compulsory reading

Stuck in the middle.

It’s a shame so few people outside the busines community have heard of Michael Porter and his concept of strategic analysis of business environments.

Last year, around this time, Germany was in shock. Not because of some strange election outcome or because I had moved back here but because of the poor results German students had obtained in the OECD Programme for International Student Assessment. After the initial shock had faded a little, the results again surged to public prominence as one of the crucial issues in the elections last September. So after the elections are finally over, one would hope some people would start to concentrate on facts rather than on words. But the OECD is reckless.

Today it published yet another report thus time bashing the German educational landscape for its alleged financial inadequacy and inefficiency. Browsing through the executive summary of the results (in German), I had to realise that the report appears to based to a large extent on the older PISA data. The information concerning the comparatively small amount of money spent on tertiary education is also hardly new.

So why this entry? And why would I mention a professor of business strategy while talking about educational policy, a field in which, certainly in the German case, decision making can, if at all, be described as a garbage can process.

Well, it’s because this new report compelled me to share my understanding of the PISA results and because Prof. Porter has come up the concept of U-curve rentabiliy on investment. He is, of course, referring to a U-shaped relation between two generic business strategies that could lead to a favorable strategic position in the competitive environment and their return on investment – leadership in either cost and volume or in quality and price. Companies which are not successful in pursuing either of these strategies are, according to M. Porter, stuck in the middle and will have to accept a lower return on investment.

Now I know that it might seem a little far-fetched to some, but I contend that Germany is currently stuck in the middle. Not because the German polity can not decide between mass market or quality production, of course. But I believe firmly that many of the current problems in Germany have arisen because of a failure two choose between two, equally successful, but socially opposed ways of organising the educational environment. I will describe those two alternatives as „Scandinavian“ on the one hand, and „Japanese“ on the other, the first being extremelly socially open, market oriented (please note that I use the term market here to denote the inclusion of transactions in the social division of labour) and one rather closed, hierarchical, family oriented. Again, both models seem to be successful. But those who can’t decide between them aren’t.

Now, looking at Germany, we see a somewhat divided country. The more „Scandinavian“ oriented Northern regions and the more „Japanese“-style educational (and social) systems of the South. But in fact, both are in-between.

Well, as the divison of labour is increasing the I believe that this country’s long term shift to the Scandinavian model will continue. That theory however, does not bode well for Bavaria, which features the most Japanese-style educational system in Germany and is still the national number one. But it offers a ray of hope for those regions which currently fare less well but are already somewhat further „North“.

We’ll see.