Peter Drucker: Giving the Seal of Approval

You know ideas are funny things. They go round and round and round in a circulation process which is hard to understand, and then suddenly they arrive: bingo, it's true, you know so and so is saying........

Well I think we just went though one of those barriers on India. Some people have been saying kind of tirelessly and repeatedly (Stephen Roach, Brad, Me) that India is arriving: watch out. Now finally, Fortune has published an interview with Peter Drucker, which then showed up in an reduced version on Josh Marshalls Talking Points Memo (incidentally Josh seems to entirely miss the point, imagining that India is destined to enhance the US position rather than supplant the US as the global mega power) and then David goes on to post the story on Fistful. It even shows up here in India.


In general I am sympathetic to Drucker's argument. I do think India will be the new 'brainy' superpower, and that China will become the manufacturing hub, but not the global leader. Day-to-day contact with young bloggers in each of these two fascinating countries makes me even more convinced.

Druker, however, does seem to have an incredible amount of difficulty with detail.

Look at his arguments about Japan being the beneficiary of the US's discomfort, in fact they mainly stand to lose by a continuing dollar slide, as do many of the world's central banks including the ECB. Also a massive devaluation in the dollar, by making US debts worth a lot less, could be positive for the debt, although perhaps not so much so for the US standard of living.

In fact Drucker doesn't seem to understand much economics.

He is also rather weak on fact. The number of 150 million for competent English speakers is clearly ridiculous. No-one really seems to know for sure, but I deduce, somewhat haphazardly, that mother tongue English Indians may account for only between 5 and 10 millionfrom this page. (Josh Marshall again notes the discrepancy in Drucker but claims about 20 million English speakers with 150 million fluent speakers citing this page which at least has the merit of recognising that "exact figures do not exist". Not for nothing am I referring to India in my posts this week as an area of darkness!). Of course the point is that many many more understand English than those who could properly be considered mother tongue speakers, and many of those speak it well - though there are certainly not 150 million in that class - so if India moves up the value chain into things like biotech and software development, and away from all those wretched call centres - which could easily move out to Bangladesh, Pakistan etc as Indian costs rise - then speaking a clear version of the queens English may not be so important.

Drucker is also off target with his numbers for rural India, which are normally put at 700 million or around 70% of the population and possibly rising as the birth rate in the cities declines. He even gets it wrong on IITs: Bangalore is one of the places where there isn't an Indian Institute of Technology, although, there is an Indian Institute of Science there.

So when you look at it, it may be hard to find a single fact which you can corroborate here (including his information on education in China).

Having said all that, I still broadly agree with his point.