The First Letter from Drucker to the Roman Catholics
I spent an evening attending my local parish’s financial report with specific interest as to the continued operation of the parish school. It appears that there is a financial shortfall for the school which is heavily subsidized by the church.
I mentioned to the pastor what Peter Drucker stated in his seminal work – Innovation and Entrepreneurship – regarding demographic shifts – an aging population, smaller family sizes, less weddings, more funerals, and fewer baptisms, and how this has precipitated the financial crisis, and not insufficient religious worship (and tithings).
Of the outside sources of innovation opportunity, demographics are the most reliable. Demographic events have known lead times; for instance, every person who will be in the American labor force by the year 2000 has already been born. Yet, because policymakers often neglect demographics, those who watch them and exploit them can reap great rewards.
The Japanese are ahead in robotics because they paid attention to demographics. Everyone in the developed countries around 1970 or so knew that there was both a baby bust and an education explosion going on; half or more of the young people were now staying in school beyond high school. Consequently, the number of people available for traditional blue-collar work in manufacturing was bound to decrease and become inadequate by 1990. Everyone knew this, but only the Japanese acted on it and they now have a ten-year lead in robotics.
Much the same is true of Club Mediterranean’s success in the travel and resort business. By 1970, thoughtful observers could have seen the emergence of large numbers of affluent and educated young adults in Europe and the United States. Not comfortable with the kind of vacations their working-class parents had enjoyed—the summer weeks at Brighton or Atlantic City—these young people were ideal customers for a new and exotic version of the “hangout” of their teen years.
Managers have known for a long time that demographics matter, but they have always believed that population statistics change slowly. In this century, however, they don’t. Indeed, the innovation opportunities that changes in the numbers of people, and their age distribution, education, occupations, and geographic location make possible are among the most rewarding and least risky of entrepreneurial pursuits.
The Pastor (also County Vicar) said “I’ve never read any of the works of Peter Drucker, but I’ll tell you who I do know – The Holy Spirit!”
