Friedman vs. Florida

Thomas Friedman’s The World is Flat and Richard Florida’s The World is Spiky offered competing hypotheses on the underlying drivers of the world’s current economic order. Friedman’s Flat World hypothesis suggested that technological advances have provided individuals with the power to collaborate and compete globally and, in doing so, have begun to develop a single knowledge network that is raising standards of living in developing places and providing developed countries with additional markets and demands. According to Friedman, this ‘flattening’ of the world enables companies and individuals to source work anywhere and has created an environment where companies must take advantage of market and labor arbitrage strategies that decrease costs and increase efficiency through off-shoring and outsourcing (Friedman, 2007). Ultimately, Friedman concluded, this allows companies to “be more global than ever and, yet, at the same time, more personal than ever” (2007, p. 45).

 Conversely, Florida analyzed geographic, patent generation, and economic activity data and concluded that a few cities and regions are responsible for the vast majority of global innovation and growth. With patent generation and scientific advances concentrated in several American, European, and Asian cities, Florida suggested that “surprisingly few regions truly matter in today’s global economy” (2005, p. 48). According to Florida, innovation, economic growth, and prosperity occur in the locations that attract top creative talent and, due to economic forces that are concentrating people and resources, a few cities and regions that drive the world economy are growing while other locations are languishing (2005). Finally, in a nod to Friedman’s Flat World meme, Florida stated that the current economic order has resulted in a slight dispersal of the world’s peaks and a shift of the world’s hills. However, these shifts have not fundamentally altered the reality that innovation remains firmly concentrated.  

Of these two competing interpretations, Florida’s innovation concentration model resonated with me and is more supported by available GDP statistics. According to the McKinsey Global Institute, the world’s largest 100 cities generated 38% of total global GDP in 2007, while the largest 600 cities generated over 60% of global GDP in the same year (McKinsey, 2011). Company analysts predicted that 2 billion people will live in the world’s largest 600 cities by 2025, a number that equates to 25% of the global population. Within this selection of cities, the major urban areas in developed regions accounted for the majority of the total GDP figure, with the 380 developed world cities listed in the top 600 responsible for over 50% of 2007’s global GDP (McKinsey, 2011).  These figures indicate economic activity is extremely concentrated in a small number of urban, mostly developed-world locations.

Interestingly, McKinsey analysts agreed with Florida that the world’s peaks and hills will shift over the next decade; based on population growth estimates and other factors, the company projected its list of the world’s 600 largest cities will change as the center of gravity of the urban world moves to China, India, and Latin America. This shift, which will see the rise of over 100 major cities in China and over a dozen in India, will provide development opportunities in these locations and create additional markets for multinational corporations interested in expanding to high-growth population centers. This is where I see the applicability of Friedman’s Flat World theory – these upcoming urban areas will benefit from the trends Friedman identified and will likely grow faster and contribute more to GDP because residents are more able to collaborate and compete globally and corporations are more inclined to invest and recruit in these areas. Overall, I see the world flattening in certain specific locations – while Friedman is correct that the companies and individuals possess technology that enables them to work effectively from anywhere, GDP growth, patent production, population growth, and general economic activity is still concentrated in a very small number of places. This suggests that the technology Friedman identifies as responsible for leveling the global playing field is mainly doing so and will continue to do so in a small number of urban centers.   

 In terms of this week’s learning objectives, new media and web-based tools and practices are certainly enabling individuals and corporations to employ out-sourcing, home-sourcing, and other labor practices that save time and money. Furthermore, these tools are encouraging collaboration, developing new avenues for investment, and increasing productivity. With the advent of new media and web tools, workers have more freedom of movement, more access to information, and are better able to communicate, connect, and produce without regard to time and space. These factors are driving productivity gains while also fundamentally changing the relationship between an employer and an employee – with such easy access to data and the ability to work from anywhere, the barriers between the office and the home are deteriorating and employees are expected to remain in constant contact with their professional responsibilities. This is slowly erasing the typical defined hour work week for many professionals, and replacing it with a work continuum that accounts for time, space, duties, and connectivity capabilities.

Florida, R. (2005, October). The World is Spiky. The Atlantic Monthly, 48-51.

Friedman, T. (2007). The World is Flat (3rd ed.) New York: Picador.

McKinsey Global Institute. (2011). Urban World: Mapping the Economic Power of Cities. McKinsey & Company.

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8 thoughts on “Friedman vs. Florida

  1. Very nice comparison and use of statistics to supplement your ideas. I totally agree with your conclusions (siding with Florida). The point I would add here is that Friedman’s major contribution was to frame this issues (G1, G2 and G3). His other books on culture and global warming are also issue framers without any science at all behing his conclusions, but he is always a great read and a great ideas man.

    About collaboration, I find much of it in the business and military worlds today to be critically important but often more fad than purpose. What is your considered take on collaboration?

    • I think collaboration is being made much easier with the variety of web tools that now exist and, as these tools become more mainstream, virtual collaborating will become a typical business practice. It already is in many industries, but I see so many opportunities to harness the power and intelligence of crowds – I think this is where we’ll see the next phase in the changing of business practices: we’re moving in a direction from collaboration within organizations to collaboration with external constituencies. As this trend matures, we’ll see consumers and individuals with the ability to influence and shape business strategies by ‘participating’ with companies through social media and other technologies. This is changing the way companies approach advertising and breaking down the company-customer divide.

  2. Very intrigued by your worker comments, particularly about the notion that connectivity has created the endless work week in which we not only e-mail office issues at 9:00 p.m., but we also expect to be answered! I completely agree with your paragraph and wonder if you were confused by the Yahoo and Best Buy moves to eliminate remote workers and require “office hours” for everyone. I wonder if this will create a backlash not on the basis of “I don’t get to work out of my home anymore” but more along the lines of a backlash on “since you want me at the office 8-5, that’s when I’ll work” and as a result, folks will stop working off hours, weekends, etc.

    I know that I’ve had jobs that required 24×7 connectivity and a great joy in my current position is knowing that absent the building burning down, I don’t need to work on weekends. It has been incredibly liberating as compared to my last assignment.

  3. Well said Mr.Bonadies. Web-based tools and practices are definitely enabling people and oranizations to be more efficient with time and money. A couple of my friends work from home. They work 8 to 10 hours, solid salaries, and have home offices. They love it. I am actually I bit jealous because I have an hour commute to work if there is no traffic. (In LA there is always traffic) so I lose almost three hours of my day in traffic. Out-sourcing and home-sourcing is at its finest thanks to techonlogy. Friedman was certainly right about the ‘flattening’ which enables companies and individuals to source work anywhere. With technology advancing everyday there is no telling what technology will enable us to do next.

    • Totally agree, Maria, which is why the move last week by Yahoo’s CEO to cut back on telework surprised me. I am sure we will get into this issue more as this class develops…and obviously, for a Virginian like me to teach courses for a Nebraskan university suggests where I fall… 🙂

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