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

2. Overview Thesis Globalization
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

3. 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)

4. Globalization Characteristics: Own dominant Culture People Movement
Structure & Power

5. 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

6. 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.”

7. People Movement Demographic Pattern
People moved from agriculture and rural areas to urban areas with urban lifestyles

8. Structure & Power Old System Globalization
Nation-states dominated and balanced each other from within
Globalization
Between nation-states
Nation-states & global markets
Nation-states & individuals

9. Structure & Power Between nation-states Nation-states & global markets
USA sole superpower
Nation-states & global markets
Global investors & finance markets
Nation-states & individuals
Terrorists

10. Information 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

11. Information Arbitrage
Six areas of knowledge
Politics
Culture
National Security
Finance
Technology
Environment

12. The Lexus & 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

13. Lexus vs. Olive Tree Cold War Globalization Olive tree vs. Olive tree
Norway vs. European Union
St. Pierre-de-Trivisy vs. Coca-Cola
India tests nuclear weapons

14. …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

15. The way we communicate The Democratization of Technology
Computerization
Telecommunication
Miniaturization
Compression
Digitization

16. The way we invest The Democratization of Finance Commercial Paper
Junk Bonds
Secruitization
Online Trading

17. The way we learn The Democratization of Information Cable Television
Compression
Internet

18. Microchip Immune Deficiency
MIDSyndrome
Countries or companies who fail to take steps to keep up in the global economy

19. 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

20. 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

21. 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.