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By Root 6843 0

outlets, to the United States of America itself. As a result, many of the structural advantages that America had in the Cold War decades are being erased. Yes, America still has an abundance of land for agriculture, a ring of port cities like no other country, and huge domestic natural resources. But these alone are not enough to drive our GDP anymore, especially when you think about what we no longer have: overwhelming dominance. America emerged from World War II as the only major economy with its industrial base intact. Europe and Japan eventually caught up, but other major countries didn’t really compete. China was all but closed, its energies diverted by Maoism and a cultural revolution. India was less closed, but its leaders were content with 2 percent per capita net annual growth. Brazil was partly closed, and handicapped by populist economic policies. Manufacturers in Korea and Taiwan concentrated on cheap plastics, consumer electronics, and textiles, although they later entered the semiconductor business. The United States was able to vacuum up the best minds from India, China, the Arab world, and Latin America, where there were few opportunities for unfettered innovation or academic research. Wall Street firms dominated global markets and America had the world’s only developed venture capital system. It wasn’t that Americans were not hard workers or that our rising living standard was some fluke of history. We did work hard. Our success was based on real innovation, real education, real research, real industries, real markets, and real growth—but the playing field was also tilted in our direction. Now we have to try to sustain all those good things without all those structural advantages. Your children will only know that world when everything was tilted America’s way from reading history books. The merger of globalization and the IT revolution can make us either better off or worse off—richer or poorer. It depends on us—on how well we understand this new world that we invented and how effectively we respond to it.

Flat World 1.0

Globalization and the IT revolution are totally intertwined, each being spurred on by the other. New technologies erase boundaries, break down walls, and connect the previously disconnected. Then those connected people and firms and governments build up webs of trade, commerce, investment, innovation, and collaboration that create markets for, and demand for, more technologies to connect more people at even lower costs.

It all happened so fast, but it is clear that sometime around the year 2000 many people in many places realized that they were engaging with people with whom they had never engaged before—whether it was Tom’s mom and her new online bridge partner in Siberia or the local gas station owner discovering through the Internet a new supplier of cheaper tires in Panama. At the same time, these same people in these same places discovered that they were being touched by people who had never touched them before—whether it was a young Indian voice on the phone from a Bangalore call center trying to sign them up for a new Visa card or a young Chinese student in Shanghai who had just taken the place they had hoped to have at Harvard.

What they were all feeling was that the world is flat (the title of Tom’s 2005 book)—meaning that more people could suddenly compete, connect, and collaborate with more other people from more different places for less money with greater ease than ever before in the history of humankind. That flattening, which would eventually affect businesses, schools, armies, terrorist groups, governments, and—most of all—individual workers across the globe, was the product of three powerful forces that came together between the late 1980s and the new millennium.

The first was the personal computer, which enabled more and more people to create their own content—words, books, algorithms, programs, photos, data, spreadsheets, music, applications, and videos—in digital form. Men and women have been creating what we now call “content” ever since cavemen and cavewomen