Page 140 - The Drucker Lectures

Knowledge Lecture IV [ 121

feeding, but they are today a distinct minority; increasingly, col-
lege dormitories are not run by the colleges but by contractors.
And one of the largest architectural firms in the world is just
now spinning off its drafting work into a company in which the
architect will own 49 percent, the draftsmen 51 percent. The ar-
chitecture firm has 63 offices worldwide, which go from Sydney
to Taipei to Austria. But they will do all their drafting work out
of Kentucky.
Five years ago those architects could not have put their draft-
ing work in Kentucky. But now with fax machines, there’s no
problem. The head office can get what it needs, and draftsmen
don’t have to meet customers and don’t really make decisions,
and so there is no need for them to be in downtown Los Angeles
or in downtown Tokyo. With fax machines on either end, the
drafting people in Lexington are next door to everybody.
You’ll see more and more of this, and there are good reasons
for it. First, contracting out gives you employment flexibility. You
can get rid of a contractor and the contractor’s people, where you
can’t get rid as easily of your own employees. The Japanese have
been doing this for 30 years. Seventy-four percent of the people
who work for Toyota are not on the Toyota payroll but on the
payroll of contractors, of suppliers, and have been for a long time
for a variety of larger historical reasons. This is what makes “life-
time employment” possible in Japan. Half of those on Toyota’s
payroll are men. The other half are women, and in Japan they
are automatically considered temporary employees anyhow. And
then, the supplier’s employees are not Toyota employees and have
no employment security. And so Toyota basically has lifetime
employment for one-seventh of the people who work for it.
Demographic pressures will also force more contracting
out of work. Increasingly there will be middle-aged or older
women with half-grown children who will want to be in the
labor force. And the great majority will not be senior VPs. The