1. Introduction:
Technological advancements and their convergence with events have allowed many countries to become part of the global supply chains. The success of globalization created an explosion of wealth in these countries. With the “flattening” of the globe the world has become small and fast for human beings and their political systems to stabilize. Thomas L. Friedman, in his book “The World Is Flat,” (2005, Pg.488) clarified to us the new world unfolding before our eyes. He explains how the flattening of the world is taking place in the early 21st century and its implication on countries, communities, individuals and businesses. In his book, Friedman identified ten forces that flattened the world.
What is the concept of flattening? It is the process of change from vertical political, economic and social relationship to a horizontal one. In a vertical relationship, a totalitarian system of government dictates all aspects of lives. The economy is centrally planned in which the private sector has little or no role. With the advancement of technology vertical relationships were reduced to horizontal relationships in which cooperation replaced dictatorship. This transformation from vertical to horizontal relationship is known as “flattening.” With the flattening of the world, we entered the age of digitization, virtualization and automation of almost everything. Those countries that absorb the new technological tools will have great gains in productivity that are overwhelming for companies, communities, and individuals. As we enter this phase of history people will have access to these technological tools as innovators and collaborators. With globalization the “world goes from round to flat.” Everywhere, vertical hierarchies are challenged from below, transforming into more horizontal and collaborative ones with the help of flatteners. The ten flatteners are: Walls that came down (the Berlin Wall) and Widows that went up; the Web brouser (Netscape, Microsoft), Workflow Software, Open-Sourcing, Out-Sourcing, Offshoring, Supply-Chaining, Insourcing, In-forming, and The Steroids
2. The Forces that Flattened the World:
Friedman has identified ten flatteners that transformed vertical relationships to horizontal and collaborative ones. Here, we begin with the first five flatteners:
2.1 Walls that came down and Windows that went up: Friedman associates the first flattener with the fall of the Berlin Wall in 1989, which liberated the captive peoples of the Soviet 2
Empire. It changed the balance of power in favor of those who advocated for “democratic, consensual, free-market-oriented governance.” Authoritarian rule and centrally planned economies were discarded. The Cold War, which was a struggle between capitalism and communism, came to an end. There was one system left. Everyone had to orient himself with capitalism. Hence, most economies would be governed from the bottom-up by the interests and aspirations of the people, rather than top-down, by the interests of the ruling elites. Those who wanted to stay with authoritarian and centrally planned economies found themselves on the wrong side of history.
Those on the wrong side of history had to discover that communism made all “equally poor.” On the other hand, capitalism made people “unequally rich;” and this did not make comfortable those who were privileged and used to limited but secure jobs, houses, pension, and education in a socialist state. We do not forget, however, that K. Marx argued advanced capitalism will in the long-run transform into communism in which people own everything. They take according to their needs and contribute according to their ability. In the meantime capitalism advances with the help of the “flatteners.”
The fall of the Berlin Wall strengthened capitalism and unlocked the energies and ambitions of millions of people. People started to think globally. The outbreak of freedom had a flattening effect across societies. It strengthened those below and weakened those above. The monopoly of information by totalitarian governments was broken down by the modern tools of information technology, such as IBM and Windows. These tools improved horizontal communication deterring top-down or vertical system of totalitarian rule. These modern tools of communication were user-friendly and people could use them to improve their productivity. They led to a huge advance in personal empowerment. But, this was only the first revolution of the PC-Windows net-work.
2.2 The Web Browser: There was a need for a second flattener if the world is to become really interconnected. The world needed to move from a PC-based computing system to an internet-based one. An important application that drove the second revolution was e-mail and internet browsing. It was the “Web-browser that captured the imagination.” It could retrieve documents stored on internet Web-sites and display them on any computer screen. The World Wide Web (WWW) is a system for creating, organizing, and linking documents for ease of browsing. Earlier, this was the domain of scientists to share their research outputs. But, later on, the culture of Web browsing for the general public was created by Netscape. It was a call for the world to wake up for the internet. The Netscape drove the flattening process in several ways.
The Netscape made the Internet accessible to everyone. It enabled more people to do different things on the Web. Later on, as people demanded more of the Internet service, their demand had to be satisfied by other operating systems. Windows 95 soon became the operating system 3
used by most people world-wide. Today the browser technology is taken for granted. It was actually one of the most important inventions in the world.
There was strong competition between Internet operating systems. Netscape competed with Microsoft, but lost. It fell victim to the overwhelming competitive pressure from Microsoft. Netscape’s market value fell and it sold to AOL, which did not do much with it.
Technologists realized what the new technologies could do. Businesses were excited about how they could make more money with the new technologies. Other people could see how their children could make money. Investors saw the demand for Internet usage and Internet products would be unlimited. All these groups were stimulated by digitization revolution. Digitization is a process by which words, data, files, pictures, etc. are turned into a combination of digits (1s and 0s) that can be “manipulated on a computer screen, stored on a microprocessor, or transmitted over satellites and fiber-optic lines.” Thus, investors realized the unlimited demand for Internet related products; they invested in it to make huge profits. Customers also reaped unlimited benefits from using Google and Yahoo, the digitization technologies. In the meantime greed crept in both investors and customers. The boom gave birth to economic bubble.
The boom attracted too much investment in the Internet industry. This led to faster innovations. The booms and bubbles became dangerous for the economy. A lot of companies went bankrupt. But, later on they recreated themselves through optimization of of their market operations.
2.3 Work Flow Software: After the first flattener, the Fall of the Berlin Wall and the second flatteners, Windows and Netscape phases, came the third flattener know as Work Flow Software. People wanted more than just “browse and send e-mail, instant messages, pictures and music over the internet platform.” They wanted to shape, design, create, sell, and buy things. They also wanted to keep inventories, workout somebody’s taxes, or read somebody else’s X-rays from half the world away. They wanted to apply these things from anywhere to everywhere from a computer to any computer without limit. The first and second flatteners digitized and transported data and words on the Internet.
To benefit more from the Internet, the flattening process had to go to the next step. For this to happen two things were needed. Programmers were needed to come along and write new applications or software that would enable people to benefit more from their computers. They also needed means of transmission that would allow software applications connect with everyone’s software applications. In other words, there was a need to move from an Internet that just connected people to people to an Internet that would “connect anyone’s software program to anybody’s software program.” 4
Technology companies started to forge more common Web-based standards, more integrated digital system so that anyone could attach his software applications to it. This was a quiet technological revolution. This enabled digitized data, word, pictures, and music to be exchanged between diverse software programs. Once this technical revolution took place, more and more people started writing work flow software programs. Once everyone’s application started to connect work could flow easily. It could be disaggregated and sent to all corners of the world. This means work could flow anywhere. It is not only people that could speak to each other, but applications speak to other applications. This creates a “global workforce of people and computers.” This contributes more to the flattening of the world.
2.4 Open-Sourcing: It is a technology that involves thousands of people all over the world. These people come together on line to collaborate in writing their own software to their own operating systems. They always build from the bottom up. They do not accept formats imposed top-down from corporate hierarchies.
The concept of “open source” comes from the notion that groups would make available the source code to users. Then, they let anyone who has something to contribute or to improve it; they let millions of other people download it for their use for free. While commercial software is copyrighted, open source software is shared and constantly improved by its users and made available to others for free. In return, everyone who comes up with an improvement is encouraged to make it available for others to use it for free.
The “open source movement” is an amazing structure with communities of on-line, who are volunteers that share their insights with one another and offer it to the public for nothing. They do it because “they want something the market doesn’t offer them.” They get satisfaction from creating a “collective product that can beat the products made by giants like Microsoft or IBM.” Above all, they want to gain intellectual respect from their peers. They are indeed controversial and interesting persons. They developed “new forms of collaboration” that have been facilitated by the flat world. They are also flattening it more. “The emerging era is characterized by the collaborative innovation of many people working in gifted communities, just as innovation in the industrial era was characterized by individual genius.”
2.5 Outsourcing: This is the fifth flattener. Outsourcing is a form of collaboration between a supplier and a client. This is common when scarcity of capital threatens the survival of a business enterprise. Venture capital firms see to it that the companies they invest in were finding the most efficient, high quality, low cost means to innovate during bust. In the boom period, it is common for investors to enjoy huge return on the capital invested in a new start-up when it goes public. For venture firms the big question is how to generate good returns? The answer is to start outsourcing as many functions as possible to those who are efficient operators. A company, for example, could outsource its management department to outsiders 5
who are known for efficiency in management activities of any company. Any function of a department or section could be outsourced if it proves to be inefficient, causing loss to the company.
When cost pressures increase a company may face losses. Cost could arise from demand for higher wages, high input prices, and other unforeseen expenses. A losing company would be forced to outsource most or all of its functions to outsiders. Outsourcing helps a company to engage outsiders for their knowledge work. Thus, incremental costs become reduced to zero.
The interdependence created by technological advancement and networks gave real freedom of choice to knowledge workers in how, for whom, and where they worked. These workers are products of an educational system that mostly focused on Institutes of Technology (IT) and management institutes. These institutes are not nominal, but real ones that produce highly qualified knowledge workers. These workers are confident and independent, who could engage in outsourced activities.
These knowledge workers may interact with large companies. As a result they understand how to do business-process implementation and improvement. They transform themselves from maintenance to product companies. Consequently, they develop their own products. In short, outsourcing creates a linkage between knowledge workers and companies. This process transforms experienced knowledge workers into owners of companies. This, however, requires the presence of venture capital to provide knowledge workers with finance to start their business.
3. Conclusion and Recommendation:
3.1 Encourage the flatteners: An authoritarian system of government that controls and commands all aspects of peoples’ lives keeps people in poverty. The economy is centrally planned and the role of the private sector is diminished. Ethiopians had suffered from militaristic and civilian forms of dictatorships for 44 years until April 2010. In these authoritarian systems people lost their property and lives. They were denied basic natural and democratic freedoms. This could be attributed to lack of modern outlook and backward technologies. Because of the deterrent policies of un-elected governments, Ethiopians could not develop modern technologies that could improve their lives. It is, therefore, recommended that we encourage these technologies for flattening vertical relationships into horizontal ones.
3.2 Develop Modern Institutes of Technology and Management that Produce Knowledge Workers:
A developing country needs competent and confident technical personnel. Competence instills confidence in technical people, who could establish their own firms after having experience in 6
outsourced activities. Knowledge workers should be encouraged to link with large companies that are on the verge of bankruptcy due to problems of productivity. These companies may be on the verge of losing their business due to marketing, finance and production problems. They could be saved through outsourcing their failing departments, sections or units. In Ethiopia, there is the experience of, for example, outsourcing protection and guarding of business entities. This experience could be extended to outsourcing departmental activities to outsiders. Technical and financial activities could also be outsourced.
Knowledge workers are products of an educational system that mostly focused on developing Institutes of Technology and Management (ITM). These institutes are not nominal, but real ones that produce highly qualified knowledge workers.
We, therefore, need to develop “modern and real institutes” of technology and management, including existing ones that would produce qualified knowledge workers, who create jobs for themselves and for others. Of course, knowledge workers should be provided with development loans, the flow of which is strictly related to performance, and supervised by the lending banks.
The Ethiopian Herald Sunday June 9, 2019
BY GETACHEW MINAS
