Globalization is a process of interaction and integration among people, companies, and governments of different nations. It’s driven by international trade, investment, and aided by information technology. Globalization 1.0 occurred between 1492-1800, when the Old World was expanding markets and acquiring riches primarily by discovering the New World. The main force pushing the process of global integration was how power a country had and how creative they could organize it. Countries and governments led the way in breaking down walls and bringing the world together, driving global integration.
Interrupted by the Great Depression and World War I and II was Globalization 2.0 which lasted from 1800 to 2000. With the rise of industrialization, multinational corporations emerged, making use of modern transportation and telecommunication technology to expand operations into the global market. They looked for opportunities to lower labor costs and collaborate with other countries, utilizing outsourcing and offshoring manufacturing techniques. The creation of a global economy in which goods and information moved freely further "shrunk" the world.
Several significant technologies were created during this period of innovation: the spread of railroads and telephone lines in the 1800s connected people from across the nation in ways that they had never been able to before. The Industrial Revolution at the turn of the century created the modern business structure in the field of manufacturing, and the stock market appeared as an important part of the global economy. By the late 1970s, home computers were being put on the market, along with user-friendly Windows software that made computers a commercial success. In the early 1990s, British computer scientist Tim Berners-Lee created the World Wide Web, and with the launch of Netscape in 1995, the Internet became accessible to nearly everyone who owned a computer. The Google search engine was introduced to the Web in 1997, giving everyone equal access to an unlimited amount of information. With increased accessibility, came the demand for more computers, software, and telecommunications networks. Everyone with a computer became connected to everyone else, and collaboration brought about further innovation, quickly flattening the world and ushering in the next phase of globalization 3.0.
Globalization 3.0 began in 2000 and is continuing through this day. This third era is about the world coming closer together, becoming something like a global village. Friedman describes this era as the flat-world platform. Globalization 3.0 is empowering individuals and is the driving force of businesses and individuals competing against others in the nation. With the enhancements of technology, the world can now work together and combine forces to improve. The technologies of today make it difficult to keep new ideas and advancements a secret which makes it easy to recreate any product and make things in a matter of days. However, building a process that delivers those items across the globe is more complex and involves dozens of suppliers, distributors, port operators, customs brokers, forwarders, and carriers to join in an organized supply chain. Supply chains become important because it allows a company to take advantage of the best producers at the lowest prices anywhere they can be found. So global supply chains, which pull parts and products from every location of the world have become vital for both retailers and manufacturers. The challenges of developing a global supply chain in a flat world are global optimization and the ability to manage possible problems with supplies and predicting the demand. It doesn’t matter if a part can be obtained cheaper in one place. The key is that the total cost of delivering all of the parts on time, from all locations of the globe to the factories or retail outlets at a lower cost than competitors.
Friedman calls the…