:41,172 --> 01:05:43,125
one of things that's kinda missed in the discussion is that

839
01:05:43,160 --> 01:05:48,690
when the world goes flat like this it seems when two things happened, and we only focused on one.

840
01:05:48,725 --> 01:05:50,256
One is the global market increases

841
01:05:50,291 --> 01:05:52,864
Both the supply of labor and, the supply of consumers.

842
01:05:52,899 --> 01:05:55,689
Because we're connecting all these pools together

843
01:05:56,506 --> 01:06:01,184
But I think what people miss is that it doesn¡¦t just increase, it gets more complex faster.

844
01:06:01,219 --> 01:06:05,152
When it gets more complex faster means it produces more and more new jobs,

845
01:06:05,187 --> 01:06:07,145
more and more new niches.

846
01:06:07,785 --> 01:06:11,738
So, an example,I would like to give is, your mom, dad out there won¡¦t be surprised,

847
01:06:11,773 --> 01:06:15,897
if your son or daughter comes home and says, ¡§I wanna be a search engine optimizer when I grow up.¡¨

848
01:06:16,921 --> 01:06:18,241
You scratch your head.

849
01:06:18,276 --> 01:06:21,345
¡§You could be an accountant, you could be an ophthalmologist

850
01:06:21,380 --> 01:06:24,234
You¡¦ve got to be a search engine optimizer? What is that?¡¨

851
01:06:24,269 --> 01:06:26,174
Well, six years ago Google didn't exist.

852
01:06:26,791 --> 01:06:33,264
And now as a result of Google, a whole new industry has been sprawn, called ¡¥search engine optimizing¡¦.

853
01:06:33,299 --> 01:06:40,114
So if I go onto Google and I type in "suitcase",  and Thomas Friedman's suitcase comes up before Samsonite's suitcase,

854
01:06:40,149 --> 01:06:42,602
millions of dollars are at stake.

855
01:06:42,637 --> 01:06:46,802
So, just a tiny example, the market isn't just growing, it's getting more complex.

856
01:06:47,370 --> 01:06:51,690
So it seems to me that  the worst thing if you're a knowledge person that's gonna happen to you over time is that

857
01:06:51,725 --> 01:06:55,673
you¡¦ll have to move horizontally into a different knowledge job.

858
01:06:56,985 --> 01:07:03,087
If you're not in the knowledge world, then you've gotta move vertically, and the vertical leap is going to get higher and higher as we go along.

859
01:07:03,122 --> 01:07:06,045
And that's why the challenge I think for our society

860
01:07:06,080 --> 01:07:10,733
is how to get more people in the non-knowledge world into the knowledge world.

861
01:07:12,908 --> 01:07:19,477
And that's why, to me, the priority today would not be social security private accounts.

862
01:07:19,512 --> 01:07:24,161
It would be how to insure that every American who wants to share education:

863
01:07:24,196 --> 01:07:28,577
technical school, college or community college,

864
01:07:28,612 --> 01:07:29,961
is able to get it.

865
01:07:29,996 --> 01:07:33,599
I think that is the absolute priority of our society today.

866
01:07:33,634 --> 01:07:36,539
If you want to have a stable and equal society,

867
01:07:36,574 --> 01:07:41,346
for not just for the geniuses who can plug and play from anywhere,

868
01:07:41,381 --> 01:07:42,802
but for everybody else.

869
01:07:44,970 --> 01:07:47,289
And so, that's why I'd be putting my focus right now.

870
01:07:49,474 --> 01:07:51,394
I would take one more quick when done, yeah, you!

871
01:07:53,054 --> 01:08:13,041
(Student 4) I¡¦m just scared about the future in terms of jobs, because it's always gonna be cheaper if you have people of knowledge base. It's gonna be cheaper for almost anywhere else except for Europe, to hire people. So does it mean, like, you know, jobs like hairdressing will gonna be the one where acutally face to face with people? 

872
01:08:13,076 --> 01:08:16,834
(Friedman) It¡¦s true to some extent, but, gosh, it seems to me that would have been true after WWII also.

873
01:08:16,869 --> 01:08:23,225
I mean we stood to drive the world. We're the only industrial base. Japan was decimated, Asia was decimated, Europe was decimated.

874
01:08:23,260 --> 01:08:24,550
We did the craziest thing in the world.

875
01:08:24,585 --> 01:08:30,481
We built both of them up into competitors and that result was everybody's standard of living in the end rose.

876
01:08:30,516 --> 01:08:34,313
They caught up to us and we, then together, went ahead.

877
01:08:34,348 --> 01:08:39,838
And that's because the market doesn't just get bigger, it gets more complicated. People then specialize in different things.

878
01:08:40,051 --> 01:08:41,983
And because that's hard to see.

879
01:08:42,792 --> 01:08:46,133
It¡¦s hard to see 6 people being hired at the search engine optimizing firm

880
01:08:46,168 --> 01:08:50,556
and easy to see, you know, 250 people being laid off at the call center.

881
01:08:50,591 --> 01:08:54,014
That I think you missed that phenomenon.

882
01:08:54,049 --> 01:08:54,598
Really quickly, you

883
01:08:55,768 --> 01:08:59,135
(stuent 5)How do you keep an open societly safe?

884
01:08:59,808 --> 01:09:01,278
(Friedman) Gotta go sign the book now.

885
01:09:04,333 --> 01:09:06,846
You know you always regret taking the last question.

886
01:09:10,021 --> 01:09:14,048
It¡¦s actually though, in some way it's in the last chapter of the book

887
01:09:16,127 --> 01:09:16,910
because...

888
01:09:16,945 --> 01:09:20,263
there's always a tie-in.

889
01:09:21,337 --> 01:09:24,934
What I argued in the last chapter of the book which is called ¡¥9-11 or 11-9¡¦.

890
01:09:25,941 --> 01:09:29,023
Because, what I basically argue, when the world gets flat,

891
01:09:30,333 --> 01:09:32,163
everything basically gets commoditized,

892
01:09:32,198 --> 01:09:33,796
except one thing, 

893
01:09:33,831 --> 01:09:35,364
and that's imagination.

894
01:09:36,931 --> 01:09:40,061
The tools for collaboration are going to be made available to everyone

895
01:09:40,096 --> 01:09:43,014
and the flat world is a friend of Mphasis and Al-Qaeda.

896
01:09:43,049 --> 01:09:45,974
Al-Qaeda is just an open source global supply chain.

897
01:09:46,009 --> 01:09:47,582
So all it is today.

898
01:09:48,286 --> 01:09:51,255
So they both play off the flat world.

899
01:09:51,895 --> 01:09:54,494
The real differentiator,

900
01:09:54,529 --> 01:09:56,749
if the tools are going to be available to everyone,

901
01:09:56,784 --> 01:09:58,614
is what you do with those tools?

902
01:09:58,649 --> 01:10:00,806
What imagination you bring to them?

903
01:10:00,807 --> 01:10:03,461
And what we saw in the last two decades is,

904
01:10:03,496 --> 01:10:06,581
what I argue, two competing forces of imagination.

905
01:10:06,616 --> 01:10:10,293
One: the imagination of 11-9 that brought down the Berlin Wall, 

906
01:10:10,328 --> 01:10:13,429
And another imagination of 9-11 that brought down the Twin Towers.

907
01:10:14,116 --> 01:10:18,597
Some one in Hungary, in September, 1989¡K

908
01:10:18,632 --> 01:10:20,124
I don't know who he was

909
01:10:20,159 --> 01:10:23,387
but somebody said, ¡§Imagine¡K

910
01:10:23,422 --> 01:10:29,298
imagine if our border to East Germany opens,

911
01:10:29,333 --> 01:10:31,499
and then we open our border to Austria,

912
01:10:31,534 --> 01:10:36,914
all these people from East Germany could come out to Hungary and out the back door to Austria. 

913
01:10:36,949 --> 01:10:38,802
That could bring down the Berlin Wall.¡¨

914
01:10:38,837 --> 01:10:40,658
Somebody said that.

915
01:10:41,315 --> 01:10:44,203
Unfortunately we also know that

916
01:10:44,238 --> 01:10:46,586
In Kandahar in Afghanistan

917
01:10:46,621 --> 01:10:54,067
Someone said, ¡§Imagine if we hit the Twin Towers between the 94th and 98th floors, we could bring them down.¡¨

918
01:10:54,102 --> 01:10:58,028
And those are the two competing forms of imagination in the world today.

919
01:10:58,740 --> 01:11:03,098
It seems to me that, it sounds ridiculous even to say this,

920
01:11:03,133 --> 01:11:04,625
but this is our challenge:

921
01:11:04,660 --> 01:11:07,459
how do we get more people to have a positive imagination?

922
01:11:08,243 --> 01:11:11,995
Because that is the most important strategic issue of our day.

923
01:11:12,588 --> 01:11:19,045
Because the tools are open, and there aren't enough police to police every opening in the open society.

924
01:11:19,080 --> 01:11:23,574
And so the software has to be internal, not external.

925
01:11:26,246 --> 01:11:31,077
And, how you do that? I tossed out my own ideas in the last chapter,

926
01:11:31,112 --> 01:11:37,812
about just how you get more people to have a positive imagination.

927
01:11:37,847 --> 01:11:40,028
One example I give actually is eBay.

928
01:11:40,891 --> 01:11:42,675
eBay is like a country.

929
01:11:42,710 --> 01:11:45,176
It¡¦s the closest thing to a virtual country.  There is, you know,

930
01:11:45,211 --> 01:11:48,243
hundred-billion-dollar economy, 38 million people.

931
01:11:49,276 --> 01:11:53,059
Meg Whitman, the head of eBay told me this wonderful story for the book.

932
01:11:53,094 --> 01:11:54,379
Right after they went public,

933
01:11:57,107 --> 01:12:00,451
stocks going up 80 dollars, right at the height of the .com bubble,

934
01:12:00,486 --> 01:12:02,202
Down 50, up 80.

935
01:12:02,237 --> 01:12:04,547
So she's in office one day

936
01:12:04,582 --> 01:12:07,235
and the secretary comes in. (She tells the story in the book.)

937
01:12:07,270 --> 01:12:10,475
And the secretary says, ¡§It's Arthur Levit on the phone.¡¨

938
01:12:11,059 --> 01:12:13,794
Arthur Levit was head of the Security Exchange Commission.

939
01:12:13,829 --> 01:12:18,327
You don't wanna get a phone call from Arthur Levit, you know, your stock going up and down.

940
01:12:20,424 --> 01:12:22,920
She calls in the chief legal counsel

941
01:12:24,336 --> 01:12:25,567
and they put them on the speaker phone.

942
01:12:26,207 --> 01:12:30,911
She says ¡§Hi, this is Meg Whitman.¡¨ (She tells it in a wonderful way.)

943
01:12:30,946 --> 01:12:33,130
And he says, ¡§Hi! This is Arthur Levit.¡¨

944
01:12:34,690 --> 01:12:37,568
He says, ¡§I'm just calling¡K I noticed you just went public and how did it all go?

945
01:12:37,603 --> 01:12:40,101
Did the FCC do their job?... you know.¡¨

946
01:12:41,853 --> 01:12:43,213
"Wonderful! Couldn't be better!" she says,

947
01:12:43,248 --> 01:12:44,396
"Everything totally smooth!"

948
01:12:46,637 --> 01:12:49,860
And then he says. ¡§Well, there is another reason for my phone call.

949
01:12:51,636 --> 01:12:57,428
I just got my first blue star on eBay for having 10 trades that were approved by other people.

950
01:13:02,455 --> 01:13:05,203
And I just wanna tell you how exciting that was!¡¨

951
01:13:06,522 --> 01:13:09,913
He trades in pre-depression era glass, evidently.

952
01:13:12,698 --> 01:13:15,184
And Meg told me this story because

953
01:13:15,219 --> 01:13:20,281
she just said, ¡§Everybody loves to get a blue star. :)¡¨

954
01:13:22,064 --> 01:13:25,232
Everybody loves positive affirmation.

955
01:13:25,267 --> 01:13:34,842
And where in the world can more people get up, and see people say nice things about them than eBay, every morning? If you're a good citizen, you know,¡K

956
01:13:39,343 --> 01:13:43,702
So, what I'm really talking about is a kind of what the village does, and eBay is a good example of it.

957
01:13:44,383 --> 01:13:47,766
How you get more people to have a positive imagination?

958
01:13:49,501 --> 01:13:52,709
I think that's a really hard challenge, but it is a strategic issue.

959
01:13:52,744 --> 01:13:55,582
And it starts with America, seems to me,

960
01:13:55,617 --> 01:13:58,113
that goes back to exporting hope, but not fear.

961
01:14:06,215 --> 01:14:07,960
You know, when we¡K well, people love to make fun of America

962
01:14:08,559 --> 01:14:12,431
Our naivety, our crazy optimism, we think every problem has a solution.

963
01:14:12,466 --> 01:14:15,002
I mean those silly stupid Americans, you know.

964
01:14:15,037 --> 01:14:18,649
But at the end of the day, they envy that naivety.

965
01:14:18,684 --> 01:14:23,601
And American optimism is really critical for keeping the world to go around.

966
01:14:24,305 --> 01:14:25,696
And when we export fear instead of hope,

967
01:14:25,731 --> 01:14:27,839
We end up importing everyone else's fears.

968
01:14:28,559 --> 01:14:32,447
And that's the sort of habit we've gotten into since 9-11.

969
01:14:32,482 --> 01:14:36,562
So with that thought go out and export hope, not fear, okay?

970
01:14:36,597 --> 01:14:37,442
Thanks very much!

971
01:14:37,477 --> 01:14:40,393
By the transcriber: I also wish that what we're doing is exporting hope

972
01:14:40,428 --> 01:14:44,292
No matter how small the seeds of our hope are

973
01:14:44,327 --> 01:14:46,399
With soil, they grow to giant trees

974
01:14:46,434 --> 01:14:48,302
Though at last we may face our failure and oblivion

975
01:14:48,337 --> 01:14:52,945
But the dove of our spirits never rest

976
01:14:52,946 --> 01:14:55,727
Transcribed by OOPS

977
01:14:55,728 --> 01:14:58,590
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