In his new book The World is Flat: A Brief History of the Twenty-First Century, author Thomas L. Friedman describes three phases of globalization.
According to Friedman, Globalization 1.0 lasted from 1492, when Columbus set sail, until around 1800. He says the driving force of this wave of globalization was how much muscle participating countries had, and how they deployed it.
In Globalization 2.0, which lasted roughly from 1800 to 2000, the change agents were multinational companies. Friedman believes global integration from 1800 to 1900 was powered by falling transportation costs that resulted from development of the steam engine and the railroad.
In the second half, decreasing telecommunications costs—thanks to the invention and dissemination of the telegraph, telephones, PCs, satellites and the World Wide Web—drove globalization. “It was during this era that we really saw the birth and maturation of a global economy, in the sense that there was enough movement of goods and information from continent to continent for there to be a global market, with global arbitrage in products and labor,” Friedman writes.
Each of these waves of globalization had the effect of making the world smaller by opening up new lines of communication and commerce. But Friedman argues that a third era—Globalization 3.0, which began around 2000—is having the effect not only of shrinking the world but of flattening the playing field for individuals and companies large and small.
The driver of Globalization 3.0, according to Friedman, “is not horsepower and not hardware, but software—all sorts of new applications—in conjunction with the creation of a global fiber-optic network that has made us all next-door neighbors.”
As that statement implies, much of Friedman’s book is focused on the information technology and service industries. But many finishers in the United States and other high-wage, high-regulation countries are feeling the pressure of global competition in the form of offshoring—migration of business to a low-labor-cost country from a high-wage country or establishment of a manufacturing operation in a low-cost country that replaces a facility in a high-wage country.
How is your company handling the pressures of global competition? Unfortunately, some in the U. S. finishing industry have been unable to keep up. Shops have closed and good-paying jobs have been lost.
If you’re still here, your company must be doing something right. Continued success will require working smarter and harder to develop a niche, add more and more value for customers and improve quality and productivity using lean manufacturing, six sigma, and other management techniques.
In the coming months, we’ll be bringing you information on many different products and processes. But a common thread running through all these stories will revolve around how finishers in the United States are not only surviving but thriving in the global economy.