Flat World Fears

Nayan Chanda: We have in our studio Tom Friedman, the foreign affairscolumnist for The New York Times and author of The World Is Flat. Tom,welcome back.

Thomas L. Friedman: Great to be here, Nayan.

Chanda: Your book, The World Is Flat, came out over a year ago. Otherthan the fact that it has sold 1.5 million copies and it has been on The NewYork Times bestseller list for 45 weeks, what else has changed in the timewhen the book came out?

Friedman: Well, you know, one of the things I've enjoyed most, Nayan, is thatfirst of all, just thinking about, why did this book catch on, you know. Afterall, it's a book about globalization, somewhat technical in some cases. And I'vereally spent a lot of time asking myself, you know, what's going on here. As Isay, I'd like to think it's because of my mellifluous voice and beautiful browneyes, but I'm not that stupid, so... I know that I've caught a wave, Nayan, andso...

Chanda: What was that wave?

Friedman: What was that wave? And I guess that the best way I could summarizeit is that it's a wave of anxiety, it's a wave that basically I would describelike this: Our parents were sure that they were going to live better than theirparents, and they were just as sure that we, their children, were going to livebetter than them. Our generation is now coming to retirement worried that we maynot retire as well as our parents. And you know what, our kids may not live aswell as we do. And I think that anxiety, that anxiety that we are now beingtouched by people who have never touched us before, we're competing with peoplewho we've never competed with before, and, fortunately, we're collaborating withpeople we've never been able to collaborate with before. But for all thosereasons, there is a wave of anxiety out there, that there's a lot of thingschanging; a lot of traditional boundaries are being eliminated, competition ismuch more intense. And, gosh, I wonder if my kids are going to live as well asme.

Chanda: So the fear of the unknown, of what is ahead. Things are changing sofast.

Friedman: It's the fear of the unknown, Nayan, and I would say the known,because it's the fear of what people see as real competition now, coming fromcorners that they've never seen it before, coming in the white-collar realm, notjust the blue-collar realm where we've become used to it, and not knowing whereit stops. OK, the call-center operator, well that's not important, but myradiologist, you know, is now using outsourcing to have X-rays read somewhere.My accountant, you know, can now draw on someone in India to do accounting. Sonow so many more things now seem able to be digitized, automated or outsourced.Where that starts or stops is I think what has a lot of people concerned.

Chanda: Judging by the reaction you have got in Silicon Valley, you have beenalmost made into a prophet there. Now how do you see the US high tech companiesadjusting to this flat world?

Friedman: Now, you know, the good news is everything I learned about the flatworld, I learned from companies. I learned from CEO's, CIO's and CTO's, who weredoing it. Two things were happening. One thing is, they were doing it, but theyweren't talking about it. Because no one – who wanted to talk aboutoutsourcing?

Chanda: Right.

Friedman: And it's one of the kind of reasons that I walked into a vacuum onthis book, an intellectual vacuum, is that the people who are doing it, and boythey're doing it, they are doing it at the cutting edge, and thank goodnessbecause they're really driving American competitiveness and companies forward.But they didn't want to talk about it. Nobody wanted to talk about it. So one ofthe fortunate things that I was able to do was go in and get them to talk aboutit and then kind of put it all together. And that really relates to anotherpoint why I think the book caught on a little in Silicon Valley, each one wasdoing it, but in his or her realm, in their own dot. But no one was reallyconnecting the dots. And it always struck me Nayan, you know, when someone likeMichael Dell, invited me to come to Dell and talk about the book to hismanagement team. And my attitude was, "You talking to me? Is there someonebehind me? You talking to me? You want me to come and talk to you, no, no,no!" And I realized then, you know, from that experience that even thoughthey were in the middle of it, a lot of them, they actually hadn't gottenoutside. And therefore, when I, because I was just talking to all of them acrossthe spectrum, and kind of put it all together, they found that, actually, quiteuseful and informative. So, those two things really came together for me.

Chanda: The other group of people I think who have been very troubled by yourbook is the education circle in the United States, I've been hearing from peoplewho are extremely worried as to what this flat world means for you as aneducated system. What do you think is going to happen there?

Friedman: Well, you know, if I've gotten feedback from any group, any singlegroup, more than any other, it's from American educators, schoolsuperintendents, teachers and whatnot. All of whom, you know, sense that we'renot really staying at the cutting edge, that we're not getting this competition,and we're not strategizing enough about it. And it's actually quite exciting,there's an incredible amount of experimentation going on in education in Americatoday.

I'm actually an optimist. I'm actually much more optimistic today than whenyou and I talked about the book a year ago. Because I see the reaction not justto the book but to the moment that the book describes. It's not one oftriumphalism, not "We'll be OK, we'll all be fine." No, no, it's"Whoa, the sky is falling! Good, that's good." The sky actually isn'tfalling, you know, it's not that bad. But that's good, the reaction has beenimmediate, it's been energetic and it's been mobilized.

And so what I've seen in going out to schools is a tremendous amount ofexperimentation about what is the right approach to improve our math, sciencefundamentals, to get more young men and women into math and science. And so whatI've done, is I'm now updating the book, there'll be a new 2.0 version, there'llbe a new version of the book out in mid-April. It's just expanded and updated,basically. And I've focused a lot, in this book, this new version, on education,on what I call "the new middle."

We knew what the old middle-class jobs were. Well I would argue that in theflat world, with certain things being outsourced and digitized, we now reallyought to think about what are the new middle jobs, because there's, we need amiddle class. So what will be the jobs? What I really did last year, Nayan, wasgo around to American companies and say, "Who works here? Him over there,what does he do? She looks like she's got an interesting job, what's she upto?" And after enough of this, I basically distilled, down to eightcategories, what I called the categories of the new middle. And these aren'tspecific jobs, you know, widget operator here, you know. It's sort of broadcategories, and these will be the new categories of the new middle. I'll gothrough them very quickly for you.

One is great collaborators. When so many more things are going to be made inglobal supply chains, the ability to be a great collaborator, to be able to workcross-culturally and multinationally, there's going to be a huge number of jobsaround managing and coordinating these global supply chains.

Second are great leveragers, people who can leverage technology, so oneperson can do the job of twenty. Rather than competing with India or China,where twenty people might do the job of one, you make up for the labor cost byleveraging technology.

Third are great explainers. Boy, there's going to be a whole industry inexplaining. Because there's enormous complexity out there, so whether you're ateacher, a manager, a journalist, the ability to explain this complexity isgoing be in huge demand.

Fourth, I would call great localizers. Great localizers are people who canlocalize the global. What does that mean? They can take the power of this globalplatform and turn it into a local business. Now that's everything from the eBayentrepreneur, Mom and Pop who have now started a business on eBay, to the garageowner in New Haven, who goes online one day and says to his partner, "HeyBill, did you see this? We can get out hubcaps for half-price from Romania athalf the cost that it would take us to get them from Rochester." So they'releveraging the global platform, by localizing the global. There'll be a hugeindustry in that, Nayan.

Fifth, I'd say, are gonna be people who are great adapters. People who canstay one step ahead of the forces of digitization and automation. And that'sgoing to apply to a lot of people in a lot of industries.

Sixth would be what I would call people who are passionate personalizers. Ifyou can bring real passion and a personal touch to any vanilla task, there'sgoing to be a job for you in the flat world.

Seventh I would call anything green. Nayan, anything green, and there is ajob for you in the twenty-first century. Because green technology is going to bethe industry of the 21st century. So those are some of the categories that I'mlooking at.

Chanda: Now, I think the education part of what you mentioned is not only theUnited States. From what I gather, India, which is acclaimed as providing tensof thousands of engineers every year, is showing anxiety that its educationalsystem is falling behind. And recently you were in India. So what did you findabout India's education system?

Friedman: It was interesting, Nayan. I was at NASSCOM, the Indian high-techassociation's annual meeting, and full of some of the brainiest and mostinnovative people in India, but the buzz, the subterranean buzz that I foundthere was all about, "woe is me," basically. We're now doing a lot ofBPO, that's India' specialty, business process outsourcing. That's everythingfrom answering your phone, to writing your software, to running your back room,your human resources department. A good business, but India's gettingcompetition in that field now. Vietnam will come in there, Eastern Europe.They've got to move, they know, to KPO, knowledge process outsourcing, where youdon't just tell me – I don't just do the "how," I do the"what."

I actually conceive of the project, the idea, and then I execute andimplement it. To do that, though, you need a different type of mindset. You needa mindset that's questioning, that's innovative, that's synthesizing. And Indianeducation has been very good for pounding in those fundamentals. We know that,and nobody does it better. It's been great at getting people who know how to dothe "how." But it has not been great for creating people to know toask the "what." And – or the "why." And, of course, that'sthe strength of the United States. We need more people with good fundamentals,they need more people who are creative, and that's where you're getting thiskind of grand convergence. So I think you're going to see, over time, aloosening up of the rigid Indian education system, and introducing a lot more"what" and "why" into the classroom, because the talent isthere, we know. It's just really how you shape it and reshape it.

Chanda: To promote creativity.

Friedman: Exactly. To promote more synthesis and creativity.

Chanda: The flat world you have described, of course, is getting flatter bythe day. But at the same time, I see a couple of sort of new trends. One of themis, as we see in China, an attempt to raise cyber-walls, to still carve up theflat world in a way that goes against the grain. Now, the recent developmentinvolving Microsoft, Yahoo, Google, what is your take on that? Do you think thatChina is going to succeed in raising this cyber-wall?.

Friedman: I have kind of four reactions to the whole Google story, Nayan.First, shame on Google, shame on Microsoft, shame on Yahoo for not standing upmore for certain basic principles of human rights, number one. Number two, let’stake the high road. Let’s keep our eye on the prize. Yes, in China, you cannotGoogle search for Tiannaman Square or Fulang Gong. You can still search forThomas Jefferson, you can still search for Ben Franklin. Isn’t that what’sreally important? If 95 percent of my searches go through, isn’t that what’sreally important. My third reaction, on the other hand, is shame on China. Afterall, if I’m a Chinese graduate student in physics and I’m about to graduatefrom the University of Minnesota and I’m got a job offer from 3M and I’vegot a job offer at Wawei back at Shanghai. And I pick up the paper one day and Isee that I can’t search. You know what? I think I may, I’m thinking thatthis 3M offer is starting to look pretty good in Minnesota. And fourthly andlastly, I’m asking myself at the other end, is this the end of something orthe beginning of something? I think it’s the end of something. I think it’sthe last gasp of a security apparatus in China that it’s still relevant and incontrol of something. But to think that you’re going to control the searchesof 1.3 billion people, oh good luck. That is a fool’s errand.

Chanda: Well, in terms of moving bytes, you can see that maybe the cyberworld won’t succeed. But moving atoms, there seems to be, again, newobstacles. Recently, as you know, the French government has raised objections toan Indian-owned company obtaining the Frnch-owned steel company Acelor. And nowwe see the same thing in the United States because the Dubai port company isgoing to acquire six American ports. This, of course, goes against the grain offree markets, which most of the Western world supports So how do you square thiswith one hand, we uphold free market principals, and on the other hand, we arepicking and choosing which companies can buy in our country or not?

Friedman: I don’t square it, Nayan. I look at it with huge embarrassment. Iwant to think of it, really, as just a sky-zone to think that our country is apart of this. We believe in elections, we believe in free markets. I certainlydo. We’re not turning over our ports, security over to Dubai Port Authority.We’re turning over the port authority and six ports to people who will say,"Park here, park there." Collect the fees and what not and manage thetraffic of the port. But they’re not going to be inspecting, or notinspecting. They’re not going to be bringing their cousins from Dubai, youknow, to infiltrate container ships. I think it’s a shameful and has slightlyracist overtones to it. This is about keeping a bunch of Arabs out of ourcountry, that’s what this is really about. And it’s a bad thing not onlybecause it doesn’t reflect our real values, that’s bad enough. Think abouthow many services we run around the Arab world and companies. Americancompanies, Think about what an IBM or a FedEx or a UPS is running. What if theythen turn around and say, "You’re not going to take ours, well, we’re notgoing to take yours." We’re in a very dangerous tit for tat that could getgoing here. This is a really critical moment and we have to be really carefulabout this.

Chanda: So I also think that while the word has not be used yet, a subtext ofall this is that Arab-owned companies are about Muslims. That is the unspokensubtext.

Friedman: Absolutely.

Chanda: That I fear might have a real impact.

Friedman: It’s part of the dangerous backlash going on. Both sides areguilty of it. When people ransack a Danish embassy in Damascus and thegovernment allows it. You know, governments are there to restrain people’sworst impulses. We have nativists in our country. They have nativists in theircountry that are going to always want to push these issues. Government’s jobis to restrain that, and I think this is a real issue, a really shamefulepisode. I think the president’s right on this one, and I don’t agree withhim on this.

Chanda: And the other thing that is also becoming somewhat questionable isthe West’s commitment to democracy. We support democracy, but when thePalestinians elect Hamas, they say, "Ah, let’s think abut it." What do yousay to those who say that Hamas is a terrorist organization and should not besupported?

Friedman: I think that Hamas is a terrorist organization, but I also thinkthat it won a free and fair election and if it’s going to be ousted or it’sgoing to be de-legitimized, then I think that’s for the Palestinians todecide. And by the way, only if they do it, will it have the de-legitimizingeffects or the moderating effects. If we said to Hamas tomorrow, "Well, youdon’t get any money, unless you sing "Hatikva," the Israeli nationalanthem. The next day, they say, "Fine" and they start singing "Kol odbalevav p'nimah…" Fine, would you believe them? And then you say that "Youhave to sing ‘Hatikva’ in perfect Yiddish, standing on one leg and pullingyour ear. I still wouldn’t believe them. So why ask people do things that evenif they do them, you wouldn’t believe them. Why not ask them to do somethingthat is really hard and that you would believe. And that’s maintain aceasefire with Israel. Oh, that speaks to me so much more than any words. IfHamas is ready to do that, if they’re ready to allow the Palestinian Authorityto continue in a dialog, negotiations with Israel, that’s what’s reallyimportant. You know we have a saying in journalism, Nayan, as you know, "Neverbe smarter than the story. When the story is speaking to you, then shut up andlisten. Okay. Because all the stories I got wrong, I was talking when I shouldhave been listening. Well, this story is speaking to us. And so when the storyis speaking to you, just shut up. Okay, and let’s listen to the story. Let’slisten to Palestinians and let’s see if Hamas behaves when they have theburden of responsibility. And if their deeds are consonant with our interests,that’s what matters, not their words.

Chanda: And another broader implication of a Hamas victory is how this willbe played by regimes in the Middle East who are being pressed to democratize.Are they going to succeed in telling the West, "Look, this is what happens ifyou push for democracy?" So what should be the response?

Friedman: The response should be, that is what they will tell us.