A marvellous couple of days in Vienna this week – at the annual Peter Drucker conference. With speakers and participants from around the world, it was as sparkling an event as the Christmas markets that filled Vienna’s beautiful squares. The idea was to think about the impact Drucker’s idea would have on the way that work developed.
However, whilst the surrounding may have been sparkling – many of the speakers gave sobering accounts of the future. In particular the German and Austrian economists talked of a situation they found of deep concern.
That’s a clue by the way to the puzzle of what the Japanese and Peter Drucker have in common. Both live to a ripe old age. Drucker passed away in Claremont California at the age of 95 – a decade older than the average Japanese women (86) and Japanese man (80). What happens when citizens across the world live as long as Peter Drucker?
For the European economists at the conference, the most pressing concern they spoke of was Europe’s ageing population. They saw this as creating huge challenges to the vitality of the developed countries of the world – but also perhaps some opportunities to live more closely by the standards that Drucker spoke of.
I was reminded of this when I read the excellent piece in this week’s Economist about Japan’s shrinking population and plummeting fertility. Like much of Europe, the implications are bleak – ever greater strain on pension costs and public finances (In Japan social security benefits were 12% of GDP in 1990, by 2000 they were 20% and forecast to grow to 35% by 2025); a bulging middle –management class; and a seniority pay system that puts huge strain on business costs, leaving less money to provide younger people with training or good jobs
Looking to the future, if we are to ease the strain, then countries (and companies) need a ‘grand plan’ for an ageing population which transforms the threats into opportunities. This ‘grand plan’ could well have elements of which Peter Drucker would be proud. Here are the five ways to ease the strain of a world full of the over 60’s
- First, use all the energy in the labour force -that means for example, creating a working culture in which women can flourish and assume greater responsibilities.
- And be prepared to employ more immigrants- that has implications on the acceptance and integration of different nationalities.
- Next, encourage older people to stay in and to join the labour force - that will mean scrapping the seniority- based pay system and the mandatory retirement ages.
- Then look outside the country to attract talent - the percentage of overseas students is a good measure of this , at present the educational talent magnets are Australia (29% of students are from overseas); 16% in Britain; and 13% in America.
- Look to companies to boost productivity and promote a more vibrant economy - many countries have in the past experienced massive technologically fuelled boosts, but this has often levelled off. The next boost in productivity will come from democratic lead management practices and cultures of innovation.
- Finally, create opportunities for young people to follow their instincts and create entrepreneurial teams both within and outside of companies.
We certainly saw some of this vitality at the Drucker conference. The ten young people who had won the Drucker essay awards had come from all over the world to receive their awards. They told us oldies how Drucker had inspired them. Rousing stuff- and even the ageing European economists had something to smile about. Perhaps it’s not as bad as we thought…what do you think?