A Flatter World

In his recent book, The World Is Flat: A Brief History of the Globalized World in the 21st Century, Fingar notes, Pulitzer Prize-winning New York Times columnist Thomas Friedman argues that this period will be remembered not for military conflicts or political events, but for the "flattening" of the world in a whole new age of globalization. Friedman says the explosion of advanced technologies has engendered sudden connections between knowledge pools and resources from all over the planet, levelling the playing field as never before. In this wired world, Indian accountants or software engineers can now share an idea, team their skills or compete head-on for work with their US or European counterparts, and professionals around the globe can work from home as if they were in offices next door to each other.

Friedman calls it the third wave of globalization - the first being the age of British imperialism, and the second that of the trans-national organization, under which companies under the benign auspices of a US superpower have become more powerful than governments. ("The story he tells about that I thought was pretty cool was that when India and Pakistan were getting ready to go to war over Pakistan's testing of its atomic bomb, Friedman claims there were phone calls from businesspeople into India saying: 'If you start that, we are pulling all of our operations out of India today because it will no longer be stable'," Fingar says.)

In this third wave, responding to people power will become the only game in town and talent will become an enterprise's most valuable commodity. The three "smart kids" in India who comprise the research team for Fingar's new book provide one compelling example, and the private company in India that is now teaching in the public education system in Singapore is another. Even hospitals and pharmaceutical companies find their business models at extreme threat under the weight of globalization, as Westerners unable to afford health insurance seek discount health provision from emerging economies. And all at a time when Western governments seem intent on devaluing even more our public education systems and the weight we give to innovation and research.

The Innovation Imperative

The backlash against outsourcing that gripped the US after the oil crisis of the 1970s, and then after Japan started to assert its supremacy in manufacturing, inspired Sam Walton to attract customers to what has now become the Earth's largest company, Wal-Mart, using the slogan "Made in America". Today, Wal-Mart might as well be a province of China, Fingar says, since 80 percent of the product it sells is made in that country. That's one manifestation of the extreme supply chain, another factor driving business reformation.

Then there is the opening up of countries like Russia, India and China to capitalism.

"Using Thomas Friedman's words: 'They're not racing us to the bottom with cheap labour, they're racing us to the top'," Fingar says. "They want to become the innovators and control the markets. The CEO of Intel recently said, essentially, 'We don't have to be an American company any more; a lot of our innovation work is being done in Asia'. So if you've got the innovation design happening there and then if you look for example at the number of PhDs in science and technology coming out of India and China, you know Silicon Valley, like Hollywood, has no more exclusive right on innovation.

"An example I came across is that of Samsung jumping ahead of Nokia. Nokia got lazy after they grabbed the market and I think when the first clamshell flip-phones came out by Samsung they moved right ahead with the video or the camera phone. So the point is we're looking at what I call the globalization of white-collar work. Sixty percent of the researchers for GE Labs, which is the old Thomas Edison labs in New York, are in India and Shanghai. And guess what one of the projects is that they're working on? They're working on reinventing the light bulb. Some kind of low heat new technology for light bulbs is being developed over there.

"As Friedman writes: 'Young Indian and Chinese people aspire to design the next wave of innovations and dominate those markets. Good jobs are being outsourced to them not simply because they'll work for less, but because they are better educated in the maths and science skills required for 21st century work.'

"When was the last time you met a 12 year old who told you he or she wanted to grow up to be an engineer? When Bill Gates goes to China, students hang from the rafters and scalp tickets to hear him speak. In China, Bill Gates is Britney Spears. In America, Britney Spears is Britney Spears," Fingar says.

"We need a Bill Cosby-like president to tell all parents the truth: Throw out your kid's idiotic video game, shut off the TV and get Johnny and Suzy to work, because there is a storm coming their way," Fingar adds. "Get ready for the Global Innovation Wars and process-based competition."