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in Poughkeepsie; you would take Poughkeepsie; because your chances of thriving and 
living a decent life there; even with average talent; were much greater。 But as the 
world has gone flat; Gates said; and so manypeople can now plug and play from anywhere; 
natural talent has started to trump geography。 
〃Now;〃 he said; 〃I would rather be a genius born in China than an average guy born 
in Poughkeepsie。〃 
That's what happens when the Berlin Wall turns into the Berlin mall and 3 billion 
people converge with all these new tools for collaboration。 〃We're going to tap into 
the energy and talent of five times as many people as we did before;〃 said Gates。 
From Russia with Love 
I didn't get a chance to visit Russia and interview Russian zippies for this book; 
but I did the next best thing。 I asked my friend Thomas R。 Pickering; the former U。S。 
ambassador to Moscow and now a top international relations executive with Boeing; 
to explain a new development 
195 
I had heard about: that Boeing was using Russian engineers and scientists; who once 
worked on MiGs; to help design its next generation of passenger planes。 
Pickering unraveled the story for me。 Beginning in 1991; Boeing started assigning 
out work to Russian scientists to take advantage of their expertise in aerodynamic 


problems and new aviation alloys。 In 1998; Boeing decided to take this a step further 
and open an aeronautical engineering design office in Moscow。 Boeing located the 
office in the twelve…story Moscow tower that McDonald's built with all the rubles 
it made from selling Big Macs in Moscow before the end of communism… money that 
McDonald's had pledged not to take out of the country。 
Seven years later; said Pickering; 〃we now have eight hundred Russian engineers and 
scientists working for us and we're going up to at least one thousand and maybe; over 
time; to fifteen hundred。〃 The way it works; he explained; is that Boeing contracts 
with different Russian aircraft companies…companies that were famous in the Cold War 
for making warplanes; companies with names like Ilyushin; Tupolev; and Sukhoi…and 
they provide the engineers…to…order for Boeing's different projects。 Using 
French…made airplane design software; the Russian engineers collaborate with their 
colleagues at Boeing America …in both Seattle and Wichita; Kansas…in computer…aided 
airplane designs。 Boeing has set up a twenty…four…hour workday。 It consists of two 
shifts in Moscow and one shift in America。 Using fiber…optic cables; advanced 
compression technologies; and aeronautical work flow software; 〃they just pass their 
designs back and forth from Moscow to America;〃 Pickering said。 There are 
videoconferencing facilities on every floor of Boeing's Moscow office; so the 
engineers don't have to rely on e…mail when they have a problem to solve with their 
American counterparts。 They can have a face…to…face conversation。 
Boeing started outsourcing airplane design workto Moscow as an experiment; a sideline; 
but today; with a shortage of aeronautical engineers in America; it is a necessity。 
Boeing's ability to blend these lower…cost Russian engineers with higher…cost; more 
advanced American design teams is enabling Boeing to compete head…to…head with its 
archrival; 

Airbus Industries; which is subsidized by a consortium of European governments and 
is using Russian talent as well。 A U。S。 aeronautical engineer costs 120 per design 
hour; a Russian costs about one…third of that。 
But the outsourcees are also outsourcers。 The Russian engineers have outsourced 
elements of their work for Boeing to Hindustan Aeronautics in Bangalore; which 
specializes in digitizing airplane designs so as to make them easier to manufacture。 
But this isn't the half of it。 In the old days; explained Pickering; Boeing would 
say to its Japanese subcontractors; 〃We will send you the plans for the wings of the 

777。 We will let you make some of them and then we will count on you buying the whole 
airplanes from us。 It's a win…win。〃 
Today Boeing says to the giant Japanese industrial company Mitsubishi; 〃Here are the 
general parameters for the wings of the new 7E7。 You design the finished product and 
build it。〃 But Japanese engineers are very expensive。 So what happens? Mitsubishi 
outsources elements of the outsourced 7E7 wing to the same Russian engineers Boeing 
is using for other parts of the plane。 Meanwhile; some of these Russian engineers 
and scientists are leaving the big Russian airplane companies; setting up their own 
firms; and Boeing is considering buying shares in some of these start…ups to have 
reserve engineering capacity。 

All of this global sourcing is for the purpose of designing and building planes faster 
and cheaper; so that Boeing can use its cash to keep innovating for the next generation 
and survive the withering competition from Airbus。 Thanks to the triple convergence; 
it now takes Boeing eleven days to build a 737; down from twenty…eight days just a 
few years ago。 Boeing will build its next generation of planes in three days; because 
all the parts are being computer…designed for assembly; and Boeing's global supply 
chain will enable it to move parts from one facility to another just in time。 
To make sure that it is getting the best deals on its parts and other supplies; Boeing 
now runs regular 〃reverse auctions;〃 in which companies bid down against each other 
rather than bid up against each other。 Theybid for contracts on everything from toilet 
paper for the Boeing factories to nuts and bolts…the off…the…shelf commodity 
parts…for Boeing's supply chain。 Boeing will announce an auction for a stated time 
on a specially designed Internet site。 It will begin the auction for each supply 
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item at what it considers a fair price。 Then it will just sit back and watch how far 
each supplier wants to undercut the others to win Boeing's business。 Bidders are 
prequalified by Boeing; and everyone can see everyone else's bids as they are 
submitted。 
〃You can really see the pressures ofthe marketplace and how they work;〃 said Pickering。 
〃It's like watching a horse race。〃 
The Other Triple Convergence 
I once heard Bill Bradley tell a story about a high…society woman from Boston who 
goes to San Francisco for the first time。 When she comes home and is asked by a friend 
how she liked it; she says; 〃Not very much…it's too far from the ocean。〃 
The perspective and predispositions that you carry around in your head are very 
important in shaping what you see and what you don't see。 That helps to explain why 
a lot of people missed the triple convergence。 Their heads were completely somewhere 
else…even though it was happening right before their eyes。 Three other things…another 
convergence… came together to create this smoke screen。 
The first was the dot…com bust; which began in March 2001。 As I said earlier; many 
people wrongly equated the dot…com boom with globalization。 So when the dot…com boom 
went bust; and so many dot…coms (and the firms that supported them) imploded; these 
same people assumed that globalization was imploding as well。 The sudden flameout 
of dogfood。com and ten other Web sites offering to deliver ten pounds of puppy chow 
to your door in thirty minutes was supposed to be proof that globalization and the 
IT revolution were all sizzle and no beef。 
This was pure foolishness。 Those who thought that globalization was the same thing 
as the dot…com boom and that the dot…com bust marked the end of globalization could 
not have been more wrong。 To say it again; the dot…com bust actually drove 
globalization into hypermode by forcing companies to outsource and offshore more and 
more functions in order to save on scarce capital。 This was a key factor in laying 
the groundwork for 
198 
Globalization 3。0。 Between the dot…com bust and today; Google went from processing 


roughly 150 million searches per day to roughly one billion searches per day; with 
only a third coming from inside the United States。 As its auction model caught on 
worldwide; eBay went from twelve hundred employees in early 2000 to sixty…three 
hundred by 2004; all in the period 

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