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was this： 〃Rather than fixating on jobs lost to China； these countries should remember
a fact of economic life： no place can remain the world's low…cost producer
forever…even China will lose that title one day。 Instead of trying to defend low…wage
assembly jobs； Mexico and other middle…income countries should focus on creating jobs
that add higher value。 Only if more productive companies with higher…value…added
activities replace less productive ones can middle income economies continue down
the development path。〃
In short； the only way for Mexico to thrive is with a strategy of reform retail that
will enable it to beat China to the top； not the bottom； because China is not focused
on beating Mexico as much as it is on beating America。 But winning that kind of race
to the top takes intangible focus and will。
You cannot maintain rising standards of living in a flattening world
when you are up against competitors who are getting not only their fundamentals right
but also their intangibles。 China does not just want to get rich。 It wants to get
powerful。 China doesn't just want to learn how to make GM cars。 It wants to be GM
and put GM out of business。 Anyone who doubts that should spend time with young
Chinese。
Said Luis Rubio； president of Mexico's Center of Research for Development； 〃The more
self…confidence you have； the more it diminishes your mythologies and complexes。 One
of the great things about Mexico in the early 1990s was that Mexicans saw that they
could do it； they could make it。〃 A lot of that self…confidence； though； has been
lost in Mexico in recent years； because the government stopped reforming。 〃A lack
of self…confidence leads a country to keep chewing on the past；〃 added Rubio。 〃A lack
of self…confidence ＇in Mexico＇ means that everyone in the country thinks the U。S。
is going to take Mexico to the cleaners。〃 That is why NAFTA was so important for
Mexico's self…confidence。 〃What NAFTA accomplished was to get Mexicans to think
forward and outward instead of inward and backward。 ＇But＇ NAFTA was seen ＇by its
architects＇ as an end more than a beginning。 It was seen as the conclusion of a process
of political and economic reforms。〃 Unfortunately； he added； 〃Mexico did not have
a strategy for going forward。〃
Will Rogers said it a long time ago： 〃Even if you're on the right track； you'll get
run over if you just sit there。〃 The flatter the world gets； the faster that will
happen。 Mexico got itself on the right track with reform wholesale； but then； for
a lot of tangible and intangible reasons； it just sat there and reform retail stalled。
The more Mexico just sits there； the more it is going to get run over。 And it won't
be alone。
Companies and the Flat World
：：：：： TEN
How Companies Cope
Out of clutter； find simplicity。 From discord； find harmony。 In the middle of
difficulty； lies opportunity。 …Albert Einstein
As I conducted interviews for this book； I kept hearing the same phrase from different
business executives。 It was strange； they all used it； as if they had all been talking
to each other。 The phrase was； 〃Just in the last couple of years。 。 。〃 Time and again；
entrepreneurs and innovators from all different types of businesses； large and small；
told me that 〃just in the last couple of years〃 they had been able to do things they
had never dreamed possible before； or that they were being forced to do things they
had never dreamed necessary before。
I am convinced that these entrepreneurs and CEOs were responding to the triple
convergence。 Each was figuring out a strategy for his or her company to thrive or
at least survive in this new environment。 Just as individuals need a strategy for
coping with the flattening of the world； so too do companies。 My economics tutor Paul
Romer is fond of saying； 〃Everyone wants economic growth； but nobody wants change。〃
Unfortunately； you cannot have one without the other； especially when the playing
field shifts as dramatically as it has since the year 2000。 If you want to grow and
flourish in a flat world； you better learn how to change and align yourself with it。
I am not a business writer and this is not a how…to…succeed…in…business book。 What
I have learned in researching this book； though； is that the companies that have
managed to flourish today are the ones that best understand the triple convergence
and have developed their own strategies for coping with it…as opposed to trying to
resist it。
This chapter is an effort to highlight a few of their rules and strategies：
Rule #1： When the world goes flat…and you are feeling flattened… reach for a shovel
and dig inside yourself。 Don't try to build walls。
I learned this valuable lesson from my bestfriends from Minnesota； Jill and Ken Greer。
Going to India gave me an inkling that the world was flat； but only when I went back
to my roots and spoke to my friends from Minnesota did I realize just how flat。 Some
twenty…five years ago Jill and Ken （whose brother Bill I profiled earlier） started
their own multimedia company； Greer & Associates； which specialized in developing
commercials for TV and doing commercial photography for retail catalogs。 They have
built up a nice business in Minneapolis； with more than forty employees； including
graphic artists and Web designers； their own studio； and a small stable of local and
national clients。 As a midsize firm； Greer always had to hustle for work； but over
the years Ken always found a way to make a good living。
In early April 2004； Ken and Jill came to Washington to spend a weekend for my wife's
fiftieth birthday。 I could tell that Ken had a lot on his mind regarding his business。
We took a long walk one morning in rural Virginia。 I told him about the book I was
writing； and he told me about how his business was doing。 After a while； we realized
that we were both talking about the same thing： The world had grown flat； and it had
happened so fast； and had affected his business so profoundly； that he was still
wrestling with how to adjust。 It was clear to him that he was facing competition and
pricing pressure of a type and degree that he had never faced before。
〃Freelancers；〃 said Greer； speaking about these independent contractors as if they
were a plague of locusts that suddenly had descended on his business； eating
everything in sight。 〃We are now competing
against freelancers！ We never really competed against freelancers before。 Our
competition used to be firms of similar size and capability。 We used to do similar
things in somewhat different ways； and each firm was able to find a niche and make
a living。〃 Today the dynamic is totally different； he said。 〃Our competition is not
only those firms we always used to compete against。 Now we have to deal with giant
firms； who have the capability to handle small； medium； and large jobs； and also with
the solo practitioners working out of theirhome offices； who ＇by making use of today's
technology and software＇ can theoretically do the same thing that a person sitting
in our office can do。 What's the difference in output； from our clients' point of
view； between the giant company who hires a kid designer and puts him in front of
a computer； and our company that hires a kid designer and puts him in front of a
computer； and thekid designer with a computer inhis own basement？ 。 。 。 The technology
and software are so empowering that it makes us all look the same。 In the last month
we have lost three jobs to freelance solo practitioners who used to work for good
companies and have experience and then just went out on their own。 Our clients all
said the same thing to us： 'Your firm was really qualified。 John was very qualified。
John was cheaper。' We used to feel bad losing to another firm； but now we are losing
to another person！〃
How did this change happen so fast？ I asked。
A big part of their business is photography…shooting both products and models for
catalogs； Greer explained。 For twenty…five years； the way the business worked was
that Greer & Associates would get an assignment。 The client would tell Greer exactly
what sort of shot he was looking for and would 〃trust〃 the Greer team to come up with
the right image。 Like all commercial photographers； Greer would use a Polaroid camera
to take a picture of the model or product he was shooting； to see if his creative
instinct was right； and then shoot with real film。 Once the pictures were taken； Greer
would send the film out to aphoto lab to be developed and color…separated。 If a picture
needed to be touched up； it would be sent to another lab that specialized in
retouching。〃Twenty years ago； we decided we would not process the film we shot；〃 Greer
explained。 〃We would leave that technical aspect to other professionals who had the
exact technology； training； and expertise…and
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a desire to make money that way。 We wanted to make money by taking the pictures。 It
was a good plan then； and may be a good plan today； but it is no longer possible。〃
Why？ The world went flat； and every analog process went digital； virtual； mobile；
and personal。 In the last