TEXT 2. THREE ERAS OF GLOBALIZATION

There have been three great eras of globalization. The first lasted from 1492 - when Columbus set sail, opening trade between the Old World and the New World – until around 1800. I would call this era Globalization 1.0. It shrank the world from a size large to a size medium. Globalization 1.0 was about countries and muscles. That is, in Globalization 1.0, the key agent of change, the dynamic force driving the process of global integration, was how much brawn - how much muscle, how much horsepower, wind power, or, later, steam power- your country had and how creatively you could deploy it. In this era, countries and governments (often inspired by religion or imperialism or a combination of both) led the way in breaking down walls and knitting the world together, driving global integration. In Globalization 1.0, the primary questions were: Where does my country fit into global competition and opportunities? How can I go global and collaborate with others through my country?

The second great era, Globalization 2.0, lasted roughly from 1800 to 2000, interrupted by the Great Depression and World Wars I and II. This era shrank the world from a size medium to a size small. In Globalization 2.0, the key agent of change, the dynamic force driving global integration, was multinational companies. These multinationals went global for markets and labor, spearheaded first by the expansion of the Dutch and English joint-stock companies and the Industrial Revolution. In the first half of this era, global integration was powered by falling transportation costs, thanks to the steam engine and the railroad, and in the second half by falling telecommunication costs – thanks to the diffusion of the telegraph, telephones, the PC, satellites, fiber-optic cable and the early version of the World Wide Web. It was during this era that we really saw the birth and maturation of a global economy, in the sense that there was enough movement of goods and information from continent to continent for there to be a global market, with global arbitrage in products and labor.

Right around the year 2000 we entered a whole new era: Globalization 3.0. Globalization 3.0 is shrinking the world from a size small to a size tiny and flattening the playing field at the same time. And while the dy­namic force of Globalization 1.0 was countries globalizing and the dynamic force in Globalization 2.0 was companies globalizing, the dynamic force in Globalization 3.0 is the newfound power for individuals to collaborate and compete globally. And the phenomenon that is enabling, empowering individuals and small groups to go global so easily and so smoothly is what I call the flat-world platform. Just a hint: The flat-world platform is the product of a convergence of the personal computer (which allowed every individual suddenly to become the author of his or her own content in digital form) with fiber-optic cable (which suddenly allowed all those individuals to access more and more digital content around the world for next to nothing) with the rise of work flow software.