Page 204 - The Drucker Lectures

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The Changing World Economy

1997

will focus on six main developments that are, by and large, not
Ibeing paid any attention to today but are almost certainly go-
ing to be far more important than any of the things you read in
the papers or the business press. They are the six major changes
that I think will determine how successful a country is, includ-
ing the United States; how successful an industry is; how suc-
cessful a company is; and how successful each of you will be.
I shall start out with a question. Is there one additional skill
that you and your organization will need, which practically no-
body has yet mentioned, let alone acquired? Yes, there is. It is the
skill to manage the foreign exchange exposure of your organiza-
tion. It is now about 25 years since President Nixon cut the dollar
loose from the modified gold standard, in the expectation that
this would lead to stable currencies. I do not have to tell you that
his expectation has not worked out. On the contrary. In no period
in history have we seen greater foreign exchange fluctuation.
And we can confidently expect that to continue. For we are in
a period very much like the period in which I started work—that
is, in the late 1920s, the onset of the Great Depression. At that
time, the English pound sterling no longer could fulfill its tradi-
tional role as the key currency. And the dollar was not yet ready
to take over. Today, the dollar is no longer able to fulfill its role as
the key currency—even though it is and will continue for a long

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