ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Globalization - The World is not as Flat as Some Believe

Updated on December 7, 2012

Flattened World, Flattened Competitive Landscape

Thomas Friedman declared in a May 16, 2005 address at MIT, “The global economic playing field is being leveled.” Friedman heard this report from an Indian leader in the Bangalore software industry. “The world is flat,” Friedman concluded. He went on hiatus, researched, and then dissected business history into three periods. The first, 1.0, state of increasing world connectivity was nation-state exploration such as Spain sending Columbus to the New World. Phase 2.0 was 1800 to 2000 AD. This second phase involved corporation-driven internationalization in pursuit of markets and labor. The third phase, 3.0, is underway and began in 2000, according to Friedman’s framework. World 3.0 is a level playing field. It is individuals who drive the 3.0 phase. The shift from 2.0 to 3.0 transitioned in the latter half of the last thirty years. Critical aspects which have flattened the world involve Internet infrastructure and innovations which did not at all exist thirty years ago.

Stephen Tallman, author of Global Strategy, makes the same point as Friedman, in an extended explanation: “However, asset-seeking investment has been transformed in the modern era beyond the search for location-based comparative advantages tied to natural resources and inexpensive labor to a search for the best, most competitive worldwide source of new skills and knowledge as embodied, for instance, in Porter’s model of created advantage in national clusters.” Tallman agrees that globalization is a move from location to talent. Globalization is the move of business potential mining from geography and labor to talent and is not limited by distance. In this 3.0 phase, knowledge has increased.

What Porter Really Said

Michael Porter of the Harvard Business Review has certainly written on the topic of globalization. In this case, Porter’s idea that advantage is created in regions developing and possessing expertise (a talent pool) benefits the firms situated there. This returns us to “location” as an advantage. Globalization is “leveling the playing field” in many areas, but not all. In fact, Porter said:

“In theory, location should no longer be a source of competitive advantage. Open global markets, rapid transportation, and high-speed communications should allow any company to source any thing from any place at any time.”

Immediately after this quote, Friedman continued, “But in practice, location remains central to competition.” In Porter’s cluster analogy, those who are physically located close to specialized talent, such as IT firms in Bangalore and investment consulting in the American northeast, will have an advantage because of their location.

Michael Porter's 5 Factors Model - There are really many more factors: Greed, Religion, Power-mongering, and others.
Michael Porter's 5 Factors Model - There are really many more factors: Greed, Religion, Power-mongering, and others. | Source

Barriers to Globalization

Barriers

Barriers will continue to block complete globalization. Islam will continue to push for control of legal matters to Sharia law. It is a mandate of the religion that this should be pursued. There will continue to be sufficient leadership within Islam to push for this. Traditionally equal and free societies like Britain, Germany, France, the United States, Canada and others will be less than receptive to Sharia. Islamic law is anathema to equality, and, in practice, anathema to government of the people, by the people, and for the people. One barrier to the entrance of Turkey to the European Economic Union is the abduction and sexual enslavement of tens of thousands of women from Eastern Europe each year. In Pakistan, an aspect of Sharia law called hadood and zina make it virtually impossible for a woman to report a rape. Under hadood, conviction requires four male witnesses who are citizens and muslims in good standing. However, under Sharia zina laws, if a woman reports a rape, that is enough to convict her of adultery. "Religious" standards like these will continue to limit complete globalization.

Another barrier is organized corruption. When the former USSR dissolved, the eastern bloc nations claimed independence one by one. Hungary and the Czech Republic immediately adopted laissez-faire free market systems. Those nations have prospered. Romania and the Ukraine, contrarily, wither under the tight control of oligarchies. Powerful families in these nations control prices and wages.

Another barrier to complete one-world market creation will be political ideals. Religious ideals alone will not prevent total globalization. China, an atheist nation (Almond, Powell, & Dalton, 2008), has a political idea: the “One China” policy. To compel the Chinese people to support the government and a “manifest destiny” of a single world under control of one seat of power within China, The People’s Republic keeps tight control over socialization means such as the Internet. The PRC even hacked into Google’s secure servers and stole important algorithms, and attempted to gain access to gmail accounts belonging to human rights activists in China (Drummond, 2010). Friedman said, “Whatever can be done, will be done” (2005). But, not everything can be done.

The theories of Porter and other economists are really just single equations affecting a large pool of complex algorithms. Globalization may increase. But, it will never be level. Greed, religion, and power mongering will continue to keep some geographical regions down.

The Competitive Landscape

Globalization leveled competition. Tallman said that industries are now pressed to simply remain level with the field. In the past, firms worked to find and exploit competitive advantages. In today’s global economy, many advantages are available to many corporations. Keeping up with globalization is powering fast-moving markets and fast-growing corporations and nations. Profitability is tighter and more competitive in the global marketplace. A town coffee roaster a hundred years ago competed locally. Today’s coffee roasters compete with roasters all over the nation and internationally. Productivity is pushed by globalization to greater stages of efficiency. Operating manufacturing facilities at more efficient scales of economy is more critical. Every aspect of the value chain must be explored to gain competitive advantage. Profitability has exceeded a focus on sales. Profitability in the global market requires focus on all aspects of operations.

References


Almond, Gabriel A., Powell, G. Bingham, Jr., Dalton, Russell J., & Strom, Kaare. (Eds.) (2008) Comparative Politics Today: A World View, (9th ed.). New York, NY: Pearson Longman.

Tallman, S. (2009). Global strategy. Padstow, Cornwall, UK: Wiley.

Friedman, T. (2007, June 27). Southeast Asia::India. CIA world factbook. Retrieved October 31, 2011, from: http://www.youtube.com/watch?v=EcE2ufqtzyk

Porter, M. (1998). Clusters and the new economic competition. Institute for strategy and competitiveness. Retrieved October 31, 2011, from: http://www.isc.hbs.edu/econ- clusters.htm

Drummond, D. (2010, January 12). A new approach to China. Google blog. Retrieved October 29, 2011, from: http://googleblog.blogspot.com/2010/01/new-approach- to-china.html

Comments

    0 of 8192 characters used
    Post Comment

    • GoodLady profile image

      Penelope Hart 

      6 years ago from Rome, Italy

      Too bad plans have not been put in place to protect people's security in the workplace in the Western world. In the 19th century in England the Tolpuddle Martyrs sacrificed their lives so that there could be that security.

      We have gone backwards in this respect and moral codes are sadly, dangerously lacking (in the west).

      Best wishes for a Happy New Year and many thanks for your well put together informative Hub.

    • qlcoach profile image

      Gary Eby 

      7 years ago from Cave Junction, Oregon

      I'm concerned that globalization has hurt our economy in the US, because corporations eliminate jobs here as they seek cheap labor in other countries. So is that a good thing or a bad thing? Thanks for answering my question about counseling those who have addictions. Peace and Light...Gary.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)