07 Jan 2009  What Do YOU Think?

Is the World Really Flat?

A provocative new book, The Venturesome Economy, argues that the world isn't flat at all, says HBS professor Jim Heskett. But in supporting innovation, does flatness even matter? Readers around the world weighed in with a constellation of viewpoints. (Online forum now closed; next forum begins February 5.)

 

Summing Up

In supporting innovation, does it matter how flat the world really is? "The world is oval!" (Hujaj Ali Nawazkhan). "[T]he world is flatly circular" (Santhanam Krishnan). "[T]he flattening process, while occurring, is highly uneven in its pace, extent, and effects" (Alex Evans). "It really doesn't matter whether the world is flat or not. Most value is added by the exploiters, not the creators, and that works in both (flat and non-flat) environments" (Gerald Nanninga). These comments, among others, reflected many of the thoughts generated by this month's column.

Bruce Bockmann stated the case for the "flat-worlders" in reminding us that "it is the responsibility of government to support technology in its own country. If government does that, the capital and entrepreneurs will follow ... capital and management seek efficiency, and being close to the technology is efficient." Further, William Halveson pointed out that "CRADA agreements can limit how fast the high level discoveries escape."

Abbey Mutumba, on the other hand, said that "Most innovations now take place at the users' end...." As John Arnott put it, "Entrepreneurship is the motor that gets technology to market." According to Kamal Gupta, "Scientific research and technological innovations create new products, but the top line and bottom line come from entrepreneurial innovations...." Adnan Younis Lodhi added: "With the virtual mobility of global labor insured, only those companies and nations will grow ... that make the best use of entrepreneurial qualities...."

How governments should spend money in support of innovation clearly depends on one's view of just how flat the world is. On this question, those who addressed the issue at all played it quite safely. For example, C. J. Cullinane wrote, "[I]nvest at the basic high school and college level in math and science. Small business should get tax breaks as well." After largely accepting author Amar Bhide's arguments, Kamal Gupta concluded that "governments should fund education in math and science ... Markets will take care of entrepreneurial innovation."

Jay Somasundaram asked whether we are even asking the right question. In his words, "The critical problems of this century are war, massive income disparity, non-sustainable use of resources, and discontent. What we need most is not innovation from the physical sciences ... but innovation from the social sciences."

Is the world really flat when it comes to innovation in the physical sciences? Or is that even the right question? What do you think?

Original Article

That's the question posed by Amar Bhidé in his new book, The Venturesome Economy. Disputing Thomas Friedman, author of The World is Flat, Bhidé concludes that: (1) it isn't, and (2) arguments by Friedman and others—whom he labels as "techno-nationalists"—fail to recognize how innovation that matters really occurs and aren't always helpful to long-term global or even U.S. development.

Bhidé's conclusions are based on interviews with a large sample of start-up entrepreneurs as well as economic analysis. He's concerned with the complex set of relationships in a three-by-three matrix composed of high/mid/ground-level products and services and high/mid/ground-level know-how—for example, developers of high-level (think microprocessors), mid-level (motherboards), and ground-level (laptop computers) products and services as well as high-level (solid state physics), mid-level (circuit designs), and ground-level (management of a specific fabrication plant) know-how for each product or service (in this case, microprocessors).

His conclusions are, among others, that: (1) it doesn't matter where in the world high-level research takes place, because (2) its findings travel easily and at relatively low cost, but that (3) as one progresses from high-level to ground-level products and services and from high-level to ground-level know-how, ideas travel less easily. The work associated with them is more localized and less exportable. Thus, concerns about "brain drains," the proportion of foreign students studying in U.S. institutions of higher learning, or the likelihood that the U.S. will continue to lose its dominance in the development of new high-level ideas and know-how are overblown.

Instead, Bhidé concludes that the edge in economic development from the "innovation game" comes from the kind of entrepreneurial behavior that adapts and combines high-level ideas and know-how, adjusts them to the needs of particular markets, and actually sells them to willing buyers. Without these capabilities, high-level ideas, as was the case with the development of transistors, can take decades to develop.

Of course, the development of high-level ideas is critical to this process as well, but if it is less and less possible to hoard such ideas, where they are developed is of less importance than where mid-level and ground-level ideas and know-how are applied. The iPod, for example, was an example of purchased (largely non-U.S.) technological innovations combined with Apple design capability and knowledge of the U.S. market, where the vast majority have been sold.

If one agrees with these hypotheses, what does this mean for investments in basic science on the part of any government? Would some of that money be better deployed in supporting education in areas such as marketing and entrepreneurship that fosters entrepreneurial thinking and behaviors, providing credit to entrepreneurs and small businesses, and instituting tax policies that encourage the provision of venture capital? Or is the world really flat? Do the "techno-nationalists" have it right? What do you think?

To read more:

Amar Bhidé, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World (Princeton: Princeton University Press, 2008).

Thomas L. Friedman, The World is Flat: A Brief History of the Twenty-first Century (New York: Farrar, Straus and Giroux, 2006).

Comments

    • Sameer Kamat

    I haven't read the book yet, but the New York Times quotes another example from the same book. In the article, Bhide says, apart from Silicon Valley, America also owes its technological success to the role played by companies such as Walmart. If we agree with the premise that the application of technology is as important, if not more, as the underlying technology itself then where (geographically) the research happens does seem to become less relevant.

    Having said that, let me also share another instance of why the location where research happens gains relevance. Silicon Fen (also referred to as the Cambridge Cluster), on the outskirts of the University of Cambridge, isn't as big as its American cousin. However, according to an article (John Tilston, Feb 06, siliconfenbusiness.com), this area hosts between 1500 to 3500 high-tech firms (depending on which survey you believe in) and collectively contributes upwards of 4.5 billion to Britain's GDP and the top 20 of them listed on stock markets have a capitalization of over 6 billion. They employ somewhere between 35,000 and 50,000 people. The region consistently outperforms the growth of the UK economy as a whole. Cambridge cluster companies secured more than 25% of the UK's venture capital investments and more than 8% of the European total by value in the first half of 2004. Though this information is a little dated, I'm guessing the latest figures would extrapolate this trend.

    The point I'm trying to highlight is the self-prophesizing nature of the technology innovation process in and around the geographic source of innovation. I'm guessing Bhide isn't saying basic research isn't important, just that it may be overrated and getting more attention than it deserves. That argument definitely provides food for thought.

     
     
     
    • CJ Cullinane

    When I think of technology transfer I think of Xerox,s labs in California and a small, at that time, company called Apple. The 'mouse' was sitting there and not being utilized until an entrepreneur/Techie noticed it and put it to full use.

    Pure science is worthwhile in itself but when utilized for practicle use it is multiplied exponentially. While the innovation brings change it also brings competition and the dreaded 'Knock-off' or copy. So I believe the world is indeed "Flat" but also has the ability to 'curve' or even be porous when innovation (and money) is involved.

    Where should government invest money? I believe it should invest at the basic high school and college level in math and science. Small business should get tax breaks as well as technological innovators (entrepreneurial start-ups). Let Capitalism pick the technologies to build but government can supply the engineers and math wizards.

    Charlie

     
     
     
    • Umer Mumtaz

    Writing from Germany, Karl Marx warned the Western World of a spectre that was haunting capitalism and would ultimately pull it down - the increased consolidation and power resulting from ever greater control in the hands of fewer people, who he called capitalists. Perhaps one day Marx will be proven right. Meanwhile, the spectre now haunting the West has come from an entirely different direction - the East, and the South as well - in the form of the post-Berlin Wall globalisation identified by Thomas Friedman. Unprecedented success in mastering the economics of the managed economy, particularly in terms of production, management, and distribution, resulted in unprecedented prosperity, growth, and employment in the West during the postwar era.

    Although Thomas Friedman has compellingly captured a fundamental shift in the world, there is still considerable debate about this view of globalisation - namely, that the world will become increasingly flat. Some question whether the world is headed in the direction of greater globalisation, or, in Samuel Huntington's words, headed instead for a "clash of civilisations". Others in the anti-globalisation movement question whether the flattening world is good thing and call for it to be stopped. Rising concerns about global warming and other environmental problems could also affect the flattening of the world. It is clear, as Friedman acknowledges that the world is not completely flat. Some of these different opinions ensure that there will not only be healthy debate for many years to come, but also that a variety of forces could slow or even reverse the flattening of the world.

    The overconfidence of technocrats, however, regarding their technical expertise and their inclination toward large-scale technological projects seem to contradict their "grassroots consciousness" and the "common touch" derived during their earlier life experiences. As always, their worldviews and values are also subject to change. Political leaders need to adjust to new socioeconomic environs. This is even more essential in today's world, where other social forces, especially entrepreneurs and public intellectuals, have become increasingly influential.

    Most importantly the fourth generation of leaders is not a monolithic group of people with completely identical views and values. Intra-generational differences do exist in every generation, but they are particularly prevalent among the fourth generation of leaders. A balanced analysis of the fourth generation leadership should address both its collective characteristics and its intra-generational diversity.

     
     
     
    • Anonymous

    I think Thomas Friedman's book is very accurate. I work every day in the Information Technology industry. Consulting companies are reaching out abroad to do the development work as it is cheaper and quicker on some accounts. This trend will only increase as more companies become more comfortable with the security and intellectual property issues that can arise with outsourcing offshore. Please do not be misled by this article. All of our children are being challenged in this new economy. You can easily order more products from around the world than you could just 10 years ago. This means some business in the US is missing that sale. This trend will only grow. I hope you are teaching your children how to compete globally. If not, they will find it out the hard way.

     
     
     
    • John Arnott
    • CEO, Venturelab Incorporated

    Jim, Certainly in the west we have a strongly biased view towards technology and its importance to our society both in terms of intellectual rigour and economic contribution. Both authors have valid points of view but neither addresses one of the paradoxes of the real business world. Research I did for the government of Canada showed that only 6% of new businesses use a new technology; another 6% use some technology, fully 88% of new businesses use no technology (OECD). The average lifespan of a company is <10 years. Companies like GE that have existed for a century are truly the exception. Of course these numbers are skewed by mom & pops and of course many more that do not incorporate.

    The scientific and engineering comunities have a vested interest in sustaining promotion but I think Bhide is closer to the mark. Entrepreneurship is the motor that gets technology to market.

     
     
     
    • Walter Blass
    • Professor of Management, Grenoble Graduate School of Business

    I've been teaching MBA students for the past 8 years, with 90% of the students from 50 nationalities in the parent school in Grenoble, and others in Singapore, Shanghai, Belgarde, Moscow, Isfahan, etc. What I have observed is that once you get below the "veneer" of McDonald's, smartcards, laptops, and so forth, there are huge differences in Marketing, Finance, Management, and yes, even Innovation. One of my students is doing a thesis on why India has been so aggressive and successful in software and not in hardware; another student looked at whether the concepts of strategic management could be applied to the French Government under Pres. Sarkozy. Some years ago, one sought to explain the success of a Westerner, Carlos Ghosn, in turning NISSAN around. Not everything revolves around innovation--a lot more has to do with how it is developed, produced, marketed, adapted to local customs. Even examination instructions are interpreted differently in different cultures. If we are to be useful to our students, we need to be sensitive to these 'under-the-veneer' differences. Quoting a phrase from Charles Kindelberger some 50 years ago, we need to see trends that appear to be completely opposite, and recognize that both can be true. So it's not that Tom Friedman is wrong, but that he is only partially right. Likewise, Paul Tillich once said that recognition of ambiguity is the mark of a truly mature person.

     
     
     
    • William Halveson
    • Project Manager, John Muir Health

    Bhide's findings were predictable. But is he arguing that government should not fund the high level idea creation because they escape too easily? Since GE and IBM got out of the basic research business, who else will fund it? I know of several LLNL lab results working their way through the start up process now. CRADA agreements can limit how fast the high level discoveries escape.

    Funding the other things mentioned ... is akin to choosing which banks should get bailed out. Bureaucrats choosing which ideas and firms to back is ... well ... somewhat counter to the whole idea of risk/reward balancing, no? Why extend moral hazard from banking to innovation? Shouldn't we expect similar results?

    As for the brain drain debate, it is clear America and Europe have benefited from it. Certainly we can't fill the need "technology" has for trained/talented people - or primary care physicians, either. Some argue we need to spend more money for education, which would make it a policy choice.

    But what if it is a limitation of our species? That's the politically incorrect question that really needs asking: what if our technology is (on a global basis) unsupportable because it requires more talented/trained people than our species can produce? There aren't enough 7' tall people for the NBA, why should it be different for bioengineering?

     
     
     
    • Bruce Bockmann

    It is the confluence of technology, capital and entreprenuerial management skills that results in successful commercialization of technologies. Technology Clusters are the most efficient way to create that confluence. Silicon Valley and Route 128 did not spring up by accident. They are the result of a natural migration of the required skills to a place where access to technology, capital and entrepreneurial management is easy, or at least easier than at places where only one or two of those three factors are available.

    The factor that is the most difficult and expensive to produce is technology - certainly consistently produced great quantities of technology. A great university or government or private research center is required to produce volumes of technology and cause capital and entrepreneurial management skills to locate nearby. I think that it is the responsibility of government to support technology in its own country. If government does that, the capital and entrepreneurs will follow. If it does not, capital formation and entrepreneurial management will be hit or miss.

    Government funding should go to universities and to corporations but it should not be spread politically the way it is today. If you check to see where goverment technology funding goes, you will find out it is spread geographically. What we really need is to focus our funding on maybe a dozen key centers where technology can flourish and capital and entrepreneurial managment will locate. China has done that and that is why they are catching up.

    My view is that government funding is vital but it needs to be more efficiently deployed, recognizing that clusters attract the other factors that are key to successful commercialization. To bend the world, as many other governments are trying to do, we need keep trying to lead in technology development and we need to have a strong technology development program within the country. Geography counts because capital and management seek efficiency and being close to the technology is efficient.

     
     
     
    • Gerald Nanninga
    • VP, Retail Ventures

    When I was getting my MBA, one student said, "There are two types of people in the world--creative people and the people who exploit creative people for a profit--and I intend to be one of the latter."

    It really doesn't matter whether the world is flat or not. Most value is added by the exploiters, not the creators, and that works in both environments. If the world is flat, you can easily get an idea from anywhere and exploit it for profit. You just need to be a little faster.

    If the world is not flat, then that just means that exploitation needs to be customized more for each market.

    So if you believe that the role of government is to create jobs and strengthen the economy (which in itself is a debatable issue), then an emphasis on exploitation would appear to be the way to go. Isn't this basically what the Japanese government did back in the heydays of the 1970s and 1980s?

     
     
     
    • Jack Savidge
    • Chairman, The Proof of Concept Institute

    Friedman and Bihde writings center on innovation, its ease of travel and origin. U.S. technology prowess relies on rapid movement of innovation to feasibility to development to market. We do this part better than most. So, I have no argument about the genesis of an innovation, but I am concerned that the global wellsprings of truly value producing innovation will begin to extinguish without concern for the most vital innovation-to-market phase. That is, the causing proof of concept (PoC).

    PoC occurs must span applied research across the feasibility bridge to the product/service Development phase. In the PoC environment novel ideas are crafted into realistic innovations. Then six months to one year are spent shaping, testing and guiding an innovation based project to understandabilty of its higher performance/value and cursory market validation. Very few words by innovation processes observers have been written about this crutial weigh-stop to commercialism.

    Here is a short PoC FAQ: 1. Investment to move innovations to feasibility are not available from the venture capitalists - too early stage, too risky. 2. Universities dislike commercial activity on campus; and, are reluctant to use operating or research money for PoC operations and grants to faculty. 3. Corporations percieve PoC's as disrupting of their culture; and, have chosen outside investments to satisfy growth; meanwhile, the perhaps brilliant ideas within internal engineers/scientists remain in their notebooks. 4. The value of PoC work is not more fundable commercial potential, but projects of higher quality and swiftness to market. An additional benefit is catalyizing greater numbers of ideas from researchers where a PoC is operating - not an incubator as that comes later. 5. Over the last 30 years many PoC initiatives began with hope of a new venture ROI that could provide self-sustainability. Observation and history conclude that only a philanthropic attitude and funding will sustain PoC efforts. 6. Once the scoured innovations of the PoC process reach the Development stage, the venture capitalist may invest in perhaps 5-10% of the offerings.

    Focusing on the need to mobilize proof of concept intitiatives is a national imperative best supported by government and philanthropy. No matter where the innovations orginate, America must seize an innovation to increase its value and more quicly than competitors ready it for development and deliver its higher performance to users. This surely will ignite more novel ideas.

     
     
     
    • Anonymous

    I read a more than a few pages of The World Is Flat. Couldn't complete it mainly because of Friedman's breathless gushing and relentless jargonizing (sorry, aftereffects ;-))

    But when I walk the streets of Bombay and find Chinese batteries selling for one third the usual price, eagerly bought by a slum-dweller to power a Chinese toy cheaply purchased in a big store, I think Friedman has a point or twenty.

    The globalization of banking and the acceptance/exploitation of capitalism's advantages by even non-democratic societies in Asia has certainly contributed to this flattening.

    On the other hand, we need sane dissenting views such as Bhide's to counter those of the alarmists and protectionists. I believe the entrepreneurial spirit and the innovation-fostering environment of America will continue to be a significant competitive advantage for its citizens. Innovation, in its essence, thrives in diversity and with sourcing of ideas (and things) from wherever-it-makes-sense.

    Hasn't the USA created and benefited from computers and the Internet, the same technologies that have enabled third-world countries to compete globally? The cultural constraint faced by budding business giants of Asian and even European countries is underestimated.

    It is a narrow and limited perspective that suggests that if China and Malaysia become the manufacturing hub for the world and India rises as a global backoffice, there would be no jobs or economic growth in the USA.

    A lot of change is in the offing but the entire ground is not necessarily covered by Bhide or Friedman.

     
     
     
    • Anonymous

    Any country is strong, mainly for cultural background, in several types of applications. Italy, for example, is a leader in packaging, ceramics, and other products. Everybody in the world needs the final feedback of "ground level" customers to set up new and improved "high level" know-how. That's like a circle.

     
     
     
    • Kamal Gupta
    • CEO, Delta Petro Additives (P) Ltd

    Scientific research and technological innovations create new products, but the top line and bottom line come from entrepreneural innovations.

    Until somebody came up with the idea of hire-purchase, tractors were an unsaleable product, the American farmer simply could not afford to buy it.

    Credit cards expanded the consumer markets manifold; so did the home mortgage system. In India, homes were a dream for most middle income families; by the time they had saved enough to buy one, prices would go up 2x. Since the time home loans were introduced in the country sometime in mid-90s, home ownership would have shot up 20 times, maybe more.

    The near demise of music labels, and the rise of downloaded music, is another glaring example of entrepreneural innovation.

    Bangladesh's pioneering work in microfinance is an example of locally-tailored innovation, so is Mother Dairy (India's) pioneering innovation in milk collection and dairy processing, which transformed India from an acute milk shortage market to the world's largest milk producer in one generation.

    ITC Ltd's (another Indian company) work on e-choupals, a bazaar concept where villagers buy their home and farm needs, and sell their produce, is another eample. ITC lets village folk track prices in various markets over the internet, and get the best prices for their crops.

    None of these did basic scientific research or developed technology. The tractor was developed by somebody else, it was the hire-purchase guy who made it a marketable product.

    The Japanese did something similar for manufacturing - their techniques of just-in-time and single-minute-exchange of-dies revolutionised manufacturing without using much technology.

    My view is that governments should fund education in maths and science, right up to the doctorate level. Markets will take care of entrepreneurial innovation.

     
     
     
    • Hujaj Ali Nawaz Khan
    • General Manager, TAFANI General Contracting L.L.c

    The world is oval !!

    Naturally, man thinks and rethinks the way it is. More often, the perception of the entrepreneur plays a vital role in the understanding and explanation of theory through their actions regarding innovative studies and developemnt. If enterpreneurs find it easy and intresting with beliefs in solid results, they will pursue the world in their own directions and no flat TOT/TOK (Transfer of technology/transfer of knowledge) exists. ... Now it really depends on: What is the product? Who is taking the ownership? How will it be positioned? Who will be the consumers? Especially what cycles exist at that particular point in time?

    Thanks!!

     
     
     
    • Narendar Singh
    • Professor, Vidya Business School

    In my last thirty yeras of experience in teaching and applying technology, I have observed:

    1. Ideas across national boundaries travel faster;

    2. The acceptance of ideas is slow in the older generation than the younger;

    3. Adapting ideas meets lots of resistance, but this also depends on many factors such as cultural and ethnic differences;

    4. At the grassroot level, maximum resistance is observed in accepting and implementing ideas.

     
     
     
    • Rudolf O. Rinze
    • Mng. Director, Combucasa, C. America

    I think that there are several factors to assess in this matter: entrepreneurship is teachable perhaps in its rudiments. But let`s be honest to accept that most of it is not taught, due to the wide assortment of abilities required either from individuals or teams, plus the particulars regarding place, market, situational motivations, etc. And yes, I do agree that this is a very complex issue and consequently, governments, educational/research institutions, as well as, say, industry and business galore, should strive for more coordinated cooperative efforts towards the structuring of robust supportive systems/environs for the nurture and reaping of creativity and innovation.

    The where and how for start-up sparks may become less important if one gets the whole picture, as inclusive of the often-coincidental factors of opportunity, timing, keen individual or institutional interests, plus the omnipresent and not to be forgotten serendipity factor.

     
     
     
    • Jay Somasundaram
    • Analyst

    Are we asking the right question? The innovation the world needs is not from technology. Technology has served us well, to the point that technological innovation is no longer the priority, merely a nice-to-have. The critical problems of this century are war, massive income disparity, non-sustainable use of resources, and discontent. What we need most is not innovation from the physical sciences (aka technology), but innovation from the social sciences.

    For example, improving school and university education results is a common theme in this discussion. Science, on the other hand, is clear that the most important learning period by far is infancy - science that we fail to exploit.

     
     
     
    • Akhil Mehta
    • Author, akhilmehta.blogspot.com

    My take on the debate is that technological advancement and innovations are global phenomena and no matter where an innovation occurs, it seamlessly gets commercialized and / or replicated (through reverse engineering) across the world. The local community where the innovation occurs might hold the patent and derive some economic value from that, but it can't stop either the benefits of that innovation getting passed on to the wider world community or somebody else improving on that innovation.

    However, entrepreneurship is still very much a localized effort, for the simple reason that it requires so many elements as part of its enabling environment including (but not limited to) access to venture / risk funding, strong legal and commercial environment, absence of bureaucratic red-tape. That is the reason why a US tech giant would get its research increasingly done in a Bangalore or a Taiwan, but would get it commercialized from California.

    So it will be naive to assume one way or the other whether the world is flat or not. For there are certain areas where it is flat and totally boundaryless, and then are other areas where severe impediments still exist towards assuming a flat structure.

     
     
     
    • D R Elliott
    • CEO, TEQ Development LLC

    Authors deciding whether the world is flat or not reminds of fleas on the elephant's back trying to describe the elephant. About all you can really say is that it's big and complicated. If you are going to use geometric metaphors to describe the dynamics of technology and global enterprise, let's at least pick something that reflects complexity like, say a Moebius strip or a Klein bottle. It depends where you are standing on the surface to explain what you perceive.

    The developed world wants new things that are more sophisticated. The developing world would just like things period. This is an important edge on which both technological innovation and entrepreneurship divides. Today the developed world is rethinking consumer based capitalism while the developing world is figuring out how to become consumers.

    In the developed world, public policy for the funding of science is most often managed by former scientists. Complicated problems are by their very nature more interesting to scientists. This is why health and medicine constitute the bulk of US federally funded R&D as opposed to, say, the science of nuts and bolts.

    Our business values technologies for their capital asset value. What we learn from this process is sometimes surprising. For example, that a left threaded lug nut that holds farm machinery together is actually more valuable than say, a new drug to treat male pattern baldness. But then again, that depends on whether looking good is more valuable than eating well. Whether or not the world is flat, I am optimistic that there are entrepreneurs aplenty to exploit both opportunities. What works best depends on where you are standing.

     
     
     
    • Deepak Alse
    • Project Manager, Wipro

    Bhide's research feeds into what we call the 'Value Configurations'. The value chain for high tech spans from basic research , proof of concept, mass productization, mass customization and then sublimation or evolution into next generation of ideas. The baseline resources are ' knowledge' & 'ideas' - However, the process of 'execution' is what decides who does what and where. Basic research investment is our long term insurance but we cannot just live for tomorrow - 80% of the world makes a living on doing things for today, by productizing and servicing needs. And how that is done or where that is done - That is decided by economics of efficiency , speed, agility and availability. The world may or may not be flat but definitely finds equilibrium - Today's excesses will seed tommorow's scarcities. That's what we keep learning repeatedly -Or maybe fail to learn!Basic research can travel - But clustering in productization phase of various elements is essential due to the 'execution' related complexities. For policy planners and leaders(in business, government or non-profits), the challenge is in identifying the equilibrium based on the current status of development in each part of the world. Identifying innovation in context of the social systems of a region often helps in productizing successfully.

     
     
     
    • Tom Dolembo
    • Owner, University Security Assoc.

    I am a security professional, HBS '71. I work with major research universities. Since 9/11 there has been a rising tension between the need to exclude "suspect nationals" and attracting the best talent to pursue ideas. The world may or not be flat, but many in power believe it is dangerous. Collaboration is integral to idea making, and the myth that anglo saxon led all-american corporations are better (and safer) than multinational teams is just that. Look at Harvard, Stanford, any institution or entity that is on the edge, and you will find many of the principal investigators are foreign nationals. Many more have been denied entry, and others have moved on to nations more willing to accept their talents. Unreasoning fear obscures our horizons.

    I would ask any emerging manager of a research mission if the best judge of security (and this is my job) is her researcher, not the politician or FBI/CIA clone garnering power. Until we can bring the best minds together, using every means and system without fear, the flat world will have rows of razor wire every ten feet. The US is not producing talent for its needs, and if we ever hope to renew our enormous potential we must address our fear. And we must find a means to welcome, not exclude.

     
     
     
    • Abbey Mutumba
    • Managing Director, Abbedax Entertainment and Hospitality Ltd

    Tecno-Nationalists are important for continuous innovation especially in this global economic crisis. However, without developing countries like Uganda--my country--enabling high level ideas and know-how to be adapted by mid-level and low-level innovators in their countries, we shall not benefit from adaptable, flexible, and profitable innovations like franchising (more of a USA innovation of the 60s) as a strategic choice for less costly business expansion.

    With MUBS (Makerere University Business School) fellow lecturers/researchers, we are trying to adapt and convince entrepreneurs in Uganda/East Africa into preferring franchising to other business growth and social improvement strategies. We are currently working on a research paper entitled 'Football Branding, Franchise System Development, and Creation of Franchiseable Football Brands'. We want football clubs in Uganda, Kenya, Rwanda, and the entire region to become franchises that will attract more investors, paying supporters, corporate sponsors, and FDI. 'Health Franchising and Access to Quality Healthcare Services' is another innovative research that we are trying to adopt into our East African/Great Lakes Region region. Both adaptive initiatives and high-level innovation from the developed world will be maximized in our developing countries. But remember, i came to learn more and creatively thought about marketing 'business format franchising' into Uganda through the internet, which is in line with the benefits of 'Innovation Explosion' where the original/high-level innovators in the developed world and the mid and ground-level adaptors in Uganda benefit.

    Indeed the country where the applied research is done or the high-level innovation was conducted is less important than my country--Uganda--where that innovation is modified and maximally utilized. It is a win-win scenario with mutual benefits. Most innovations now take place at the users' end while the originators of the winning innovation are usually paid royalties through technology transfer catalysed by increased internet access. Uganda should facilitate adapters to exploit the high-level innovations that entrepreneurial researchers like me are fine-tuning for our country's economic development.

     
     
     
    • Anonymous

    Joseph Stiglitz (Nobel winner for economics and former Chief Economist at World Bank) said while on a trip to India that 600 million people from India (out of the one billion!) have been left out of the "development" fold of globalization. So, obviously, all India is not going to migrate into the middle class. If anything, the inequality is far, far worse now after the advent of globalization. There is no "flattening" within the country, why talk of "flattening" between continents. And South America and Africa don't find any menion in Friedman's book of course!

    Similarly newspaper reports have pointed out how Chinese workers are working in appalling conditions to churn out the low cost products, with poor pay, cramped rooms, no accident or health insurance benefits, no job security, no overtime, long working hours - so who is actually benefiting from this sort of globalization? Corporates of course!

    Two books to read that offer a counterperspective to Friedman's "The World is Flat":

    The [former] Harvard professor Pankaj Ghemawat's latest book, "Redefining Global Strategy," is more academically inclined. His argument being that Cultural, Administrative, Geographic and Economic aspects of a nation come in the way of total globalization from taking place and cites examples of the same.

    The other, a small, but interesting book, is by Aronica and Ramdoo: "The World is Flat? A Critical Analysis of Thomas Friedman's New York Times Bestseller."

    Interestingly enough, the book was written about two years back and discusses prescriptions for the future and other related issues in the chapters "Debt and Financialization of America," "America"s Former Middle Class," and "A Paradigm Shift for America."

     
     
     
    • Carl Allen
    • Chair, Local Compact Voice

    Have not read the book.

    Some understated observations not forthcoming in arguments on a "Flat World". The observations temper any conclusions, implications, inferences etc made. The observation are physical but apply the the conceptual flat world.

    a) Even if the world were flat, we would still have to account for mountains and valleys i.e. the height from which the observation is made affects the conclusion etc. So the conclusion is made in real time but is it complete enough to be strategic?

    Beta or VHS anyone?

    b) In both the flat world and the round world, real and conceptual, events of significance occur and change a conclusion or trend overnight and/or for varying periods of time e.g. an earthquake and a better copy will rapidly change what exists or is planned.

    But who can predict the earthquake and the copy inventor who take the idea but markets a competing product or need?

    How may of us really need to walk around with music in our ears? But better than music blasting out for all to hear!

    c) It was never about flat and round! It was always about isolation versus ease of entry and exit since the size of the earth was not changing but population kept increasing.

    That native north American Indian was right when he said that the white man had no concept of technological sustainability being about resource sustainability.

    d) In a flat world, it may be impossible to stop the fast spread of good or bad and the consequences may have to be played out, except in the mountains.

    In a round world, where there is isolation, it may be impossible to prevent the arrival of the bad and the good. But those who escape to tell the story have a hard time telling tales of the fantastic in untouched worlds.

     
     
     
    • Jack Slagle
    • Sr. Mgr., L-3 Communications

    Having lived and worked all over the world I would have to agree with both authors' writings. However, I would tell Mr. Friedman that the world is only flat in certain "places" (industries) while telling Mr. Bhide that he is correct that small, entrepreneural organizations are the seed corn from which most true "breakthrough" technology grows. I see this daily in the defense industry.

     
     
     
    • Adnan Younis Lodhi
    • Section Officer, Ministry of Commerce, Pakistan

    I tend to agree with Thomas L Friedman in this debate. There is no doubt in my mind that world has grown flat or with some concession growing flat by the day.

    It is apparent that investments done by one particular government in basic science is going to provide a free ride to other governments and organizations as we have seen the pace of dissemination of useful knowledge has grown in recent decades. Holding a productive product or technology for a longer term is a great challenge today particular with the lax piracy standards in the developing countries.

    With the virtual mobility of global labor insured, only those companies and nations will grow quick that will make the best use of entrepreneurial qualities of its populace.

     
     
     
    • Santhanam Krishnan

    The commercialism that envelopes the modern world (read corporates!) does not care really the concerns expressed by Bhide so long as their cash registers are kept ringing! As one looks around, it is fairly evident that the ultimate aim of corporates is to make fast bucks ahead of competition.

    Thus the buck making corporates become the cash cows that contribute to the tax revenues of Governments that deploy them in education in areas such as marketing and entrepreneurship that fosters entrepreneurial thinking and behaviors, providing credit to entrepreneurs and small businesses, and instituting tax policies that encourage the provision of venture capital. This is the route many developing countries have taken to be in the game of growth and position themselves as an attraction for investment by entrepreneurs!

    To answer the question viz. whether the world is flat or otherwise - my answer would be - the world is flatly circular! This is the reality circle!

     
     
     
    • Jim Peers
    • retired, MBA '51 HBS

    Your conversations and quotes by Bhide, plus ideas of others inspired me and provided some of the fodder to send Canada's infrastructure prone politicians the following note:

    Dropping further behind the new ideas and taillights of China, India and 20 other nations - is not an option for Canadian youth!

    Future generations can't wait any longer, for their parents, teachers, employers and politicians to match the overwhelming global pace for adapting to new ideas, higher technologies, plus math and sciences at the level foreign students do in their schools.

    The highest priority for all governments is to cut their own spending without layoffs, by consolidating the work and eliminating the position of all employees as they retire in each of the next 5 years. Bureaucrats have had the software and computers to do so for 30 years, but have never seen fit to give Canadians the information technology dividends we have been owed.

    Therefore, to generate the highest possible revenues quickly, the feds and provinces can cut corporate tax rates to 0% for 3 - 5 years, plus provide 10 year tax holidays for entrepreneurs that start new businesses and for early investors that fund them. This will have a much faster impact on all communities than any infrastructure project.

    Also, the higher level knowledge and skills now locked up in government jobs, can be freed up for work in the private and not-for-profit sectors - when all new government hires are for 20 years with a fully vested pension paid on retirement. Providing current employees with a fully vested 20 year pension, might be a good idea, for the same reasons.

    But, ordinary Canadians have a key role to play in the recovery of our economy - by nominating, campaigning for and electing higher-level politicians who have the financial independence, knowledge, experience and drive to initiate and champion changes like those suggested above.

    Moreover, rather than merely sell access to government honey pots like highly politicized infrastructure programs, that restrict innovation - newly elected politicians are more likely to foster private sector growth by adopting new ideas that change the status quo mentality of governments.

    Also, thousands of practical bottom up ideas will be nourished and implemented by better access to global levels of math and sciences and new technologies on the internet, when all parts of Canada have access to the high speed www. Therefore, most infrastructure spending approved initially should be directed to projects with a fast track pay back in rural Canada, where 15% of Canadians work, but produce 80% of Canada's natural resource wealth.

    Cities that mistake maniacal, huge open-ended infrastructure spending for genuine economic achievement, often had billions in overruns. Therefore, major urban projects must be put on hold, until private sector financing is more readily available.

    Jim Peers,
    B Com McGill; MBA HBS '51;
    Sydney, Nova Scotia, Canada

     
     
     
    • Alex Evans
    • President & COO, ETG

    I see first hand, leading a latter-day multinational conglomerate, that the flattening process, while occurring, is highly uneven in its pace, extent and effects. Some trade in goods globalizes more readily than other trade (even when adjusting for governmental policies about trade); some services go "flat" while many others remain highly local. "Flatness" and information-intensity of a business or activity appear correlated, but not to the extent that other factors may be ignored. As with most industry-structural evolutions like "flattening", by the time they become the topics of best-sellers the trends have become fixtures in bellwether sectors (e.g., US I/T outsourcing to India), and have become navigational beacons for follower sectors, but how the changes will play out is still largely up for grabs. I agree that the play-out will depend in part on a sector's (or country's) ability to implement breakthrough ideas in a sustainable way, and that in turn will depend on having an environment, defined broadly, and culture that facilitate both identification (if not also generation) and implementation of high-potential ideas.

     
     
     
    • Sujeet Prabhu
    • Manager, Larsen & Toubro Limited

    I tend to agree with one part of Mr. Bhide's conclusions that the edge in the innovation game comes from entrepreneurial behavior and the ability to develop products from know-how and sell them to buyers.

    However, I believe that the world has become flat as it is not possible for any country to do the range of activities that are required to succeed in the Innovation Game. Each country is at a different level of development and has different competencies.

    The developed world has the infrastructure inplace for high level research and know - how, but needs to depend on the skills of countries in South East Asia and China to develop them into high level products at low costs. Countries like India provide the IT backbone.

    While investments in developing entrepreneurs are required to be made by all countries, a country should also focus on investing in the relevant area in the three - by - three matrix where it is most competitive.

    I feel future winners of the innovation games will be part of globally networked organizations where entrepreneurship exists throughout the organization, with each part providing the know-how, product or service in which it is most competitive.

     
     
     
    • Sunil Varughese
    • Director, Brand Indigo LLC, Dubai

    The world is flat--as far as one's imagination or creativity stretches. Thomas Friedman spurred a debate that "globalization" has flattened the world in more ways than one. Yet, as Obama noted in his inaugural address, while the USA remains the most prosperous, powerful nation on Earth--the ground has shifted beneath.

    An iPod, while it remains a brilliant, non-linear innovation, is just one more "wow" product for the over-served, over-pampered market segment that is at the top of the market pyramid. The market segment at the top of the pyramid has been living in a flat world for a while--the recent global economic crisis has underscored the same, albeit in a negative way.

    Yet, the need of the hour is how the most creative, brilliant minds across industry sectors strive to use their talents and skills in a positively non-linear manner whereby the under-served across the continents can also enjoy the joy of owning and using a stripped-down version of an iPod, laptop, or mobile phone. To quote Obama once again--a nation (read: the world) cannot prosper long when it favors only the prosperous (read: top of the pyramid).

     
     
     
    • Anonymous

    In the boardrooms of organizations, efforts are being made to universalize innovation and hence efforts to flatten this world seem to emanate from there. However, how can the same world be flat if the users of these boardroom concepts are finding these technological advancements too complicated?

    When are the questions of technological acceptability, applicability, and ease of technological transfer addressed?

    The world being flat must be driven by the assumption that technological innovations score highly in the above-mentioned factors.

    I happen to be living in an African country where these technologies are used suspiciously and are reserved for those in a given age group! How then can the world be flat if a people who are living in the same times and same town face two conflicting viewpoints on technology and its usage? Our elders use technology as migrants would do in a technology-driven country, while we the youth use these technologies as the citizens of a technological world.

    Notice that these technologies may be either high end or low end. It does not matter to the migrant. All is technology.

     
     
     
    • Kumara Uluwatta
    • Senior Lecturer in Management Accountancy, Wayamba University of Sri Lanka

    I have not read the book. But, after putting my attention to the story explained by you, I wanted to extract the following part from my paper.

    "While technology is often referred to as providing 'competitive edge' it delivers nothing until it is used by somebody (Pettigrew and Whipp, 1993). Therefore technological change has to be seen in terms of a process beginning with the idea itself and, later, adoption amongst an extended set of users. The process does not end there. Once an idea is in the hands of users they, in turn, may initiate modification and adaptation of the idea and regenerate the innovation process (Von Hippel, 1977). Indeed, idea providers (manufacturers) have been known to search out and gain the cooperation of 'active users' to help to improve the stream of new products (R. Rothwell, 1990s.1992). To make possible and maintain an innovation process involves, inter aria, the interaction and collaboration of different sets of individuals: idea originators, technological developers, gatekeepers to link the activity to its environment, top management 'eye on' to smooth the progress of the innovation when it does not conform to the current norms of organizational satisfactoriness, and so on."

    Further, I would like to put all your attention to Buddhist philoshopy. It explains everything about the world very clearly.

     
     
     
    • Anonymous

    I would suggest that anyone interested in this topic read "The World is Curved: Hidden Dangers to a Global Economy" by David M. Smick. This book is a follow-on to "The World is Flat" and includes an excellent analysis of the global economic problems we face today.

     
     
     
    • Rudy Vetter

    Not knowing the full content of Bhide's book, but understanding Friedman's thinking behind his books, I believe Bhide underestimates the dynamics behind the flattening of the world. It is not a static kind of state, it is an ongoing process. Friedman is pointing out very well where we come from and interprets the indicators well in a way that they move forward in flattening the world. In some industries this will be faster or has happened already in others it will take more time. No question this process is going on...

    To understand this process in its whole dimension, one may move focus away from an industry and supply perspective towards a consumer/user and demand perspective. The full socio-cultural development especially in Asia and parts of Eastern Europe includes an equalization of consumer insights and needs. With growing wealth and availability of information and goods consumers discover needs they never had before, in many ways these are exactly the needs that do exist in the Western world already. The process of transfer and adaptation just gets faster with every year and thus results in a flattening of attitudes, needs and choice.

    No way to get around this and the earlier Western corporations understand this the better they are prepared to understand this challenge as a gigantic opportunity.

     
     
     
    • Paul T. Jackson
    • Owner/consultant, Trescott Research

    I've just read through most of the comments. Again I am very impressed with the range of thought...whether any of it concludes anything useful is perhaps the question.

    A. This forum has already beat the "business world is flat" to death. And it is perhaps the wrong question anyway.

    B. Perspectives on Technology and where new innovations and new processes are developed, that eventually develop new products, are indeed interesting, but take up my time and are not necessarily useful in developing information that might be useful to me...well, to anyone.

    C. As someone above suggested, we spend far too much time about products and entrepreneurship; asking the wrong questions, when a lot of what we find in the Skymall catalog is frill; unnecessary to the human condition, no matter how neat, how innovative, how cheap or how useful it might be, unless, of course one has money to throw at frivolous things.

    D. The current financial crisis should be a lesson to us that there is a lot of product on the market that is not necessary to life, or the pursuit of happiness...no matter what the technology or the innovation or the marketing prowess of individuals or corporations might be. For all the years we've had windows from Microsoft, have we developed a better way to keep books? No, we just automate them. Now we can keep two sets more easily.

    E. What matters is what the innovation and new technology can achieve that will make this world better...not how to make oneself or company richer, or make more product to make life easier for those who already have all the toys they know how to operate. And it won't matter where or how we get that innovation, or who owns it, as it will, as said, make the world better...perhaps altruistically.

    F. Finally. Yes, we need better schools...teaching better. How to do that is / would be a better subject of inquiry, and perhaps a technological breakthrough. And funding education by the government sounds great, but not if it's done the same way...nor without buy-in by parents taking responsibility for students unruliness. Otherwise the results won't be any different than back in the 70s, when Iaccoca announced we had already lost a generation of kids; quite possibly the ones we have now running our companies into the ground...and getting paid excessively for doing so.

     
     
     
    • Anonymous

    Having taught Communications Studies in the last 15 years at universities, and having read both texts, my comment follows.

    We are living on the cusp of the industrial society and the the emerging knowledge society. The main difference between the two lies in the difference in the tools of communication which lie at the very basis of human activities. For example, today in commerce, government, banking and learning, we use the Internet, rather than national based transport and postal technology of the industrial society. The Internet as a democratic tool allows the transfer of information (read new ideas, applications, innovation, entreprenurial activities etc) to any nook and corner of the world instantly. The concept of 'flat' 'round' or 'oval' is abstract, and applied to the Internet-affords everyone (who has access of course) 'glimpses of heaven, and visions of hell'. At the same time, the Internet which enables globalisation (another abstract concept) provides a platform for McBride's "One World, Many Voices" including the marginalised. By definition therefore, we see ideological, cultural, political and social clashes which need to be managed as communication phenomena in order to inspire trust and assurance from the sender to receiver of the message, and include appropriate response to the feedback.

    In the final analysis, relationships whether face to face or mediated are essentially complex communication activities that must be skilfully managed if we are to avoid the social upheavals we are witnessing today.

     
     
     
    • David Matta
    • CEO & President

    I quote:

    Nobel Prize winning economist Joseph Stiglitz has been critical of Friedman's book. In "Making Globalization Work", Stiglitz writes:

    "Friedman is right that there have been dramatic changes in the global economy, in the global landscape; in some directions, the world is much flatter than it has ever been, with those in various parts of the world being more connected than they have ever been, but the world is not flat [...] Not only is the world not flat: in many ways it has been getting less flat."

     
     
     
    • Xuefei Peng
    • Heavy Reading

    In today's rapidly changing business environment, with advanced communication technology and convenient transportation across the globe, the interaction among different regions of the world is undergoing at an unprecedented speed. In China, many entrepreneurs are "copying" US entrepreneurial ideas to start businesses. On the other hand, even France Telecom set up a R&D Lab in Beijing to introduce innovative ideas and telecom applications from China to Europe.

    I consider what behind these copying behaviors as great disequilibrium between China and developed countries. Baidu.com after Google.com, the coffee shop chains copying Starbucks, automobile services companies learned from US, tremendous entrepreneurial opportunities lie in the disequilibrium. However, not every such case turns to be a successful venture. For example, though friends-making websites such as Facebook.com in US are very successful, similar companies in China are suffering extremely.

    I would say if you look at the big picture, globalization makes the world more homogeneous; while if you look in more detail, globalization makes the world more heterogeneous too.

     
     
     
    • Shareef Abdul-Kareem
    • Manager, Professional Accounting Services

    I would say that the world is flat, round and curved. China and India may create entrepreneurs who may utilize the innovations of North America and Europe. They may both used materials from Africa and South America. There is nothing to fear, the USA and Europe continue to develop high levels of technology, whilst utilizing the production infrastructure of the other countries. Therefore it is necessary understand whether one will be positioned on the curve, on the flat or on the pinnacle.

    Governments should definitely create fiscal policies geared towards entrepreneurial activities, however this must be blended with an education which inspires thinking for oneself. This is the basis for further scientific (technological) developments. The education must be free of prejudices and, in the words of Karl Popper, it should help to discern truth and acquire knowledge.

     
     
     
    • Vtasal Vaishnav

    Far from being flat - the global economy is really facing tough time with embryonic inconsistency and apprehension across geographies. The topic of globalization may be well presented in the Friedman's World is Flat, but in reality it's extremely unbalanced.

    Many of the economies are passing through turbulence with the huge increases in fuel prices, lack of consistency in food and troublesome credit positions. If the world is really flat - why the world communities fear of Global Warming? Why the countries issue bigger currencies to sustain economies? Why chunks of people still have to reside roadside and face hunger?