The World Is Flat (53 page)

“We decided we would leverage our connections in North America to try to bridge the gap and create some income-generating opportunities for people,” Hockenstein said. That summer, after another trip funded by themselves, Hockenstein and his colleagues opened Digital Divide Data, with a plan to start a small operation in Phnom Penh that would do data entry-hiring locals to type into computers printed materials that companies in the United States wanted in digitized form, so that it could be stored on databases and retrieved and searched on computers. The material would be scanned in the United States and the files transmitted over the Internet. Their first move was to hire two local Cambodian managers. Hockenstein's partner from McKinsey, Jaeson Rosenfeld, went to New Delhi and knocked on the doors of Indian data-entry companies to see if he could find one -just one-that would take on his two Cambodian managers as trainees. Nine of the Indian companies slammed their doors. The last thing they wanted was even lower-cost competition emerging in Cambodia. But a generous Hindu soul agreed, and Hockenstein got his managers trained. They then hired their first twenty data-entry operators, many of whom were Cambodian war refugees, and bought twenty computers and an Internet line that cost them $100 a month. The project was financed with $25,000 of their own money and a $25,000 grant from a Silicon Valley foundation. They opened for business in July 2001, and their first work assignment was for the Harvard Crimson, Harvard's undergraduate daily newspaper.

“The Crimson was digitizing their archives to make them available online, and because we were Harvard grads they threw some business our way,” said Hockenstein. “So our first project was having Cambodians typing news articles from the Harvard Crimson from 1873 to 1899, which reported on Harvard-Yale crew races. Later, actually, when we got to the years 1969 to 1971, when the turmoil in Cambodia was all happening, they were typing [Crimson stories] about their own story... We would convert the old Crimsons, which were on microfilm, to digital images in the United States through a company in Oklahoma that specialized in that sort of thing, and then we would just transfer the digital images to Cambodia by FTP [file transfer protocol]. Now you can go to thecrimson.com and download these stories.” The Cambodian typists did not have to know English, only how to type English characters; they worked in pairs, each typing the same article, and then the computer program compared their work to make sure that there were no errors.

Hockenstein said that each of the typists works six hours a day, six days a week, and is paid $75 a month, twice the minimum wage in Cambodia, where the average annual income is less than $400. In addition, each typist receives a matching scholarship for the rest of the workday to go to school, which for most means completing high school but for some has meant going to college. “Our goal was to break the vicious cycle there of [young people] having to drop out of school to support families,” said Hockenstein. “We have tried to pioneer socially responsible outsourcing. The U.S. companies working with us are not just saving money they can invest somewhere else. They are actually creating better lives for some of the poor citizens of the world.”

Four years after starting up, Digital Divide Data now has 170 employees in three offices: Phnom Penh; Battambang, the second-largest city in Cambodia; and a new office in Vientiane, Laos. “We recruited our first two managers in Phnom Penh and sent them to India to get trained in data entry, and then, when we opened the Laos office, we recruited two managers who were trained by our staff in the Phnom Penh office,” Hockenstein said.

This tree has scattered all kinds of seeds. Besides the Harvard Crimson, one of the biggest sources of data-entry work was NGOs, which wanted the results of their surveys about health or families or labor conditions digitized. So some of the first wave of Digital Divide Data's Cambodian workers left the company and spun off their own firm to design databases for NGOs that want to do surveys! Why? Because while they were working for Digital Divide Data, said Hockenstein, they kept getting survey work from NGOs that needed to be digitized, but because the NGOs had not done enough work in advance to standardize all the data they were collecting, it was very hard to digitize in any efficient manner. So these Cambodian workers realized that there was value earlier in the supply chain and that they could get paid more for it-not for typing but for designing standardized formats for NGOs to collect survey data, which would make the surveys easier and cheaper to digitize, collate, and manipulate. So they started their own company to do just that-out of Cambodia.

Hockenstein argued that none of the jobs being done in Cambodia came from the United States. This sort of basic data-entry work got outsourced to India and the Caribbean a long time ago, and, if anywhere, that is where the jobs were taken from. But none of this would have been possible to set up in Cambodia a decade ago. It all came together in just the last few years.

“My partner is a Cambodian,” said Hockenstein. “His name is Sophary, and until 1992 he was living in a refugee camp on the Cambodia-Thai border while I was living in Harvard Square as an un-dergrad. We were worlds apart. After the UN peace treaty [in Cambodia], he walked home ten days to his village, and now today he lives in Phnom Penh running Digital Divide Data's office.” They now instant-message each other each night to collaborate in the delivery of services to people and companies around the world. The type of collaboration that is possible today “allows us to be partners and equals,” said Hockenstein. “It is not one of us dominating the other; it is real collaboration that is creating better futures for the people at the bottom and the top. It is making my life more meaningful and creating concrete opportunities for people living on a dollar or two a day... We see the self-respect and confidence that blossoms in people who never before would have had an on-ramp into the global economy.”

So Hockenstein and his partners are getting calls now from Mongolia, Pakistan, Iran, and Jordan from people who want to provide IT services to the world and are wondering how they can get started. In mid-2004, a client approached Digital Divide Data to digitize an English-Arabic dictionary. Around the same time, Hockenstein's office received an unsolicited e-mail from a company in Iran that was running a data-entry firm there. “They found us through a Google search in trying to find ways of expanding their local data-entry business beyond the borders of Iran,” said Hockenstein. So Hockenstein asked the Iranians whether they could do an English-Arabic dictionary, even though the language of Iran is Farsi, which uses some but not all of the same letters as Arabic. “He said they could,” said Hockenstein, “so we partnered on a joint project for this client to digitize an Arabic dictionary.” What I like most about the story, and why it is so telling of the flat world, is Hockenstein's kicker: “I still have never met the guy [in Iran]. We did the whole deal over Yahoo! instant messenger and e-mail. We wired him the money through Cambodia... I invited him to my wedding, but he wasn't able to come.”

To build may have to be the slow and laborious task of years. To destroy can be the thoughtless act of a single day.

—Sir Winston Churchill

On a trip back home to Minnesota in the winter of 2004, I was having lunch with my friends Ken and Jill Greer at Perkins pancake house when Jill mentioned that the state had recently passed a new gun law. The conceal and carry law, passed on May 28, 2003, established that local sheriffs had to issue permits for anyone-other than those with felony records or declared mentally ill-who requested to carry concealed firearms to work (unless the person's employer explicitly restricted that right). This law is supposed to deter criminals, because if they try to hold you up, they can't be sure that you too are not packing a weapon. The law, though, contained a provision to allow business owners to prevent nonemployees from bringing concealed weapons into a place of business, like a restaurant or health club. It said that any business could ban concealed handguns on its premises if it posted a sign at each entrance indicating that guns were not allowed there. (This reportedly led to some very creative signage, with one church suing the state for the right to use a biblical quote as its gun-banning sign and a restaurant using a picture of a woman in a cooking apron toting a machine gun.) The reason this all came up at our lunch was that Jill mentioned that at health clubs around the city, where she played tennis, she noticed two signs now popping up regularly, one right after the other. At their tennis club in Bloomington, for example, there is a sign right by the front door that says, “No Guns Allowed.” And then nearby, outside the locker rooms, is another sign: “No Cell Phones Allowed.”

Hmrara. No guns or cell phones allowed? Guns I understand, I said, but why cell phones?

Silly me. It was because some people were bringing cell phones with cameras into locker rooms, covertly taking pictures of naked men and women and then e-mailing them around the world. What will they think of next? Whatever the innovation, people will find a way to use it and abuse it.

While interviewing Promod Haque at Norwest Venture Partners in Palo Alto, I was helped by the firm's public relations director, Katie Belding, who later sent me this e-mail: “I was chatting with my husband about your meeting with Promod the other day... He is a history teacher at a high school in San Mateo. I asked him, 'Where were you when the world went flat?' He said it just happened the other day at school when he was in a faculty meeting. A student was suspended for helping another student cheat on a test-we're not talking the traditional writing answers on the bottom of your shoe or passing a note, though...” Intrigued, I called her husband, Brian, and he picked up the story: “At the end of the period, when all of the tests were being passed up to the front of the classroom, this student very quickly and slyly pulled out his cell phone and somehow snapped a picture of some test questions, and instantly e-mailed it to his friend who was taking the same test the next period. His friend also had a cell phone with a digital camera and e-mail capabilities and was apparently able to view the questions before the next period. The student was caught by another teacher when he pulled out the cell phone between periods. It is against the rules to have a cell phone on campus-even though we know that all the kids do-so the teacher confiscated it and saw that the kid had a test on it. So the dean of discipline, at our regular faculty meeting, opened by saying, 'We have something new to worry about.' Essentially he said, 'Beware, keep your eyes open, because the kids are so far ahead of us in terms of the technology.'”

But things aren't all bad with this new technology, noted Brian: “I went to a Jimmy Buffett concert earlier this year. Cameras were not allowed, but cell phones were. So then the concert starts and everyone suddenly starts holding up their cell phones and taking pictures of Jimmy Buffett. I've got one right on my wall. We were sitting in the second row and the guy next to us held up his cell phone, and I said, 'Hey, would you mind e-mailing me some of those? No one will believe we sat this close.' He said 'Sure,' and we gave him a card with our e-mail [address]. We didn't really expect to see any, but the next day he e-mailed us a bunch.”

My trip to Beijing described earlier fell right after the fifteenth anniversary of the Tiananmen Square massacre, which happened on June 4, 1989, that is, 6/4/89. My colleagues at the Times bureau informed me that on that day the Chinese government censors were blocking SMS messages on cell phones that contained any reference to Tiananmen Square or even the numbers 6 and 4. So if you happened to be dialing the phone number 664-6464, or sending a message in which you told someone you would meet at 6 p.m. on the 4
^th
floor, the Chinese censors blocked it using their jamming technology.

Mark Steyn, writing in the National Review (October 25, 2004), related a story from the London Arabic newspaper paper Al-Quds al-Arabi about a panic that broke out in Khartoum, Sudan, after a crazy rumor swept the city, claiming that if an infidel shook a man's hand, that man could lose his manhood. “What struck me about the story,” wrote Steyn, “was a detail: The hysteria was spread by cell phones and text messaging. Think about that: You can own a cell phone yet still believe a foreigner's handshake can melt away your penis. What happens when that kind of technologically advanced primitivism advances beyond text messaging?”

This is not a chapter about cell phones, so why do I raise these stories? Because ever since I began writing about globalization, I've been challenged by critics along one particular line: “Isn't there a certain technological determinism to your argument? To listen to you, Friedman, there are these ten flatteners, they are converging and flattening the earth, and there is nothing that people can do but bow to them and join the parade. And after a transition, everyone will get richer and smarter and it will all be fine. But you're wrong, because the history of the world suggests that ideological alternatives, and power alternatives, have always arisen to any system, and globalization will be no different.”

This is a legitimate question, so let me try to answer it directly: I am a technological determinist! Guilty as charged.

I believe that capabilities create intentions. If we create an Internet where people can open an online store and have global suppliers, global customers, and global competitors, they will open that online store or bank or bookshop. If we create work flow platforms that allow companies to disaggregate any job and source it to the knowledge center anywhere in the world that can perform that task most efficiently at the lowest cost, companies will do that sort of outsourcing. If we create cell phones with cameras in them, people will use them for all sorts of tasks, from cheating on tests to calling Grandma in her nursing home on her ninetieth birthday from the top of a mountain in New Zealand. The history of economic development teaches this over and over: If you can do it, you must do it, otherwise your competitors will-and as this book has tried to demonstrate, there is a whole new universe of things that companies, countries, and individuals can and must do to thrive in a flat world.