IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 42, NO. 4, NOVEMBER 1995 419

Book Reviews

The World in 2020-Hamish McRae (Harvard Business School Press, 1994, 302 pp., $24.95) Reviewed by Richard C. Dorf

In The World in 2020, Hamish McRae makes sound statements about transitions in the world’s social and economic future. McRae first looks at the world as it is now, and by examining the forces for change he tries to describe the world as it might look 25 years hence. The author, a British journalist, draws on his worldwide experience to shape a global view remarkably free of British myopia. Readers will find many ideas and issues of interest and will be offered by the lucid descriptions much to ponder and shape to their needs. McRae, economist and associate editor of The Independent, displays a talent for portraying scenarios that stimulate thought.

The author divides his descriptions into three regions and their societies: North America, Europe, and East Asia. He acknowledges that if economic growth is to benefit all, then it must account for social and environmental concerns. Wealth, McRae states, will continue to flow from industrialization and the manufacture of goods, but gradually comparative advantage will be achieved by efficiently producing services. The delivery of services by well trained workers can achieve global success. His primary example is McDonald’s. In McRae’s view, the most important innovations from the US in recent years are the personal computer and McDonald’s restaurants. McDonald’s, in 1994, had 15 205 outlets in 79 countries and world- wide sales of $26 billion. Approximately 42.5% of McDonald’s sales are outside the US. McDonald’s is a progenitor of the future. It has sound management, excellent training schemes, solid brand image, consistent quality, and perhaps most importantly, it is a paragon of US culture.

McRae believes that the key export that will serve the US for the ensuing decades is American culture exemplified by beverages, food, films, television, videos, music, books, and represented by firms such as McDonald’s, Coca-ColaQ, and Disney’. As McRae points out, intellect can be replicated but culture cannot.

Nevertheless, countries with desirable exportable products and services with strong cultural dimensions may experience challenges within their social fabric. Nations require sound educational and social systems in order to develop and retain their competitiveness. McRae states that countries will grow richer if they can maintain a self-disciplined society. The present generation of US school gradu- ates may, in his view, not experience a better material life because of exacerbated social problems. He describes the pressing issues as crime, bureaucracy and waste, social disruption, and dissolution. McRae, in summary, describes the potential for great creativity within North America, and yet success requires a people with a greater degree of self-discipline.

McRae portrays limited roles for governments in economic man- agement as markets work better than government intervention. Gov- ernments will be expected to do less and to achieve their aims by regulation, not actually carrying out activities. Governments getting it right is difficult and requires small incremental steps. McRae notes that business and knowledge workers can migrate to regions or countries with better infrastructure and more limited regulations and waste. Thus countries will work to sustain competitive advantage by

The reviewer is with the University of California, Davis, CA 95616 USA. IEEE Log Number 9415976.

attempting to institute and improve effective governmental systems. All governments will be forced to ask themselves: Do we devote too much resource to nonwealth producing activities?

Europe, in McRae’s view, has the strength of diversity of industries and peoples. He acknowledges the German mechanics industry, Italy’s fashion industry, and the British financial services as strengths. By contrast, East Asia’s strengths are exemplified by flexibility, a high savings rate, respect for education, and a strong work ethic. McRae correctly notes that Japan is a paragon exporter in only two main areas: consumer electronics and motor vehicles. It is Japan’s large market share in these two areas that incite envy. Europe exports in a wider range of products. Japan is still an importer of knowledge, while Europe and North America excel in the development of new knowledge.

McRae points to the aging of Japan and notes that an older nation may be a slower-growing one. Older societies will, most likely, result in lower inflation, low unemployment, lower crime, low tolerance of disorder, and greater acceptance of authority. Those retired will rely on income from savings.

Another global change is the huge sums of money that have moved across borders in the past two decades. If these trends continue unabated, Japan may own a large portion of the rest of the world. Another more benign alternative is that Japan’s workers will seek to enjoy the fruits of their labor and shift to consumers from veracious savers.

McRae asserts that realized profits will be less in manufac- turing and greater in design, marketing, and brand enhancement. Comparative advantage may accrue to those companies that assess worldwide opportunities and then find ways to exploit their inherent advantages.

McRae envisions greater reliance on “portfolio workers” who work on a contract basis and perhaps telecommute for much of their work life. Nations will spend more on education and retraining in order to continually restore the work force skills. McRae expects the restructuring (reengineering) boom to temper off by 2010 as industrial nations complete their competitive realignments.

One of the weaknesses of the book is its limited discussion of biotechnology and technological innovation. Another limitation is the constrained discussion of the environmental impacts of projected development. McRae envisions continued dependency on fossil fuels with substitutes coming on as fuel prices escalate. The prediction that China will become the world’s largest polluter as it exports its coal resource may concern the reader.

A better educated and healthier world does not necessarily lead to wiser use of resources. The World in 2020 is a book worth reading as wisdom grows from understanding.

Strategic Technology Management-Frederick Betz (New York: McGraw-Hill, 1993, 476 pp.) Reviewed by E. Frank Harrison.

This new book has some lofty objectives that it never quite achieves. Ostensibly, it is a book that deals with the management

The reviewer is with the School of Business, San Francisco State University, San Francisco, CA 94132 USA.

IEEE Log Number 9415979.

0018-9391/95$04.00 0 1995 IEEE