The Drivers of Globalization: Friedmans Flatteners

The famous author and cheerleader for globalization, Thomas Friedman, in his book The World is Flat identified some key drivers of globalization. He called these factors the flatteners to denote the premise of the book that these factors were responsible for the flattening of the world.

In other words, globalization has ensured that all countries with minimum infrastructure and educated workforces have the same entry level meaning that there are no “walls” or barriers to trade and hence the world is flat.

These flatteners or drivers of globalization include:

• The rapid spread of IT and communications across the world,
• The massive investment in broadband technologies or enablers like fiber optic cables and undersea cables in the wake of the dotcom bubble and
• The adoption of English as the medium of instruction in many countries across the world

If we take the first driver of globalization, the integration of the global economy has mainly been due to the rapid spread of IT and communications that enabled countries like India and China to circumvent hitherto aspects that were holding them back.

In other words, the increasing interconnectedness was driven by real time communication between the West and the East which enabled these countries to reach out to wider markets and audiences in the Western countries. The classic example in this regard is India that has managed to tap into the booming market for IT and process outsourcing. As the next paragraph points out, China leveraged the spread of IT and communications technologies in a different manner.

Further, the fact that China became a manufacturing powerhouse is largely due to the fact that though the country is still lagging behind in English speaking populace, it has been able to leverage the shift in jobs from the West to the East.

The point here is that with IT, Communications and English spreading rapidly, India was able to leapfrog the Industrialization phase of Globalization whereas China drew strength from its youthful population as well as the tendency for business leaders in the West to look for ways and means of cutting costs.

The way in which western businesses invested in physical infrastructure to support the communications revolution during the dotcom bubble made the process of integration of the world economy easier.

The point here is that after the dotcom bubble burst, there was excess capacity in the broadband infrastructure which meant that communications costs came down drastically. This is also proved by the rapid spread of mobile technologies in Africa, India and China that attests to the trend described here.

Finally, since a major proportion of the world’s population was fluent in English, many of these countries could communicate with the West effectively as well as ensure that they understand the technical and financial aspects of the Western form of capitalism.

In the case of China, the managers and the upper levels of its industries and companies were conversant with the Western methods of doing business that helped its cause greatly.