The World is Not Flat

According to the Guardian, UK retail bank Lloyds TSB is closing Indian call centre operations:

The bank will even allow its 13.5 million current account customers to ring their local branches instead of a call centre in India which unions claim is unpopular.

Why am I not surprised at this news?  Low-touch banking is fine for call-centres, but nothing more complicated.  Maybe HSBC might follow suit. 

At Foreign Policy this month, Harvard B School professor Pankaj Ghemawat writes, contra Tom Friedman,

Globalization has bound people, countries, and markets closer than ever, rendering national borders relics of a bygone era—or so we’re told. But a close look at the data reveals a world that’s just a fraction as integrated as the one we thought we knew. In fact, more than 90 percent of all phone calls, Web traffic, and investment is local. What’s more, even this small level of globalization could still slip away.

I read Friedman's The World is Flat while in Israel early this year.  Like Ireland, it's a small, globalised country, with its own diaspora of perhaps a million people, a vibrant high-tech economy and a huge amount of cultural interchange.  Still, the state is extremely important, both for facing the security challenges and in anchoring the identity of a country that is culturally very different from the UK or America, never mind its Arab neighbours. 

Comments

[scottie]

www.mkpress.com/flat

[Peter Nolan]

Nah, Friedman has other problems with his methodology, but there's no evidence for a race to the bottom, certainly in the environmental arena. The environmental Kuznets curve, showing an inverse-U relationship between GDP per head and pollution still holds and has been shifting downwards, with less pollution at each income level, over time.