America and the Flat World
Summary of Chapter Five: America and Free Trade: Is Ricardo Still Right?
Friedman says he has always believed in free trade, but now thinks he should look at the issue again to see if there are different implications in a flat world. David Ricardo (1772-1823), the English economist, advocated free trade between nations, arguing that each nation would produce its own specialty and buy the specialty of the other. When he wrote, however, goods were tradable, but knowledge work and services were not. In spite of this, Friedman decides that free trade is the way to go. We should not try to raise barriers to outsourcing.
With so many more workers entering every field, wages are bound to go down for some and level out. He argues, however, there is no fixed “lump of labor” with only so many jobs available and all inventions having been invented. He thinks Globalization 3.0 can be a win-win situation for all, even though it may entail change and transition. Those who will have the most trouble are the low-skilled workers and manual laborers. They will have to upgrade their education and skills. The ones who do well in Globalization 3.0 are the idea-workers who can create niches. There is no end to idea-based innovation.
Commentary on Chapter Five: America and Free Trade: Is Ricardo Still Right?
Friedman gives the example of how jobs have continually changed in the United States. 150 years ago, 90 percent of Americans worked in agriculture. Now, with the industrialization of agriculture, less than 3 percent of the population grows our food. Similarly, we were not able to control the semiconductor industry as other companies and nations took this technology for their own. The result was market expansion and more diversity of applications. There will be a constant flow of jobs out of America, and Americans need to be aware, to update their own skills. The Indians and Chinese are not racing us to the bottom, but to the top. Friedman constantly gives a pep talk in this book for everyone to get into the competition by being smarter, hard working, and computer savvy. We are not going to stop the process of technological globalization, so we had better join it and be the best.
Summary of Chapter Six: The Untouchables: Finding the New Middle
American students should see themselves competing against students from around the world, not just other Americans. They need to be flexible and self-motivated. They have to fit into someone's supply chain, justify their jobs every day by creating value, and cannot afford to be mediocre. The young have to figure out a way to be part of the new “untouchable” middle class, so their jobs cannot be outdated or outsourced. The most secure jobs are for someone who is really specialized (a brain surgeon, a writer like J. K. Rowling) or by someone localized (gardeners, nurses, cooks). Jobs in danger today are former middle-class jobs such as an accounts-payable clerk. Services like accounting are easily outsourced.
The new middle class will have to be multidimensional and multicultural collaborators. They will have to work both locally and internationally in a horizontal network. They will be synthesizers of various products and services, such as the SEOs (Search Engine Optimizers), or Great Explainers like writers, teachers, and editors who can create simplicity. The Great Leveragers will get every drop out of every new technology. Great Adapters or Versatilists will replace specialists. To be successful you will have to be passionate and personal. You will also have more than one competency and area of expertise to fall back on.
Commentary on Chapter Six: The Untouchables: Finding the New Middle
Friedman reviews where the new careers will be for the middle class whose old service jobs are being outsourced. He discusses ways of creating a niche and for staying in that niche or modifying it as one goes along to constantly create unique value. Being competent only gets one in the door; skills are not enough. One new angle is to be able to localize the global. There is room for small businesses that tailor global ideas for a local community. This might include a freelancer doing a business from home or a coffee shop with wireless. The personal touch will become important again as well as people who have multiple competencies. A personalized portfolio career with many hats and back-up expertise helps to situate one in a flexible position, in a changing world.