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I'm exhausted just writing about all this. But it is hard to exaggerate how much this

tenth flattener-the steroids-is going to amplify and further empower all the other

forms of collaboration. These steroids should

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make open-source innovation that much more open, because they will enable more

individuals to collaborate with one another in more ways and from more places than

ever before. They will enhance outsourcing, because they will make it so much easier

for a single department of any company to collaborate with another company. They will

enhance supply-chaining, because headquarters will be able to be connected in real

time with every individual employee stocking the shelves, every individual package,

and every Chinese factory manufacturing the stuff inside them. They will enhance

insourcing-having a company like UPS come deep inside a retailer and manage its whole

supply chain, using drivers who can interact with its warehouses, and with every

customer, carrying his own PDA. And most obviously, they will enhance informing-the

ability to manage your own knowledge supply chain.

Sir John Rose, the chief executive of Rolls-Royce, gave me a wonderful example of

how wireless and other steroids are enhancing Rolls-Royce's ability to do work flow

and other new forms of collaboration with its customers. Let's say you are British

Airways and you are flying a Boeing 777 across the Atlantic. Somewhere over Greenland,

one of your Rolls-Royce engines gets hit with lightning. The passengers and pilots

might be worried, but there is no need. Rolls-Royce is on the case. That Rolls-Royce

engine is connected by transponder to a satellite and is beaming data about its

condition and performance, at all times, down into a computer in Rolls-Royce's

operations room. That is true of many Rolls-Royce airplane engines in operation.

Thanks to the artificial intelligence in the Rolls-Royce computer, based on complex

algorithms, it can track anomalies in its engines while in operation. The artificial

intelligence in the Rolls-Royce computer knows that this engine was probably hit by

lightning, and feeds out a report to a Rolls-Royce engineer.

"With the real-time data we receive via satellites, we can identify an 'event' and

our engineers can make remote diagnoses," said Rose. "Under normal circumstances,

after an engine gets hit by lightning you would have to land the plane, call in an

engineer, do a visual inspection, and make a decision about how much damage might

have been done and whether the plane has to be delayed in order to do a repair.

"But remember, these airlines do not have much turnaround time. If

this plane is delayed, you throw off the crews, you drop out of your position to fly

back home. It gets very costly. We can monitor and analyze engine performance

automatically in real time, with our engineers making decisions about exactly what

is needed by the time the plane has landed. And if we can determine by all the

information we have about the engine that no intervention or even inspection is needed,

the airplane can return on schedule, and that saves our customers time and money."

Engines talking to computers, talking to people, talking backto the engines, followed

by people talking to people-all done from anywhere to anywhere. That is what happens

when all the flatteners start to get tur-bocharged by all the steroids.

Can you hear me now?

::::: THREE

The Triple Convergence

What is the triple convergence? In order to explain what I mean, let me tell a personal

story and share one of my favorite television commercials.

The story took place in March 2004. I had made plans to fly from Baltimore to Hartford

on Southwest Airlines to visit my daughter Orly, who goes to school in New Haven,

Connecticut. Being a tech-sawy guy, I didn't bother with a paper ticket but ordered

an e-ticketthrough American Express. As anyone who flies regularly on Southwest knows,

the cheapo airline has no reserved seats. When you check in, your ticket says simply

A, B, or C, with the As boarding first, the Bs boarding second, and the Cs boarding

last. As veterans of Southwest also know, you do not want to be a C. If you are, you

will almost certainly end up in a middle seat with no space to put your carry-ons

in the overhead bin. If you want to sit in a window or aisle seat and be able to store

your stuff, you want to be an A. Since I was carrying some bags of clothing for my

daughter, I definitely wanted to be an A. So I got up early to make sure I got to

the Baltimore airport ninety-five minutes before my scheduled departure. I walked

up to the Southwest Airlines e-ticket machine, stuck in my credit card, and used the

touch screen to get my ticket-a thoroughly modern man, right? Well, out came the ticket

and it said B.

I was fuming. "How in the world could I be a B?" I said to myself, looking at my watch.

"There is no way that many people got here before me. This thing is rigged! This is

fixed! This is nothing more than a slot machine!"

I stomped off, went through security, bought a Cinnabon, and glumly sat at the back

of the B line, waiting to be herded on board so I could hunt for space in the overhead

bins. Forty minutes later, the flight was called. From the B line, I enviously watched

all the As file on board ahead of me, with a certain barely detectable air of

superiority. And then I saw it.

Many of the people in the A line didn't have normal e-tickets like mine. They were

just carrying what looked to me like crumpled pieces of white printer paper, but they

weren't blank. They had boarding passes and bar codes printed on them, as if the As

had downloaded their boarding passes off the Internet at home and printed them out

on their home printers. Which, I quickly learned, was exactly what they had done.

I didn't know it, but Southwest had recently announced that beginning at 12:01 a.m.

the night before a flight, you could download your ticket at home, print it out, and

then just have the bar code scanned by the gate agent before you boarded.

"Friedman," I said to myself, looking at this scene, "you are so twentieth-century . . .

You are so Globalization 2.0." In Globalization 1.0 there was a ticket agent. In

Globalization 2.0 the e-ticket machine replaced the ticket agent. In Globalization

3.0 you are your own ticket agent.

The television commercial is from Konica Minolta Business Technologies for a new

multipurpose device it sells called bizhub, a piece of office machinery that allows

you to do black-and-white or color printing, copy a document, fax it, scan it, scan

it to e-mail, or Internet-fax it-all from the same machine. The commercial begins

with a rapid cutting back and forth between two guys, one in his office and the other

standing at the bizhub machine. They are close enough to talk by raising their voices.

Dom is senior in authority but slow on the uptake-the kind of guy who hasn't kept

up with changing technology (my kind of guy!). He can see Ted standing at the bizhub

machine when he leans back in his chair and peers out his office doorway.

Dom: (At his desk) Hey, I need that chart. Ted: (At the bizhub) I'm e-mailing it now.

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Dom: You're e-mailing from the copy machine?

Ted: No, I'm e-mailing from bizhub.

Dom: Bizhub? Wait, did you make my copies yet?

Ted: Right after I scan this.

Dom: You're scanning at an e-mail machine?

Ted: E-mail machine? I'm at the bizhub machine.

Dom: (Bewildered) Copying?

Ted: (Trying to be patient) E-mailing, then scanning, then copying.

Dom: (Long pause) Bizhub?

VO: (Over an animated graphic of bizhub illustrating its multiple functions) Amazing

versatility and affordable color. That's bizhub, from Konica Minolta.

(Cut to Dom alone at the bizhub machine, trying to see if it will also dispense coffee

into his mug.)

Southwest was able to offer its at-home ticketing, and Konica Minolta could offer

bizhub, because of what I call the triple convergence. What are the components of

this triple convergence? The short answer is this: First, right around the year 2000,

all ten of the flatteners discussed in the previous chapter started to converge and

work together in ways that created a new, flatter, global playing field. As this new

playing field became established, both businesses and individuals began to adopt new

habits, skills, and processes to get the most out of it. They moved from largely

vertical means of creating value to more horizontal ones. The merger of this new

playing field for doing business with the new ways of doing business was the second

convergence, and it actually helped to flatten the world even further. Finally, just

when all of this flattening was happening, a whole new group of people, several billion,

in fact, walked out onto the playing field from China, India, and the former Soviet

Empire. Thanks to the new flat world, and its new tools, some of them were quickly

able to collaborate and compete directly with everyone else. This was the third

convergence. Now let's look at each in detail.

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Convergence I

All ten flatteners discussed in the previous chapter have been around, we know, since

the 1990s, if not earlier. But they had to spread and take root and connect with one

another to work their magic on the world. For instance, at some point around 2003,

Southwest Airlines realized that there were enough PCs around, enough bandwidth,

enough computer storage, enough Internet-comfortable customers, and enough software

know-how for Southwest to create a work flow system that empowered its customers to

download and print out their own boarding passes at home, as easily as downloading

a piece of e-mail. Southwest could collaborate with its customers and they with

Southwest in a new way. And somewhere around the same time, the work flow software

and hardware converged in a way that enabled Konica Minolta to offer scanning,

e-mailing, printing, faxing, and copying all from the same machine. This is the first

convergence.

As Stanford University economist Paul Romer pointed out, economists have known for

a long time that "there are goods that are complementary-whereby good A is a lot more

valuable if you also have good B. It was good to have paper and then it was good to

have pencils, and soon as you got more of one you got more of the other, and as you

got a better quality of one and better quality of the other, your productivity improved.

This is known as the simultaneous improvement of complementary goods."

It is my contention that the opening of the Berlin Wall, Netscape, work flow,

outsourcing, offshoring, open-sourcing, insourcing, supply-chaining, in-forming,

and the steroids amplifying them all reinforced one another, like complementary goods.

They just needed time to converge and start to work together in a complementary,

mutually enhancing fashion. That tipping point arrived sometime around the year 2000.

The net result of this convergence was the creation of a global, Web-enabled playing

field that allows for multiple forms of collaboration-the sharing of knowledge and

work-in real time, without regard to geography, distance, or, in the near future,

even language. No, not everyone has access yet to this platform, this playing field,

but it is open today to more people in more places on more days in more ways than

anything like it ever before

in the history of the world. This is what I mean when I say the world has been flattened.

It is the complementary convergence of the ten flatteners, creating this new global

playing field for multiple forms of collaboration.

Convergence II

Great, you say, but why is it only in the past few years that we started to see in

the United States the big surges in productivity that should be associated with such

a technological leap? Answer: Because it always takes time for all the flanking

technologies, and the business processes and habits needed to get the most out of

them, to converge and create that next productivity breakthrough.

Introducing new technology alone is never enough. The big spurts in productivity come

when a new technology is combined with new ways of doing business. Wal-Mart got big

productivity boosts when it combined big box stores-where people could buy soap

supplies for six months-with new, horizontal supply-chain management systems that

allowed Wal-Mart instantly to connect what a consumer took off the shelf from a

Wal-Mart in Kansas City with what a Wal-Mart supplier in coastal China would produce.

When computers were first introduced into offices, everyone expected a big boost in

productivity. But that did not happen right away, and it sparked both disappointment

and a little confusion. The noted economist Robert Solow quipped that computers are

everywhere- except "in the productivity statistics."

In a pathbreaking 1989 essay, "Computer and Dynamo: The Modern Productivity Paradox

in a Not-Too Distant Mirror," the economic historian Paul A. David explained such

a lag by pointing to a historical precedent. He noted that while the lightbulb was

invented in 1879, it took several decades for electrification to kick in and have

a big economic and productivity impact. Why? Because it was not enough just to install

electric motors and scrap the old technology-steam engines. The whole way of doing

manufacturing had to be reconfigured. In the

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case of electricity, David pointed out, the key breakthrough was in how buildings,

and assembly lines, were redesigned and managed. Factories in the steam age tended

to be heavy, costly multistory buildings designed to brace the weighty belts and other

big transmission devices needed to drive steam-powered systems. Once small, powerful

electric motors were introduced, everyone hoped for a quick productivity boost. It

took time, though. To get all the savings, you needed to redesign enough buildings.

You needed to have long, low, cheaper-to-build single-story factories, with small