Father Knows Best

January, 2006

On November 11, 2005, at the age of 85, the father of modern management, Peter F. Drucker, passed away at home in Claremont, Calif. In early 2000, Hawaii Business, was able to get Drucker’s comments on a wide range of subjects related to Hawaii’s economic future. Drucker’s insights are relevant and appropriate today, as we embark upon a new year and new opportunities. Here are some highlights of his written answers (Note: Sorry for what appears to be shouting, but the capital letters are what Drucker used):

On Hawaii’s Size

“I know you in Hawaii believe that your small size disadvantages you. But that’s simply nonsense. In the present world economy it is LARGE SIZE in a country or territory that seems to be a disadvantage. The areas that are doing by far the best are all small. Luxembourg – half Hawaii’s population – has the world’s highest per capita income. It’s the other SMALL countries in Europe that are doing best: Finland, Denmark, Holland, Austria. And in the Pacific, it’s again the SMALL places: Singapore, Taiwan, Hong Kong (before the Chinese took over) that do better than the big ones – precisely because they are so small that their businesses have to learn to be global.

On Prospects for Agriculture
You in Hawaii simply had it too good too long – supported by the U.S. military and by your climate, which brought the tourists to develop the kind of business that flourishes precisely because its home territory is small.”

“Actually AGRICULTURE has been one of the most successful ENTREPRENEURIAL areas – as witness the phenomenal rise of agriculture in the central valley of California – based on NEW crops e.g. kiwis, guava and almonds, etc. Similarly, Denmark, next to Luxembourg, the European Continent’s riches and most prosperous country, is solid based on agriculture though it has largely switched out of butter. And New Zealand too is prosperous because it has modernized its agriculture.”

What’s Needed Here

“It’s easy to envisage Hawaiian global businesses. Your cultural diversity should make it easy to become the preferred headquarters location for Pacific Basin financial services business. And with e-commerce, Hawaii should be an ideal location for e-commerce headquarters, especially as Hawaii has the best communications in the entire Pacific Basin, and in all directions. WHAT IS NEEDED ARE THE ENTREPRENEURS.”

I hope many will rise to meet Peter Drucker’s challenge to our state. Many have already, and their stories will be here in Hawaii Business.


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