India Still Off Global Business Leaders Map
The annual meeting of the World Economic Forum in Davos prides itself on being an agenda-setting exercise. Forum president Klaus Schwab advises participants to take back with them at least one new idea at the end of each annual meeting.
If this years meeting has any central idea for India as an economy, it is that the global tidal wave of economic reform continues. Anyone who believes that the Asian flu has resulted in disillusionment with the process of liberalisation and globalisation should quickly think again because the economies that have been hit by the flu are reforming, and doing so with a vengeance. Thailand, Korea and perhaps even crisis-ridden Indonesia will emerge as stronger systems and competitors.
These economies are now going beyond the issues of privatisation, competitiveness and opening up to international investment; they are focusing on issues of transparency and good governance, and on anti-corruption measures. Multilateral institutions have latched on to the same agenda and it so happens that these are live issues in India as well.
The second message is that the non-Asian emerging markets are also striving to achieve further reform. The heads of governments of countries as diverse as Brazil and Uganda, Argentina and Pakistan, and Mexico and Russia, all talked of privatisation, attracting international investment, and improving the state of the infrastructure.
The reassuring thought is that the Indian policy agenda is in tune with that of the rest of the world. The worrying aspect came through at the session where Pakistan Prime Minister Nawaz Sharif spoke. With former ABB chairman Percy Barnevik in the chair, Sharif detailed how far Pakistan had come down the reform road.
Barnevik virtually snubbed him by saying no one was interested in where you were coming from; the game was competition for international capital, and the only question was whether you were as good as the other economies in what you offered. It was a question that could have been addressed to an Indian leader as well.
The point that came through forcefully was that India is still off the map for most business leaders. The CEO survey done by Price Waterhouse showed that only 4 per cent of the CEOs polled were planning to invest in India, compared with 22 per cent in China. Indeed, the pin-drop silence in which the Davos audience listened to a powerful message of growth and development from Chinas vice-premier Li Lanqing, and the deference with which he was treated, conveyed its own message about who enjoyed economic power.
Hillary Clinton, during her 20-minute speech on Monday, made one reference to India and one to China. In the case of India, the reference was to how poor people faithfully repay loans taken from a womens bank. In Chinas case, it was to say that a child in Shanghai had a greater chance of reaching the age of five than one in New York.
But India is breaking through the consciousness of people in the world of information technology. Bill Gates of Microsoft talked off his own bat about setting up an R&D centre in India, and Larry Ellison of Oracle mentioned in passing how Bangalore provided a more cost-effective software development centre than any place in the US.
For the Indian corporate chieftains attending the Davos meeting, the intellectual inputs provided at several sessions must have been stimulating, and many of them were able to spell out the one big idea that they were taking home from the meeting (following Schwabs advice). But it was depressing to see how many Indian participants (among them the most prominent business names in the land) wanted to make a beeline for the sessions on family-managed companies when they should have been heading for sessions dealing with ideas for the larger world of big corporations.
Rajat Gupta of McKinsey probably put through the single thought that is of direct relevance to most Indian companies. A tiny sliver of business in which you can be a global player, Gupta argued at a session on strategy, could be worth much more than a broad-spectrum business in which you do not have global advantage. The difference between the Indian economy and the Indian corporate world lies perhaps in the fact that Indian economic policy is now in line with the rest of the world, while Indias corporate sector is still not there.