The Lexus and the Olive Tree Book by Thomas L. Friedman Report by Baron Stout Understanding Globalization

the lexus and the olive tree Overview  Thesis  Explain how a new generation of globalization became dominant and how it effects everything  Globalization  The inexorable integration of markets, nation-states, and technologies  Based on free market Capitalism

the lexus and the olive tree Two Times of Globalization  End of World War I until 1989  Cold War Period  USA vs. USSR  1989 to present  Since the fall of the Berlin Wall (Communism)

the lexus and the olive tree Globalization  Characteristics:  Own dominant Culture  People Movement  Structure & Power

the lexus and the olive tree Comparing the Cultures Cold War (Old) Division – The Wall Frozen Regional homogenization Weapons Einstein Friends and Enemies Globalization (New) Integration – The Web Dynamic & Growing “Americanization” Bandwidth Moore’s Law Competitors

the lexus and the olive tree Comparing the Cultures  Jacob Frenkel: “Before…we started by looking at the local markets, local financial systems and the interrelationship between them, and then, as an afterthought, we looked at the international economy…Now we reverse the perspective. Let’s not ask what markets we should export to, after having decided what to produce; rather let’s first study the global framework within which we operate and then decide what to produce.”

the lexus and the olive tree People Movement  Demographic Pattern  People moved from agriculture and rural areas to urban areas with urban lifestyles

the lexus and the olive tree Structure & Power  Old System  Nation-states dominated and balanced each other from within  Globalization  Between nation-states  Nation-states & global markets  Nation-states & individuals

the lexus and the olive tree Structure & Power  Between nation-states  USA sole superpower  Nation-states & global markets  Global investors & finance markets  Nation-states & individuals  Terrorists

the lexus and the olive tree Information Arbitrage  Arbitrage…  Having a lot information, from many different sources, and then knowing how to sort it out  …in Globalization  Knowing as much about the complete makeup of a country and how each one depends on the others

the lexus and the olive tree Information Arbitrage  Six areas of knowledge  Politics  Culture  National Security  Finance  Technology  Environment

the lexus and the olive tree The Lexus & the Olive Tree  The Olive Tree  All that is old and traditional  What roots us to a place, culture or family  The Lexus  All that is new and innovative  Drive for sustenance and improvement  Global markets

the lexus and the olive tree Lexus vs. Olive Tree  Cold War  Olive tree vs. Olive tree  Globalization  Norway vs. European Union  St. Pierre-de-Trivisy vs. Coca-Cola  India tests nuclear weapons

the lexus and the olive tree …And the Walls Came Tumbling Down  Changes from Cold War system to Globalization  The way we communicate  The way we invest  The way we learn about the world

the lexus and the olive tree The way we communicate  The Democratization of Technology  Computerization  Telecommunication  Miniaturization  Compression  Digitization

the lexus and the olive tree The way we invest  The Democratization of Finance  Commercial Paper  Junk Bonds  Secruitization  Online Trading

the lexus and the olive tree The way we learn  The Democratization of Information  Cable Television  Compression  Internet

the lexus and the olive tree Microchip Immune Deficiency  MIDSyndrome  Countries or companies who fail to take steps to keep up in the global economy

the lexus and the olive tree MIDS  Stage 1: Pre-microchip (WWI – 1980’s)  Less efficient work  Top down management style  Stage 2: Information Revolution (1980’s – late 1990’s)  Lower barriers of entry  Increased competition & speed  More customer feedback

the lexus and the olive tree MIDS  Stage 3: Present and near future  Companies and Countries restructuring to take advantage of global situation  Democratization of decision-making  Decentralization of power and information

the lexus and the olive tree Conclusion  Globalization revolves around embracing and exploiting the Internet and E- business.  Keeping up with, or ahead of, technological advances of others will make or break a country or company.  Remember your Olive Tree’s and buy a Lexus.