Business Without Borders

To compete, agencies must collaborate all over the map.

More than a year and a half after its publication, New York Times columnist Tom Friedman's book, The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux), remains a best seller. It has become required reading in both the business and political worlds. His basic premise-that the United States now is playing on a level, worldwide economic competitive field with China, India and other nations-has become accepted wisdom.

Friedman describes three primary changes at the dawn of the 21st century as the keys to the changing world. One is the addition of China, India, the former Soviet Union and other countries with a combined population of 3 billion to the global world economy. The second is technological changes such as the Internet that have made distance less of a factor. And the third is the shift from hierarchical, vertical power structures in business and government to democratic, diffuse ones in which it is easier for individuals to make their own destinies. "It is this triple convergence-of new players, on a new playing field, developing new processes and habits for horizontal collaboration-that I believe is the most important force shaping global economies and politics in the early 21st century," Friedman wrote.

He devoted a portion of his book to the question of American competitiveness. Echoing themes that arose in previous times when America faced new competition from Germany, Japan and elsewhere, he urged policymakers to strengthen education. Indeed, in part because of Friedman's book, President Bush last year announced his American Competitiveness Initiative. It pushes for better science, math and engineering education, a larger federal investment in basic scientific research, and incentives such as tax credits to encourage private firms to invest in research and development. Members of Congress from both parties have been supportive of the initiative, although progress has been slow because of the failure to pass most spending bills for this fiscal year.

America's imperative to be competitive with new players in the global economy is only part of Friedman's vision. He also makes clear the growing integration and interdependence of the countries that now make up the "flat world." As both competition and integration increase, federal agencies' missions surely will be affected. Growing international travel will affect the Federal Aviation Administration, the Homeland Security Department and the State Department. As labor markets become more integrated, the Labor Department and the immigration bureaucracy will have to react. Law enforcement will have to become increasingly international.

One of the initial steps federal managers can take to respond to the flattening world is to reach out to their international counterparts. Building such relationships can help leaders see ways to work together-as well as get ideas of how other countries' systems could affect ours. According to Friedman's thesis, the world is becoming more networked. Federal leaders either can be part of that by connecting with leaders elsewhere in the world, or they can be left out.

It's also helpful to recognize how the forces that are causing the world to flatten change the way organizations do business. For example, Friedman encourages big companies to act small by using new technologies to shift power to customers and allowing them "to serve themselves in their own way, at their own pace, in their own time, according to their own tastes." His advice applies to the federal government as well. In a flattening world, agencies must act small, and they must collaborate more with the outside world or find themselves unable to meet taxpayers' needs or maintain their relevance in the 21st century.

Brian Friel covered management and human resources at Government Executive for six years and is now a National Journal staff correspondent.