Atoms make up the rival part of a particular good, that which may be possessed corporeally by just one person at a time -- a banana, say, or a Cuisinart, or a paperback edition of A Tale of Two Cities. Bits comprise the nonrival portion, that which can be written down and encoded in a computer, and therefore used simultaneously by any number of persons -- the genome of the banana, the design of the food processor, the text of Dickens' novel.
...It is the nonrivalry of knowledge that is behind globalization, not some mysterious flattening of the earth. What has fundamentally changed is the willingness of previously non-participating nations of the world to join in the chase, by educating their citizens and permitting them to acquire and create and deploy new knowledge in global markets.
In the last paragraph quoted above, I think that Warsh goes too far. He completely ignores the Internet, and he makes it sound as if governments all of a sudden decided to open their economies. I see both technology and changes in policy playing a role in fostering growth in places like Ireland and India.