The flattening of the world, or not

The High Priest of Flatness, Tom Friedman, explained Globalization 1.0 to all of us in his book The World is Flat.  The book explains ". . . how the flattening of the world happened at the dawn of the twenty-first century, what it means to countries, companies, communities, and individuals, how governments and societies can, and must, adapt."  Clearly globalization has happened, it is happening, and will probably accelerate in the future. 

Flatness has always been a relative term, dependent on context.  Pankaj Ghemawate of the IESE Business School in Spain has a wonderful new book, Globalization 3.0, that makes a powerful argument that what we have really been experiencing is a kind of semi-globalization.  Flatness yes, but  with plenty of mountains.  He has the numbers to illustrate his point.  Consider for example:

• Only 2% of students are at universities outside their home countries.
• Only 3% of people live outside their country of birth.
• Only 7% of rice is traded across borders.
• Only 7% of directors of S&P companies are foreigners.
• Less that 1% of all American companies have any foreign operations.
• Exports are equivalent to only 20% of global GDP.
• Air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels.
• 42% more trade if they share a common language than if they do not.
• 47% more if both belong to a trading block.
• 114% more if they have a common currency.
• 118% more if they have a common colonial past.
• Foreign direct investment accounts for only 9% of all fixed investment.
• Less than 20% of venture capital is deployed outside the fund's home country.
• The world spends $88 billion a year on processing travel documents and in a tenth of the world's countries a passport costs more than a tenth of the average annual income.
• Nearly a quarter of North American and European companies shortened their supply chains in 2008.
• The worldwide Internet has seen governments impose a patchwork of local restrictions on content.
• 60 years ago, two car companies accounted for half of the world's car production - - compared with six companies today.  We are hardly being taken over by a handful of giant companies.
• McDonald's serves vegetarian burgers in India and spicy ones in Mexico.
• Coca-Cola uses both sugar cane and corn syrup, depending on the location.
• MTV in Indonesia - - plenty of "A-lop-bop-a-doo-bop-a-lop-bam-boom" mixed in with five calls to prayer daily.

Globalization is a force and it will probably be a bigger force in the future. One important point - - globalization and long supply chains need a key variable.  Cheap energy.  Take away the "cheap" part, you probably take away some degree of "flatness" also.  Beware of globalization as an ideology - - ideologies never present the facts.  The facts have plenty of mountains within all the flatness.