The World Is Flat Commentary: Offshoring, Is It Really Flat?

While it is easy to see how amenable the first chapter of Thomas Friedman's “The World Is Flat” engages in discussing outsourcing, for example, a fascinating and complex global mix of offshoring has evolved. As the topic of outsourcing has almost become a cliché several journal articles bring to light good information about offshoring in a world after the fall of the Berlin Wall. The first scholarly article by David Gefen and Erran Carmel is entitled, “Is The World Really Flat? A Look At Offshoring At An Online Programming Marketplace.” The second journal article to be described and reviewed is authored by Sunil Mithas and Jonathan Whitaker entitled, “Is the World Flat or Spiky? Information Intensity, Skills, and Global Service Disaggregation.” The third peer-reviewed journal to be summarized and is penned by is an investigative research study by Arnold Milstein and Mark Smith entitled, “Will The Surgical World Become Flat?.” 

The first article chosen, “Is The World Really Flat? A Look At Offshoring At An Online Programming Marketplace,” discusses offshoring from the aspect of information technology (IT) providers among nations. Gefen and Carmel make good points after examining nations and contracts which consider the number of IT service providers as matched to clients in different nations. They do not think the world is really flat because their data showed another story. What they found is that Americans preferentially choose to do offshoring in the context of foreign nations, while evidence showed that the rest of the world preferred to use domestic providers for their IT projects. 

In “Is The World Really Flat? A Look At Offshoring At An Online Programming Marketplace” Gefen and Carmel make a strong analysis based upon the data collected. For example, they looked at over “263,000 bids by over 31,000 providers from 70 countries” based upon roughly 20,000 IT projects altogether (p. 369). They discuss the world-is-flat idea they discuss Agency Theory (Principal-Agent), markets without friction in the classical economics sense, and argue that cultural distance and miscommunications can erase the cost-saving effects of offshoring to the supply chain. 

I think this is a good point, especially what is observed about the cultural distance. People have their own strong religious beliefs and customs. These patterns of behavior can and do affect business from the bidding process to the fulfillment of a project. Maybe offshoring actually can make the world seem flat in a widely general sense, however, the global economy is more complicated than that.  Also, I noticed that the article discussed the world as not being so flat in terms of the bidding process, because of how transactions are done. If you think about it this makes sense. Some cultures are used to negotiating everything with passion, while others are usually accustomed to a set price.  

In “Is the World Flat or Spiky? Information Intensity, Skills, and Global Service Disaggregation” Mithas and Whitaker argue that the world is not completely flat but can be choppy and spiky when considering service occupations on a global level. The certain jobs so identified were what they term 'high information intensity' occupations. The discussion revolves around the notion that there are more highly skilled jobs needed, with no lack of employment, but that data has shown salary growth to be lower. So for example when a manufacturer chooses to relocate its internal function by using workers in an offshoring situation, it may not only be cheaper but facilitates greatly the flat world ideology.  They also recognize that this is true when you narrowly focus on these kinds of highly intensified informational occupations, which have no need for physical presence. No need for physical presence, these researchers reveal, does have an impact upon global disaggregation. 

I have to agree with people who have high-skilled occupations in IT and IM programs, as studies suggest, do have a good potential of representing the world as flat in terms of commerce. Thinking about how the introduction of Netscape kicked everything off online with a revolution in communications technology, and personal computing, offshoring in this way seems to make a lot of sense in aiding online open-sourcing of certain projects. 

The third journal article, “Will The Surgical World Become Flat?” explores the medical world and cost-effectiveness. Milstein and Smith look at the world as being flat when American consumers, for example, find quality non-life-threatening surgeries cheaper in other countries. Their statistics show that there is a number of US-trained high-quality physicians and about 30 percent of households with a sick family member requiring coronary bypass valve operations would welcome the lessened expense. The article tracks how they gathered information, documented standards, and quality certifications too. Their findings show and categorize which countries' hospitals meet high standards for surgeons, for this particular bypass heart surgery.

The countries listed were India, Thailand, and Mexico. Offshoring in this sense places a twist on what you may not normally think about. Healthcare and offshoring in this way fill a unique gap and need. In this 'flat' healthcare world more and more Americans might catch on to it because of the vast numbers of individuals who lack medical insurance, adequate or otherwise. I think non-wealthy Americans deserve to have good healthcare access and to be treated like valuable human beings. 

Overall it is difficult to say whether the world is flat if you choose every industry, job, or sector of the economy. Besides that, the globalized economy also has a conflicting patchwork of various social and religious beliefs that are and will clash. Muslims and Christians, for example, have diametrically opposed faiths, and eventually this leads to many difficulties if any of them are extremists. Hopefully, we can learn to adapt to the global economy in a way that is beneficial to all and create a truly level playing field in financial matters and commerce. Certainly though the personal access to high-level computing makes the world flatter, as Friedman has suggested. 

The acceleration of global trade alone is phenomenal. The competition is very fierce everywhere. A factory may be very wise to accommodate its plant in an offshoring situation that is amenable. But one should always be aware of the different industries. From the globalized healthcare industry that overlaps clients from different countries to manufacturers who choose to locate the inner workings of their processing activities, the global village does have a twinge of being flat...but not in all cases. 

References

Doha, Q., & Salem, N. (2013). The world is flat [PowerPoint slides]. Retrieved from http://www.slideshare.net/11ns/the-world-is-flat-983408 

Gefen, D., & Carmel, E. (2008). Is the world really flat? A look at offshoring at an online programming marketplace. MIS Quarterly, 32(2), 367-384.

Milstein, A., & Smith, M. (2007). Will the surgical world become flat? Health Affairs, 26(1), 137-141. doi:10.1377/hlthaff.26.1.137

Mithas, S., & Whitaker, J. (2007). Is the world flat or spiky? Information intensity, skills, and global service disaggregation. Information Systems Research, 18(3), 237-259.