By Thomas L. Friedman
Reviewed by Len Templeton
The World Is Flat begins with an explanation of how changes in technology have leveled the business playing field around the world. Countries such as India and China are now able to compete very effectively for business with large and small companies. Outsourcing has experienced explosive growth.
Why should you read the book? Author Thomas Friedman says that "in 2003 there were 25,000 U.S. tax returns that were done in India. In 2004 this number increased to 100,000. In 2005, it is expected to be 400,000. In a decade, you will assume that your accountant has outsourced the basic preparation of your tax returns—if not more." Can the same thing happen with financial planning? This is a book you need to read.
The first half of the book is a history of how the world became flat. Friedman examines ten different "flatteners" in detail and explains these well. The world was changed with the falling of the Berlin Wall and the entrance of millions of new workers into the world's work force (Russia, China, and India). Microsoft Windows made the computer easy to use. Netscape brought the Internet into our homes. Work-flow software was created. These were the things that brought people together and connected them.
From this platform, collaboration began to take shape. This led to open-sourcing, outsourcing, insourcing, offshoring, and supply-chaining. Work processes could now be broken down. X-rays could be sent to Indian doctors over the Internet and the results could be sent back before the next day. Digitization and cheap communications through fiber-optics after the dot-com bust made it easy for businesses to look for cost savings on each of their processes by finding lower-cost alternatives overseas.
This part of the book is fascinating and well written. Suddenly, this all made sense to me. Friedman tied everything I already knew together in a way that made it clear and refreshing.
Sadly, the rest of the book doesn't go anywhere. It is repetitive, full of inconsistencies, and missed opportunities. This is unfortunate. For example, Friedman says that free trade is good for America, then he devotes several chapters explaining that our workers aren't well educated, that we have a shortage of scientists and will lose our edge, and that our workers and young people don't have the "eye of the tiger" or hunger for success that is found in workers that are overseas. So, how can globalization be good for American workers?
Friedman misses a great opportunity to discuss some of the costs to us as consumers and as a nation of globalization. Recently I bought a notebook computer from Hewlett Packard. Unfortunately, there were software conflicts when I received the computer. After spending numerous hours on the phone with tech support in India, I finally returned the PC. The price of the notebook appeared attractive, but if you can't understand the person doing the tech support and he or she can't help you, then you have a problem. Is the cost of the computer really cheaper, or has the customer service been lessened? Friedman glorified the call centers in India and used HP as an example of a company that is improving their service and lowering their costs by sending American jobs to India. It is clear that he is friends with executives from the Indian firms and has no experience or real-world knowledge of HP.
Friedman relies on several interviews with senior executives of high tech firms as a basis for his research. His analysis is shallow and leads to faulty conclusions. I wish he would have ended the book after the first 222 pages. But no—he continues to ramble on for another 266 pages. The book is too long. Wait until it comes out in paperback, get a used copy, and read the first part of the book. Hopefully, you will get your copy before your competition has stolen your clients by outsourcing their "planning needs" to India.
Len Templeton is principal of Templeton Financial Services Inc. in Sun Lakes, Arizona.
New York: Farrar, Straus and Giroux, 2005