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GP 16 November 2005: Just One Fish in the Big Pond

The American Colossus.  A British historian now camped out at Harvard has told America that it’s now an empire, and that it had better deal with it.  Niall Ferguson’s Colossus: The Rise and Fall of the American Empire somehow suggests at the same time that our day in the imperial sun may be over before we all know it has begun.  One review of the book ably details Ferguson’s exposition of our omnipotence.  But the book is overdone, and, worse yet, our politicos take it seriously.  The fellows down in Washington are acting like we can run the world, and this worldview threatens to drain our already depleted national treasury well below zero. 

Death at Claremont.  The ultimate prophet of profit, Peter Drucker died last Friday, his mind churning to the end.  He had spent his last years in residence at Claremont, having made his early imprint at New York University with Juran, Deming, and Feigenbaum, and as one of these four horsemen helped remake Japan’s economy after the war.  Standard reading in business schools and corporate suites, his books turned heads from here to Tokyo.  Compared to him, all the gurus out of McKinsey and the business schools have always seemed to be pretty tame stuff.

Towards the last he made clear that U.S. was no longer the center of the universe.  It follows that those deluded leaders who put on imperial weeds today not only are bankrupting our treasury but depleting our minds with ideas that don’t hold water.  We cannot play the global economic game very well if we stare in the mirror and think we are giants in a world of pygmies.  We are, in fact, just one little fish in a big pond. 

Perhaps Drucker has a more realistic view of our power because he was an émigré from the chards of the Austro-Hungarian empire, which was just an empty suit at the end.  Drucker was one of a long line of expat-Vienna intellectuals who brought depth and breadth to the major conversations around London, New York, and other Anglo Saxon capitals.  It is truly curious how many original, bright people have come out of Austria. 

For Brent Schlender of Fortune (January 12, 2004), Drucker set out the new shape of the world: 

The dominance of the U.S. is already over.  What is emerging is a world economy of blocs represented by NAFTA, the European Union, ASEAN.  There’s no one center in this world economy.  India is becoming a powerhouse very fast.  The medical school in New Delhi is now perhaps the best in the world.  And the technical graduates of the Institute of Technology in Bangalore are as good as any in the world.  Also, India has 150 million people for whom English is their main language.  So India is indeed becoming a knowledge center. 

There no longer is a center of the world.  If there were, it would be in Asia.  But, with the end of the Cold War, there’s not one center, or two centers, but a host of nodes that control our economy and our politics.  If we face that reality, then we will have a better future.

Collaboration.  With knowledge and power so widely distributed in the world, no individual or organization has the resources, bandwidth, or integrative power to master the network.  We are thrust willy-nilly into a world where nobody is dominant and in which everybody must cooperate to obtain useful results.  Our managing partner just painted this kind of economic model in a conversation he had with Ubiquity, a thoughtful, online magazine sponsored by the Association for Computing Machinery.  He likens the new economic world to the complex picture of the human nervous system that neurologists are now creating: 

Besides the brain in one’s head, there’s also a brain in the gut that controls the digestive system and so forth.  It’s a fairly serious brain.  I suspect that we’re going to turn out to have more semi-brains, when we look at the body even more thoroughly, and we’re going to conclude that the human system is the right model for man-made systems, because of the human system’s qualities of durability, ruggedness, and resistance to attack.  What collaboration is about is distributed intelligence, and I think that systems and governments and companies are all in such a degree of gridlock now that we desperately need to have broad-based intelligence coming into play everywhere. 

Falling off the Map.  Elsewhere we have talked of the new importance of the nations at the margin, which, in the words of Pico Iyer, are “Falling off the Map.”  As we said in our letter on this subject, their “vibrant economic activity suggests that the action has shifted from the name-brand countries, post 2000, to the lesser known upstarts.”  The large goliaths—the U.S., Germany, France, Japan, etc—are in gridlock and need to import the mental energy the little powerhouses have to offer in order to recharge their batteries.  Again, this will be done through collaboration, not dominance. 

Our “Agile Countries” and “All Those Unfamiliar Places” (Harvard Business Review, November 2004) elaborate on this line of thinking, suggesting that the good, high-powered ideas that can set our economy to rights are all to be found in the unnoticed nations of the world.  It’s no surprise, therefore, that President Bush is off to Mongolia on his current swing through Asia, for the people in that forgotten country have put together one of the advanced wireless systems in the world, which you can learn about in our “Rounding the World Then and Now.” 

P.S.  You can find the current issue of SpiceLines on the Global Province.  It’s about cinnamon and spice, and everything nice.

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