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Online Study Guide: The World is Flat by Thomas L. Friedman

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BOOK NOTES: THE WORLD IS FLAT BY THOMAS FRIEDMAN

America and the Flat World: Chapters 5 - 9

Summary

The broad message for this section of the book is “that while protectionism would be counterproductive, a policy of free trade, while necessary, is not enough by itself.” Friedman argues that free-trade policy must be accompanied by both domestic and foreign strategies, which will help Americans adjust to the flat world. Domestically, Americans must have the opportunity to upgrade their education so they can compete for jobs in this new world. Globally, restricted markets must be opened; this includes some of the United States’ markets, such as agriculture. In bringing more nations into the global-free-trade system, Friedman argues that job migration and unemployment will be decreased because there will be a greater demand for goods and services in each nation, which will also stimulate innovation.

In chapter five, “America and Free Trade: Is Ricardo Still Right?” Friedman asks if David Ricardo’s free-trade theory of comparative advantage still holds in a flat world. This theory “stipulates that if each nation specializes in the production of goods in which it has a comparative cost advantage and then trades with other nations for the goods in which they specialize, there will be an overall gain in trade, and overall income levels should rise in each trading country.” Friedman concludes that this principle does still hold and says the basic message of chapter five is that the U.S. will benefit more by adhering to the general rules of free-trade than by erecting walls against outsourcing and offshoring. Friedman, then, outlines the argument against outsourcing and offshoring and demonstrates why it is problematic.

The school against free-trade argues that there are more tradable goods and services than there have ever been before. This school believes that the United States and other developed nations are headed for an absolute decline if they fail to protect service industries and high-end manufacturing because, with so many people entering the global economy, wages will inevitably become lower. Friedman counters this argument by explaining that while there may be a transition phase, there is no reason to believe that wages will remain low as long as the “global pie” keeps growing--that is, as long as more people demand these goods and services, more people will be needed to produce them. What will change in the flat world is how nations define their comparative advantage. Friedman points out that the Chinese and Indians are racing Americans to the top, not to the bottom. This race will foster higher standards for everyone.


In chapters six (“The Untouchables: Finding the New Middle”) and seven (“The Right Stuff: Tubas and Test Tubes”) Friedman asks “What kind of good middle-class jobs are successful companies and entrepreneurs creating today?” and “How do workers need to prepare themselves for those jobs, and how can educators help them do just that?” Friedman argues that the key to thriving as an individual in the flat world is to become an untouchable, which he defines as someone whose jobs cannot be “outsourced, digitized, or automated.” Friedman points out that as services and goods become increasingly tradable, more jobs are likely to become outsourced, digitized, or automated. He predicts that untouchable jobs in the new flat world will fall into three, broad categories: people who are “special or specialized” (e.g. Madonna, Michael Jordan, or your brain surgeon); people who are “localized and anchored” (e.g. waitresses, lawyers, plumbers, nurses, etc.); and “the old middle jobs” (e.g. people in the middle class who are under pressure because their jobs are becoming tradable). Friedman explores what he thinks the new middle-class jobs will be in the flat world, calling the people who will occupy those jobs--which he divides into eight categories-- “the new middlers.”

The first category is “Great Collaborators and Orchestrators.” These jobs will be in sales, marketing, maintenance, and management. Great collaborators and orchestrators must collaborate horizontally and possess ability to translate the services of a global company for the local market. The second category is “The Great Synthesizers.” The great synthesizers will be able to combine disparate parts around consumer demand to synthesize a solution. For example, Dell is more successful than IBM, which used to make the chip, the computer, and the software itself. Dell, conversely, does little design or manufacturing. It brings parts together, created elsewhere, and satisfies the customer’s demands. The third category is “The Great Explainers.” These people are the managers, writers, teachers, producers, journalists, and editors who can explain, in simple terms, the complexity of what is happening. The fourth category is “The Great Leveragers.” These people have the ability to leverage technology to design computer programs that enable others to work smarter and faster. The great leveragers know how to combine the best of what computers can do with the best of what people can do--making both much more productive. The fifth category is “The Great Adapters.”

The great adapters are also known as versatilists--people who have a high degree of skill, but who are able to apply their talents to a variety of situations, thus developing new competencies. Great Adapters can improvise, but they also continue to learn and grow. The sixth category is “The Green People.” This group is devoted to energy and environmental issues, which will become more significant as more people realize the stress emerging technologies and growing populations place on natural resources. The seventh category is “The Passionate Personalizers,” which includes people who add a personal touch to a vanilla job. Friedman offers the example of a man who sells lemonade at Camden Yards. This man, who sells a simple product, personalizes it by doing a jig while preparing the drink and offering a high five before serving it. The eighth and final category is “The Great Localizers.” In this category local businesses, or individuals, will be able to compete globally by taking advantage of new technologies. Examples Friedman offers include a freelance writer who makes use of a satellite dish, a DSL line, a Blackberry, etc.; or a sports bar owner who uses multiple satellite feeds on a variety of flat-screen televisions to bring multiple games to his customers at once.

In chapter 7, “The Right Stuff: Tubas and Test Tubes,” Friedman outlines four skill sets and attitudes that educators and employers point to as “the right stuff” to make it in the flat world. The first skill set individuals must possess is the ability to “learn how to learn.” This is an essential skill because what we know is constantly becoming outdated in the flat world. In this new world, a person’s ability to learn is just as important as what he or she knows. Friedman dubs the second skill set “CQ + PQ > IQ.” Friedman argues that it has always been important to have curiosity and passion for success, but in the flat world these elements are even more significant because there are so many more tools to take a person further. Therefore, Friedman contends that the curiosity quotient (CQ) and the passion quotient (PQ) matter more in the flat world than the intelligence quotient (IQ). Friedman maintains that students with curiosity and passion will teach themselves how to learn and will be the most successful. The third skill set/ attitude Friedman uncovers is “Plays Well with Others.” It is important to like people and to get along well with others because new middle jobs are emerging that involve human interaction and cannot be outsourced. The final skill set/ attitude Friedman believes will be necessary in the flat world is “The Right Brain Stuff.”


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