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62 pages 2 hours read

Thomas L. Friedman

The World Is Flat: A Brief History of the Twenty-First Century

Nonfiction | Book | Adult | Published in 2005

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Part 2, Chapters 5-7Chapter Summaries & Analyses

Part 2: “America and the Flat World”

Chapter 5 Summary: “America and Free Trade”

Friedman focuses on the effects of free trade on the United States, both its benefits and its harms. Friedman concedes that free trade will cause some Americans to lose their jobs and that “[w]hen you lose your job, the unemployment rate is not 5.2 percent; it’s 100 percent” (264). Nevertheless, he believes free trade is better for America.

When free trade opens new markets, the “economic pie” is increased, expanding opportunities for everyone. New goods and services also continually arise as markets become more complex. There is no way to predict what new jobs this process will create. One example is search-engine optimization. Until Google made search engines big business, this kind of work did not exist. Now it is an important field.

Friedman gives a simple example involving America and China in which, hypothetically, both countries have 80 high-skilled workers, America has 20 low-skilled workers, and China has 920 low-skilled workers. If the two countries sign an agreement to open their markets, the high-skilled workers in America have it pretty good. While there is more competition, the total market went from 100 people to 1,100 people. The 20 low-skilled workers in America face a greater challenge than their 920 counterparts in China. Their wages will likely decline with so much competition, and some will lose their jobs. These workers will need to move vertically into better paying jobs by gaining new skills and education. But China won’t have a stranglehold on the low-skilled jobs forever. As its living standards and wages rise, other countries will come along to challenge China and siphon off some of these jobs. Such is the cycle that free trade creates.

According to Friedman, complex and high-skilled jobs will continue to grow. As he points out, the world economy incorporated the growth of Europe and Japan after World War II without damaging the United States economy. America’s standard of living consistently rose, and the unemployment rate stood at five percent when this book was written.

Friedman cites the semiconductor industry, which is dominated in America by Intel. As foreign companies started to compete at the low end of the market, they took away some of Intel’s market share. Intel was forced to innovate, finding new applications and devising specialty chips for higher-end uses. The company continued to thrive, and uses for chips became more complex.

Economists use the example of United States railroads in the nineteenth century to illustrate the incorporation of China and India into the world economy. When railroads began to connect disparate regions of the United States, some local companies went out of business due to competition. But the markets greatly expanded, capital was reallocated, and eventually living standards rose for everyone. 

Chapter 6 Summary: “The Untouchables”

This chapter discusses how Americans can compete in a new flat world. The key, according to Friedman, is to become “untouchables,” or “people whose jobs cannot be outsourced, digitized, or automated” (280). Work that is transferrable (or “fungible”) will likely be sent overseas, and jobs that can be automated will become obsolete.

Friedman describes three main categories of untouchables: (1) The “special” or “specialized” people are unique in their fields; think: Michael Jordan or J. K. Rowling. (2) “Localized” or “anchored” workers fill jobs that are needed in a particular, physical place; think: nurses, dentists, and plumbers. (3) And the third category consists of people in formerly middle-class jobs whose work was once non-fungible but is now becoming fungible due to the ten flatteners.

Friedman writes that the United States economy has long been shaped like a bell curve with a large middle, and that shape must be preserved for the country’s economic and political stability. To maintain the middle class, which represents the large middle in the bell curve, we must identify the roles—and the education and skill sets required to perform them—that are less likely to be outsourced or eliminated. Friedman lists some of these roles:

  • Great Collaborators and Orchestrators: These are people with exceptional people skills. As one venture capitalist put it, “We actually have no shortage of ideas. What we are short is people who can execute them” (287).

  • Great Synthesizers: Innovation will come from people who can combine things that normally do not go together. Value is added in any market when elements are synthesized based on consumer demand.

  • Great Explainers: These are people who can explain complex ideas in simple ways, including teachers, writers, and managers. This skill becomes especially valuable as the volume of information increases. Friedman gives the example of a photographer who moved from making traditional prints of photos to teaching digital photography skills due to changing technology and demand.

  • Great Leveragers: The key here is using technology in precise and varied ways to meet people’s needs. An example is Electronic Data Systems, the company founded by Ross Perot. Perot launched his career by leveraging computing power to process companies’ data.

  • Great Adapters: We often think that specialization is important for gaining an edge on our competition, but this category is about the power of generalists who are versatile enough to adapt to any situation. Shrinking budgets in a competitive market means that companies need employees who can fill one gap and then morph to fill another.

  • Green People: Renewable energies and sustainable systems will become increasingly important as living standards rise in countries with large populations, like India and China. People who can work in these fields will be necessary to limit environmental destruction.

  • Passionate Personalizers: This means adding value to a mainstream “vanilla” job in a personalized way, often by following one’s passion. This makes the job—and the person who performs it—unique.

  • Math Lovers: Math is involved in digitization, which is the bedrock of a flat world, so it will be extremely important for future work. Computers are now used in virtually every job, including those not traditionally seen as tech-intensive, such as nursing and car repair.

  • Great Localizers: Small and medium-sized businesses still provide the majority of jobs. A flat world allows them to compete at the global level, but it also means that global elements can be tailored to local needs. This could be a local business finding a supplier halfway around the world. 

Chapter 7 Summary: “The Right Stuff”

In this chapter, Friedman discusses how to prepare for the new economic realities of the flat world, including how to educate the children of today to meet upcoming challenges. Friedman believes we must first teach children how to learn—because, to be adaptable, it is crucial to have the desire and ability to learn new things.

The next most important preparation tool is to learn to navigate the World Wide Web. Much of the information found online is unfiltered, so individuals must hone the skills to distinguish between what is true and what is false. Some schools don’t allow students to cite information from Wikipedia because the site is not rigorously edited by an authoritative source. As one parent tells Friedman, “They meant well—they thought they were teaching kids to be careful. But what they were actually doing is missing an opportunity to teach them how to navigate” (313). Instead of banning websites, schools need to teach students how to check facts.

Friedman argues that having passion and curiosity trumps intelligence alone, expressing this idea as the formula “CQ + PQ > IQ” (313). If a student is not born with an innate sense of curiosity or his family does not foster curiosity in him, teachers need to spark this missing curiosity. Next, Friedman stresses the importance of the liberal arts. Although he previously wrote about the need to study math, he states that the liberal arts foster a “horizontal form of education” since they are “about making connections among history, art, politics, and science” (316). People who are creative and make breakthroughs—who “connect disparate dots”—are often those who don’t specialize in just one thing (316). Friedman cites Steve Jobs, who drew on a wide variety of experiences and disciplines when he directed Apple.

Finally, to meet the upcoming challenges of the flat world, individuals must use their right-brain skills. Though both sides of the brain work together, the left side focuses on rational tasks (e.g., computation and analysis) while the right side deals with more creative tasks (e.g., synthesis). As author Daniel Pink tells Friedman, “Now that foreigners can do left-brain work cheaper, we in the U.S. must do right-brain work better” (322).

The example that illuminates Friedman’s argument in this chapter focuses on the mission of Georgia Institute of Technology’s president to improve the school’s quality of education. When G. Wayne Clough became president in 1994, only 65 percent of the institute’s students graduated. The institute’s curriculum was uninspired, and its atmosphere was cold and rigid. During his engineering career, Clough noted that the best engineers were the ones who brought creativity to the job, not those who had earned the best grades as students. He soon realized that the most talented students had some creative outlet that they pursued outside of their studies. This led him to recruit more students who “played musical instruments, sang in a chorus, or played on a team” because they were often more outgoing and better at communicating (325). A decade later, graduation rates rose to 76 percent.

The chapter ends with Friedman noting all the ways that America is poised to do well in the flat world. Among the country’s advantages are a deregulated, free market; great openness and flexibility, fostered in part by its short history and lack of traditions; numerous institutions of higher education, including strong research universities with a great deal of competition; efficient capital markets that are well regulated; political stability; and strong intellectual property protection. Together these criteria create trust, the main ingredient in “America’s secret sauce” (334). 

Part 2, Chapters 5-7 Analysis

This section of the book is entitled “America and the Flat World.” First, Friedman examines whether the 18th-century British economist David Ricardo was right about the comparative advantages of international trade. Acknowledging the adjustments and disruptions that accompany free trade, he concludes that overall it will benefit America. This conclusion partially stems from comparing today’s situation to historical periods when similar changes took place because of free trade, such as the completion of the transcontinental railroad in the United States. Friedman emphasizes that the global economy is not finite and that change due to free trade can create new jobs and even entirely new industries, adding to overall growth.

Friedman predicts some areas of job/career growth in America, and he offers suggestions for how young people should be preparing for adulthood in a flat world. Essentially, Friedman advises individuals to make themselves unique, to stand out from the crowd—to  avoid “vanilla”-type work. Friedman also discusses the skills necessary to adapt to globalization, many of which relate to working horizontally and collaboratively. Adaptability is key. Instead of choosing specific disciplines to study, students should cultivate adaptability by: learning how to learn, maintaining curiosity, and becoming discerning consumers of online content. Friedman stresses that a liberal arts education will help students become great adapters because, rather than specialize in one subject, students will learn to make connections among disparate topics and to apply their creativity to an unlimited number of situations. 

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