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Economy

Jan 09, 2004
Drucker on outsourcing, India and China

Peter Drucker is not just a management guru as it is commonly supposed. He is the very inventor of management as a subject. Plus some more: he is an economist, sociologist, historian and visionary. At 94, he still teaches, consults, writes—and, envisions. Recently he gave an interview to Fortune magazine. In it he blows away a lot of myths. It also has a glimpse of how Drucker’s very original mind views the current hysteria over US jobs outsourced to India and other countries.

What follows is a summary of a private mail sent by Ram Narayanan who runs a very influential newsletter on Indo-US relations. The full Drucker interview may be read by following
this link
, but you need to be a paying subscriber to do so.

Although the early parts of the interview deal with issues that only concern the American economy, there are many insights here about economies in general. Drucker says that it’s not true that manufacturing jobs are leaving US shores. Labour costs are such a little part of many advanced products, and US labour is so very skilled and flexible, that the only jobs that are leaving, are the labour intensive --like say, textiles-- and the knowledge oriented ones. Manufacturing in the US has in fact doubled in the last decade. US still has more than enough ‘good’ jobs on offer and every college graduate finds one. There is a mismatch only with regard to insufficiently trained labour. It is not so much that there aren’t jobs; it is just that the unemployed seem untrained for the jobs that there are. Many immigrants arrive on US soil “qualified for yesterday’s jobs, which are the kinds of jobs that are going away.”

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