The World is Flat

I do not know where to put this, so I will put it here on my RandomTopics2 blog, but link to it from FinanceProfessor.com's blog as well.

As promised back in May, I finally got around to ristening to the World is Flat by Thomas Friedman. Of course there are things I do not agree with (especially the gloom and doom political side in the second half of the book), but I would urge EVERYONE to read/risten to it. So far it is very good and it will definitely get you thinking.

The super short version of the book is that the because of various factors (technology, internet bubble, collapse of communism, etc), the competitive advantages of certain countries and firms are evaporating. (to put another way, the barriers to entry are collapsing)

While virtually nothing as of yet has shocked me, it is a book that will make you think. (In fact, it is so thought provoking that I have been using the NPR technique of mixing in music occasionally to allow my time to think while driving).

One of the really thought-provoking parts is about Open Source programming. Will it speed up or slow down progress? And to take it a step further, will it stop with programming? Or be everything? On one hand it could be the beginning of the end of big corporations, but on the other hand does it work? One answer is from Jim Herbsleb a Carnegie Mellon Professor who reports that open sourcing is not without its problems--namely it takes longer and may not be for the masses.

Open-source development models fall flat - Computerworld:

"Because work is done by the users, they're more likely to get the functionality right, so a major class of errors is eliminated,' he noted, adding that developers of commercial software are rarely users of the software, and the functionality is determined by project managers.

'Project managers tend to understand purchasing designs -- why companies buy software -- so they'll build a project that plays into those hands,' Herbsleb explained. This means that commercial software can be created without fully meeting user requirements. Because free and open-source software developers are its users, they create the functions they specifically need.

But one of the drawbacks to the open-source software development model is that mainstream users often get left behind because the really technical people create the software design functionality for themselves, not for the average user."

Moreover, some are questioning whether it even works now

That said, as a mental exercise, let's allow it to work. Then what? Of course, many have asked what will it mean to software companies. But what about other companies? Will the future allow open-source drug development?

But even in the absence of open-sourcing, few can argue that competitive advantages are being eroded and this will have major changes on the economic landscape for generations to come.

For instance, let's examine blogging. In many ways blogs level the playing field. Indeed, FinanceProfessor.com's blog attempts to do just that. It tries to make academic papers accessible to more people. Which is good right? Well, not if you are an academic journal publisher. So suppose blogging catches on. What becomes of journals?

This begs the question how can firms (or journals) compete in this type of environment? In theory it will lead to faster changes and constantly looking for ways to offer what is not being offered. The question that is unanswered is how this will be done and who the winners and losers will be. (For instance, should journals go online and allow advertising to cover costs and to make money?)

See, isn't it thought provoking? Get the book!

BTW: Here is an article by Friedman himself from FreeRepublic and here is his own website for the book.

Here is a link that offers a differing view (that is, the world is not flat)
LinuxWorld:

"Cultural differences among certain classes of businesspeople, technologists, academicians, and teen-agers have been rounded off, perhaps"

The NewsTribune offers an interesting insight:

"what I fear will happen to Friedman'’s flat world. A clever, contemporary Clare Boothe Luce could easily turn the argument around. The flat world is a threat, and the only way to keep out threats is to close our borders and close our minds."

Which would be a tragedy.