Are we heading towards an unflat world?

In the recent past, I have heard this question cropping up at various forums. As a rejoinder to Thomas Friedman’s bestseller “The world is Flat”, people have suddenly started talking about the “unflat” world. The question certainly is relevant given some of the events across the world. Obama initiated tax measures favoring companies who retain jobs in US. We have also witnessed a backlash in Australia against the Indian students. Having observed these recent events my very simple and short answer to the “unflat” world query is NO. To substantiate my argument I would like to go back to the original premise of how the world became flat. As Thomas Friedman highlighted in his classic, the world became flat essentially due to following:

1. Technology
2. Tools, Skills, Processes
3. People (read BRICS) with emphasis on CHINDIA

And since the book was written there are many more flatteners like You Tube, Facebook, 3G, just to highlight a few. Now, for the world to unflatten, you really need to undo the above. For a moment, just give a thought to the above flatteners. Is it really possible to undo the above? No, not really. At the most what you can do is have some curbs like the H1B visa in USA, tighten the immigration rules, protect sensitive sectors like Defence, Banking, change regulations related to import/export. The economic crisis may lead to a slew of protectionist measures in the short-term. However, the longer it continues more counterproductive it will be for countries like USA.

Take for instance the recent happenings in Australia. The Indian students are being attacked as the common man in Australia feels the pinch of job losses. The students are being attacked by the people who are hit hardest - part timers who work at cafes, gas stations and other stores. The Indian students are competing directly with this class of Australian workforce and have thus become prime targets. And this reaction, though extreme, is natural. If I go back to the Maslow’s hierarchy, these people are unable to meet their physiological needs and hence the extreme reaction. Should the Australian govt. send back Indian (also students from other countries) students? Now that would be a real un-flattener. But, does it make economic sense.

Let’s take a look at the following data.


Around 100,000 Indian students went to Australia last year (more than USA). In the process, they added $12 billion to the Australian economy. Can Australia afford to let go this amount? The point is that there are countries (US, Australia, UK, Canada etc) that have become so flat that their survival is now dependent on being flat. They have gone way ahead to undo what has already happened. And this flat world is not necessarily bad for them.

What America and other developed nations need is a process of nation building. A lot of introspection and action is needed by the developed world to stay competitive in the new world order. The nation needs to move up the value chain. This means more investment in science and technology, energy conservation and alternate sources of energy. It also means continuous upgradation of skills, a revisit of the education system.

I also advocate adaptability as a core skill to acquire not only at a personal level, but also, for a nation. To exemplify, let’s look at India. Not so many years ago we were an agriculture dependent economy. The fear of monsoon was so huge that it would make or mar our fortunes. In a few years we have now become a service oriented economy (~60% of GDP) with agriculture contributing less than 20% of GDP. Twenty years ago hardly a few of us would have seen a computer. We have invested in education, technology, language skills and associated infrastructure to create an army of skilled engineers, technicians and call center professionals. Even in this deep economic crisis we are growing at around 5-6% (second only to China). Truly, India has arrived and how!

The developed world now needs the world to stay flat now, than ever before. The world economies are more connected than they ever were. In a globalized world, organizations cannot afford to work in an isolated environment. Organizations look forward to provide value to their customers by producing the right product, at right cost, at right location and selling the same to the right market at right price. A very simple example I would like to quote is of a mobile phone e.g. Nokia –perhaps a device without which our lives are unimaginable. If you look at the value chain of a mobile phone, the R&D could be done in Finland, Manufacturing in India, Sales & Marketing in respective markets across the globe and service wherever the phone is sold. Imagine doing this in an unflat world. This could mean Nokia doing all the activities of a value chain in a single country say Finland. Is this feasible?

The choice for America and other developed nations is clear; either you remain in a walled garden oblivious of what is happening around you or you move out and embrace the new world order with open arms.


Sameer Tikoo