Having owned and worked several herding breeds of border collies, yes, prey drive is what you want. The instinct to chase moving objects, to hunt/kill/eat/survive. That's the very drive you would seek in any new herding dog. No prey drive, (and you do get them occasionally from working lines), are no good, they don't survive on farms generally. They are generally shot in a farming world. Personally, i couldnt do this, but have several memories of this occurring for our working dogs
Can a herder learn simply from watching a trained herder? No, a dog will not learn the right lessons, it will learn all the bad tricks of the other dog too. Consider the behaviours on cue a herder requires? Prey drive is not enough. Focus and control of its own prey drive for the handler, cannot be taught a pup by another dog. Time in training with handler does that.
As a herder, I would say The GSD has the fault of deciding it knows better than the handler, what comes next, whereas you tend to see this less in collies, koolies or kelpies. (most popular herders in Austrlia). Also, mine gets too hot on 45 degree days to work, where the other breeds mentioned are fine. Its common for a dog not to drink when working, so dehydration is a real problem for my GSD when im working him in summer months.
Mine only herds twice a year. With 6 months break in between. Never does he forget how, or the commands. His drive to play this 'game' is intensely self reinforcing him. It beats fetch a ball any day according to berne!
We play treiball for fun. This too is better than fetch a ball according the bernie. And i can teach it from a sofa indoors if i wish!
Treiball: Sheep herding where the 'sheep' are yoga exercise balls. I also use ducks and geese to train him with, as that's all i have access to all year round.
When Bernie was learning, he'd try to bite the ball initially, so he had to first learn to control his own behaviour. I over inflate the ball, so a bite will burst it easily.
'Act of god' explosion upon pup biting is generally sufficient as a one off lesson to the dog. The 'sheep' dies instantly and ends the game. Pup wanted to keep playing, and now he's blown his opportunity, quite literally.
puncture repair kits make treiball sheep immortal, so no harm done.