The World is Clustered

I noticed that my husband Bill (a geologist) was reading The World is Flat. I asked him to share his impressions of the book. Here is his review and commentary. He will monitor comments in case you want to respond or ask a question. Bill also asked that I include this picture that he took of a road worker cooking tar in India.

The World is Clustered

My interest in Thomas Friedman's bestselling book The World is Flat was piqued in late September when I bought an issue of The Atlantic to read on the last leg of a long trip from New Delhi back home to Seattle. In that issue was a short article by Richard Florida titled "The World is Spiky". Florida worked with geographer Tim Gulden to produce a series of three dimensional maps showing a version of the economic topography of the world that is very different from the flat plains that Friedman sees through his window. You can download a pdf reprint of Florida's article from his web site and order a copy of Friedman's book from Amazon.

Friedman argues that a series of events have converged to flatten the world to a degree that geography is no longer a barrier to global commerce. The widespread availability of inexpensive computers, standardized file formats and transfer protocols, excess international fiber optic cable capacity, outsourcing, and a handful of other trends have, according to Friedman, greatly leveled the international playing field. Moreover, the dominant forces in this new flat world will be not nations or corporations, but individuals with good ideas and access to capital. According to Friedman and many others, this will be mostly good in the long run as long as we play the game wisely.

I think that Friedman is partly correct. Developments in the past decade have made global collaboration easier and quicker than anyone might have imagined, and the information flows in both directions. He writes about radiologists in India interpreting x-rays sent from the United States. The time difference between India and the United States is about twelve hours, so this is especially useful for small hospitals that may not have a specialist on duty at 3:00 am. They can electronically transmit images to India, where it is mid-day, to be read by qualified physicians. Last year I worked with a colleague in San Francisco to map landslides in the jungle of Papua New Guinea using airborne laser scanner data processed in Australia and downloaded to my office in Seattle via the internet. The project did involve a short trip to the jungle, but it was completed far more quickly, accurately, and cost-effectively than it would have been ten years ago. In that respect, the barriers can be low for those who have good internet connections.

Repetitive tasks like transcribing medical records, sewing overpriced basketball shoes, or telling a customer that the computer will not allow an order to be changed can be done just as well by people making a few dollars a day as those making a few dollars an hour. It doesn't really matter whether some things are done in India or Indiana, so they will be done where the costs are lower and enough moderately skilled workers are available. Witness the bankruptcy of Delphi, the American auto parts manufacturer, that says it cannot compete when it has to pay an average of $60 per hour in salary and benefits to factory workers. Taking that into account, there may be fewer barriers than many people would like.

Other jobs that require highly specialized training or skills will gravitate towards countries, regions, or cities where-- by virtue of either education or immigration-- the highly trained and skilled specialists live. Right now that means places desirable regions within the United States, Japan, and Western Europe. In a generation it might be India, China, or Eastern Europe.

Friedman realizes that one of the keys is education. In particular, highly technical scientific and engineering education that drives innovation but is waning in the United States. Another key is motivation or lack thereof. Friedman calls this the quiet crisis. Developed countries like the United States will continue to prosper as long as they emphasize innovative services or products that cannot be easily duplicated. If they stop, the only way to go is down. The difficult task for developed countries will be to retrain their current workforces and produce new generations of highly educated and motivated workers who can do that kind of unique work. Friedman is also very perceptive when he notes that the undeveloped countries in the best position to succeed are those without a wealth of natural resources, for example China and India. Lacking ore to mine, oil to pump, or trees to cut down, those countries will have to rely on the talents of their people. Undeveloped countries that aspire to grow by selling natural resources rather than human resources will languish. This echoes the conclusions of Roldan Muradian and Joan Martinez-Alier in their policy paper Globalization and Poverty: An Ecological Perspective, published in 2001 by the Heinrich Boll Foundation. The political slant of the paper is Green, but it is worth reading.

The maps produced by Gulden and Florida seem to contradict Friedman's notion that the world is flat. They show that world population has one distribution, whereas economic activity, the number of patents issued, and the locations of the world's most prolific scientists follow strikingly different distributions. They are all spiky, to be sure, but many of the spikes are in different places. Florida also argues that economic progress requires the peaks to grow taller, which will create increasing disparities between the economic mountains and plains.

So, is the world flat or not? Towards the end of his book, Friedman admits that it really isn't and he devotes the last chapters to a discussion of this. He maintains that the world has been shrinking and flattening, and believes that the rate has increased in recent years. Florida's maps show the world as it is, but they are neither spiky nor flat. They are both.

The striking thing about Florida's maps is that the spikes are clustered. There are regions full of one kind of spikes or another, and broad regions that are flat and low. For example, all of Africa, much of South America, and Siberia are very low when it comes to measures of economic productivity or potential. Siberia is cold and nobody wants to live there, so it also has a small population. That doesn't present a problem. The problem is the existence of areas that are heavily populated but have virtually no economic productivity, for example Central America, Africa, and South America: the Third World. Friedman writes at length about the significant barriers to progress in those areas. Florida writes that economic progress will require the spikes to grow taller, and that one of the great political challenges will be to raise the valleys to the level of the peaks. The problem is, that's the wrong metaphor.

I am a scientist, so it is second nature for me to envision processes in terms of differential equations. You may think it strange, but it works for me. I look at Florida's maps showing peaks of prosperity and progress, and imagine the diffusion of attributes such as economic prosperity or capital from the peaks to the surrounding lowlands. Economists, for example, talk about capital going to areas where it is in short supply in order to produce greater returns. So, assume for the sake of discussion that the flow of economic prosperity follows the diffusion equation.

Here is what I think: First, diffusion from a point falls off exponentially with distance. Therefore, the beneficial effects of a single center of prosperity will be fairly localized. The effects may spread to neighboring cities or permeate a small region, for example Silicon Valley, but they will not lift an entire state or country (Lichtenstein and Monte Carlo excepted). The only way to increase the general level of whatever is being measured is to have many local, not distant, sources. Areas such as sub-Saharan Africa may see an occasional trickle in the form of larger CARE packages or a grant from the Gates Foundation, but that will not do anything to raise the general level of prosperity. It must be raised by local infusions of time, energy, intelligence, or capital.

Second, it takes a tremendous amount of new production-- whether it is capital, natural resources, or innovative ideas-- to sustain the peaks. Whatever is diffusing must be constant resupplied in order for the peaks to remain high. Ideas may be boundless, but resources such as oil, coal, or iron are less so. Some geologists maintain that those resources are finite, but in reality they are only partly finite because improved technology and increased prices can always increase the supply. Thus, it is relatively easy for a peak to shrink and vanish unless it is constantly maintained, and the cost of doing so will likely increase over time. The disappearance of a peak does not mean that the prosperity is distributed elsewhere. It is more likely that it will just disappear, for example capital lost on a company that burns a lot of fuel but never produces a profit. Ironically, shrinking of peaks is about the only way that the world will become truly flat. I don't think that Friedman had that kind of economically flat post-apocalyptic wasteland in mind when he wrote his book.

Third, it will be extremely difficult to raise the level of economic productivity in the areas between the peaks to the same level. The more likely outcome is that there will be clusters of peaks and high valleys separated by broad lowlands, like jagged mountain ranges separated by broad low-lying plains and swamps. The mountains will have great views, thin air, and landslides; the lowlands will have floods and malaria; and everyone will have earthquakes.