by Adrian Pansch
Intro (4 min)
Since the birth of the World Wide Web, the economy has gone through major changes. The Internet has changed the way people do business as well as how we spend our money.
*Ask class who has purchased something online and what have they purchased
*Ask who has bought music in a store recently as opposed to downloading it online
As some of you know shopping online lets us shop from the comfort of our own homes. We can purchase clothing, electronics, plane tickets, music, and even groceries all while relaxing on our couch in our pajamas. Sometimes we are too busy to go to the store or for us living in Minnesota, snowstorms prevent us from leaving our houses. The Internet allows us to get what we need in any situation. With the Internet, we can also compare items based on consumer reviews before we purchase them. However, we were not always able to do this. With the evolution of the Internet came the evolution of how the economy is ran today.
How the World Wide Web began, Friedman’s flatteners (2 min)
Author, Thomas Friedman wrote a book called The World Is Flat, which talks about how with the help of new technology and the Internet, the world has become flat in the sense that it is a level playing field. Geographic borders no longer matter when applying for some jobs. People can send data instantly and chat face to face even with those on the other side of the world. To get an idea of how the world became flat due to new technology and how that has changed our economy I am going to give a summary of what Friedman calls in his book “The Ten Forces That Flattened the World.”
*Ask class to pay attention because they will be quizzed on the information later. Who ever can answer the questions correctly will get candy.
Flattener 1: The fall of the Berlin Wall (2 min)
- The fall of the Berlin Wall occurred on November 9, 1989.
- It liberated the people of the Soviet Empire and tipped the balance of power toward democracy and a free-market economy.
- The fight was over between communism and capitalism and capitalism won.
- It allowed the world to be viewed as a single community. There were no longer communist barriers preventing a unified global market.
- Birth of Windows
- People could create their own digital content
Flattener 2: When Netscape went public (9 min) (video alone is 7 min)
· World Wide Web
- Tim Berners-Lee
- A system for creating, organizing, and linking documents that could be shared online
· Fiber-Optic cable
- allowed the spreading of the internet
· Netscape, August 9, 1995
- First popular commercial web browser
- Made the Internet accessible to everyone in a universal format
- Dot-Come Bubble
- With the internet, companies were able to participate in ecommerce
- People wanted to get rich quick
- A look back on how the dot-com bubble was viewed during the late 1990s-early 2000’s
http://www.youtube.com/watch?v=bUwu5CiESbc
(CNN special report on dot.com bubble, 1999)
- 1999 vs. today
- In the midst of a recession it is interesting to look back on the guarantied prosperity that people in 1999 thought would be present during today’s time
*Ask students for thoughts and questions to start conversation about topic
Flattener 3: Work Flow Software (2 min)
· Allowed people to create and collaborate on business data no matter what their location,
- Global offices
· Made it easier to communicate with people all over the world about anything
· PayPal
- Allowed people to buy and sell over the internet
- Ebay
-
Flattener 4: Uploading (4 min)
· Open-source software
- Apache
· YouTube
· Blogs
- Online journalism is becoming more and more popular. Anyone can act as a reporter
- Is traditional journalism at risk?
*Ask who in the class has a blog or follows one and have them explain.
· Wikipedia
- Open for anyone to publish anything and edit any information they choose
Flattener 5: Outsourcing (8 min)
· The combination of fiber optic cable and open source software allowed jobs to be sent over to India where they could be done more efficiently and at a cheaper cost
- $50.00 a month in India = $1000.00 a month in the United States
- India = quality and quantity in its population
· Call centers, customer service support, medical transcriptions, knowledge work
· Indian call centers
- Train employees to speak with different accents
- Highly coveted jobs
- Making fun of outsourcing, The Onion
· What does this mean for people in the United States and our economy?
- More competition
- Ability to learn from others from different walks of life
- Ability to collaborate on ideas with people from the other side of the world
- Controversy, Asssociated Press Video Clip about outsourcing
· http://www.youtube.com/watch?v=H95-IS_EQlI&feature=related
Flattener 6: Offshoring (3 min)
· Moving a factory from one place (United States) to another (China) in order to lower production costs
- Cheaper production, lower taxes, lower health-care costs
- “America products 75% of what it consumers but that’s down from 90% in the mid-90s.” ~Friedman
· While the Chinese are working for American companies, they are also creating a marketplace of their own.
· Company owners are saving money by offshoring but at the same time Americans are loosing jobs. It is a controversial topic.
*Ask class about their opinions on offshoring. Is it good or bad for the economy?
Flattener 7: Supply-Chaining (3 min)
· Wal-Mart = worlds largest retailer
o Distribution center
o No middle man
o Company owned transportation
o In-house logistics
o “It cost roughly 3 percent more on average for Wal-Mart to maintain its own distribution center. But it turned out that cutting out the wholesalers and buying direct from the manufacturers saved on average 5 percent, so that allowed Wal-mart to cut costs on average 2 percent and then make it up on volume.”
~David Glass, Wal-Mart CEO 1988-2000
· RFID
o Radio frequency identification microchips
· However, there is controversy.
o Poor employee treatment
o Where can you draw the line?
Flattener 8: Insourcing (3 min)
· Delegating a job to someone within a company, as opposed to someone outside of the company (outsourcing). One reason for insourcing to occur is if a company had previously outsourced a certain task, but was no longer satisfied with the work being done on that task, so the company could therefore insource the task and assign it to someone within the company who they believe will do a better job. ~businessdictionary.com
· UPS, they don’t just deliver packages anymore
· Now they act as repairmen, merchandise inspectors, and logistic planners
· With insourcing, small companies can act big because they are able to hire UPS to do their logistics so they can focus on their main goals.
o Ex. Nike and shoe design
Flattener 9: In-Forming (4 min)
· Searching for knowledge
· Self-empowerment
o 1 Billion searches a day
*Ask students how many of them have used google today, yesterday, in the past week. What did they “google”
· Implementations for the economy
o People can compare products online before they purchase
o No need to buy certain books or magazines because information is online
o Many things that required travel can now be done at home, free of expense
o Ability to research before you invest your money
· Online groups
o Provide a forum for consumers to discuss thoughts and ideas
o Marketers can use the information they find on groups in order to better target their audience
Flattener 10: The Steroids, Digital, Mobile, Personal, and Virtual (2 min)
· Internet speed and advanced capabilities
· Instant messaging
· P2P networks
· Video conferencing
· Graphic design
· Advanced wireless technologies
All of these flatteners have contributed to the change of how we do business, how we spend our money, and how we communicate with each other. Without the help of the Internet we would not be able to do business with people in other countries and therefore our economy would be much different than it is today.
Questions, Wrap Up (5 min)
*Ask questions to students to see if they are able to remember key points of the lecture (give candy to those who answer)
- According to Friedman, what is the first even that caused the world to flatten and how did it do so?
- What was the period in time where ecommerce first became a major part of our economy?
- What are some examples of uploading?
- Why have companies began to outsource?
- How does in-formng as we talked about it in lecture affect the economy?
*Ask for any other questions or thoughts
Sources (other than videos)
Friedman, Thomas. The World is Flat: A Brief History of the Twenty-First Century. 3rd. New York: Picador, 2007.
http://www.wisegeek.com/what-was-the-dot-com-bubble.htm
http://www.itif.org/publications/internet-economy-25-years-after-com
http://www.wired.com/magazine/2010/02/10yearsafter/2/
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