7 August 2014
In a flat world, there's no place like home
The Australian's social affairs editor Bernard Salt writes about the trend towards 're-shoring' by which global manufacturers are abandoning China in favour of the US. Will Australia get a piece of the aciton?
In April 2005, The New York Times journalist Thomas Friedman published a book that seemed to encapsulate the prevailing economic zeitgeist of the 21st century. The World is Flat documented the levelling out of economic opportunity between the developed and the developing world.
Friedman argued that the fall of the Berlin Wall in 1989, followed by the opening up of China in the 1990s as well as the phenomenon of the internet all contributed to the globalisation of the labour market. New technologies and new work practices such as offshoring and new activities such as call centres drained low-skilled work to hi-tech workplaces in China, India and elsewhere. In one fell swoop Friedman explained the demise of Detroit and, by extension, the inevitable diminution of the manufacturing industry in Australia in a single 600-page book.
“The world is flat” is a metaphor for a level playing field, which means American workers and Australian workers must now compete for work with low-paid workers in the developing world.