The World Goes Extra Flat
Internet Interview with Business Tycoon and Magnate Mouli Cohen on the "Impact of the New Global Economy."
We recently caught up with Mouli for a broadcast, internet interview in which he talked about the long-term impact of globalization and the challenges he foresees in the New Global Economy. What follows is a transcript of that interview.
Mouli, in your articles and speeches you talk about how the world has become small again. Can you explain what you mean by this?
Cohen: Last year I was visiting several sites in Africa for my philanthropic endeavors and I was able to walk freely through these remote villages while browsing the Web with my Blackberry. I was in the middle of nowhere and yet I had the entire world of Google in my hand. And then it hit me, the world has become microscopic. Technology has enabled us to work and collaborate with one another without regard to geography or distance, and in some cases even language. It has made it possible for workers in China and India to compete directly with the American work force. Talent can now be exported from anywhere in the world.
Is the Internet the main reason for all of these changes in globalization?
Cohen: The world experienced a major change in 1492 with the discovery of the Americas. At that moment the world transformed from large to size medium. With the introduction centuries later of multinational firms the world went from size medium to size small. The next significant change occurred around the year 2000 when the Internet matured and became accessible to people of all ages and walks of life. The world is now definitively tiny. The Internet of today not only allows people to communicate effortlessly but it also serves to tie together very sophisticated supply chain economics on a global scale.
Why are supply chains important?
They make the world microscopic and they level out the playing field. Take for an example a company like Fedex. They have to create systems with custom offices around the world. They have to design supply chain algorithms so that when you take a box to the Fedex store, it gets from the store to its hub and then out to its final destination. At every point they are taking fat out of the system. Big companies like Walmart have the same or similar systems which help dramatically increase their global business efficiencies. Twenty years ago companies could not operate on this scale.
Are you optimistic about the future of countries like China and India?
Cohen: These two countries have a huge pool of talent that can be exported to anywhere in the world. Their respective economies will continue growing by leaps and bounds over the next decade.
I firmly believe that the next great breakthrough in bioscience could come from a 16-year-old who downloads the human genome in Malaysia. Bill Gates has a great line: He says, 20 years ago, would you rather have been a B-student in Poughkeepsie or a genius in Shanghai? Twenty years ago you'd rather be a B-student in Poughkeepsie. Today? The genius in Shanghai can export his/her talent anywhere. The genius in Shanghai will change the world.
Are you concerned about the economic impact this will have on the United States?
Cohen: Absolutely. I love my country and I am very concerned about it. We are not openly acknowledging that there is a problem. That is the first step. The next step is to take responsibility for ourselves and take action. If we don't do something about this our children will face intense competition and then we will have a real crisis on our hands.
You quoted a CEO who says that Americans have grown addicted to their high salaries, and now they're going to have to earn them. Are Americans suffering from an undue sense of entitlement?
Cohen: Yes, we really need to get rid of the entitlement. It won't hold up in this new world.
What advice would you give to our children?
Cohen: I would explain to them that although these countries are still poor they have billions of future workers who will do the same job for less money. Our children need to be the best in their respective fields and they need to innovate more than ever before. Innovation and thought leadership are key. If we cannot compete on a pure "labor level" (and we cannot, I assure you) then we need to be the leading thinkers, philosophers and inventors. This is the only way we can continue to prosper and lead the world in this new economy.
The 10 Great Levelers that Made the World Flat
- Fall of the Berlin Wall
The events of November 9, 1989, tilted the worldwide balance of power toward democracies and free markets.
- Netscape IPO
The August 9, 1995, offering sparked massive investment in fiber-optic cables.
- Work flow software
The rise of apps from PayPal to VPNs enabled faster, closer coordination among far-flung employees.
- Open-sourcing
Self-organizing communities, à la Linux, launched a collaborative revolution.
- Outsourcing
Migrating business functions to India saved money and a third world economy.
- Off-shoring
Contract manufacturing elevated China to economic prominence.
- Supply-chaining
Robust networks of suppliers, retailers, and customers increased business efficiency. See Wal-Mart.
- In-sourcing
Logistics giants took control of customer supply chains, helping mom-and-pop shops go global. See UPS and FedEx.
- In-forming
Power searching allowed everyone to use the Internet as a "personal supply chain of knowledge." See Google.
- Wireless
Like "steroids," wireless technologies pumped up collaboration, making it mobile and personal. The presence of 3G wireless networks mean that from our mobile phones we hold the knowledge and power of the internet in our hands. And it's only going to improve over the next few years to come.
About Mouli Cohen
In his career as an entrepreneur, Mouli has been one of the few to have success in biotechnology and high technology. His start-ups have generated well over $1B in shareholder value. In recognition of his ability to generate mega investment in the U.S. economy and the creation of thousands of U.S. jobs, Mouli was awarded the first-ever "Millionaire Residency" with full citizenship status by President George H. Bush. For press inquiries and more information please visit www.moulicohen.com or contact the Press Agent at 415-902-2802.
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