Management | The Drucker Exchange

Management | The Drucker Exchange: "One benefit of being an underachiever is that you have a lot of potential.

According to an article in the McKinsey Quarterly, the manufacturing sector of India knows that all too well. The authors point out that India’s “exports are growing” but that “its manufacturing sector generates just 16% of India’s GDP—much less than the 55% from services.”

As a result, people who invest in Indian factories often find themselves disappointed. “A majority of India’s largest manufacturers don’t return their cost of capital, a factor that dampens investment in the sector and makes it less attractive than its counterparts in competing economies,” the article explains. “If India’s manufacturing sector realized its full potential, it could generate 25% to 30% of GDP by 2025, thus propelling the country into the manufacturing big leagues.”

This is, most broadly, a problem of management, a topic about which Peter Drucker had a few things to say. But it’s also more narrowly about figuring out what sort of productivity would be best for today’s India, given its capital resources."

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