As debates on Indian economic growth, infrastructure and job creation, business environment and corporate balance sheets rage on, an alternative way to boosting the Indian economy would be to create Indian businesses that can scale globally. Essentially, it involves creating global business giants that can help spur economic growth by providing opportunities across the supply chain in India. The focus must be on factors that engender an environment that facilitates the growth of global Indian businesses into global giants, noting that there are Indian businesses that have excelled abroad.
The software services, pharmaceutical and two-wheeler industries are some examples in point. The aim now must be to create an environment in India that can usher in the next phase of growth of global Indian businesses. From retail to financial services to, even, niche sectors such as contract manufacturing services how do Indian businesses go global and compete with competitors on an equal footing? Some factors that immediately commend themselves are better access to capital, building a skilled workforce and the capacity to conduct cutting edge research and development (R&D). Improving these factors and their drivers will go long way towards not just creating highly competitive global Indian enterprises but, more importantly, boosting economic growth, job creation and the business environment.
The issue of better access to capital is widely discussed, mainly because of the problems certain sections of the industry have faced regarding access to capital in the recent past. The focus needs to move towards providing Indian corporates with the kind of support from the credit system back in India that can help them create global businesses. When one sees the likes of LVMH buyout Tiffany or an array of bidders for Thyssenkrupp’s elevator business, one hopes to see Indian companies becoming significant players in such deals in a decade or so in the future.
The aim must be to ensure that Indian firms can utilise both domestic and global capital to compete with the best in the world. Skilling of the workforce has received attention and is work in progress. That said, the ability to generate high-quality human capital with the essential skills will be vital to allow Indian businesses to reach out and succeed globally. The focus must be not just on skilling the workforce, but more importantly, investing high-quality core education that can help create the base required. And then focus by Indian businesses on cutting edge research and development will be vital towards creating global giants from India.
The phrase ‘R&D’ here should not be viewed within the narrow prism of scientific research but must be viewed within the broader framework of innovation across the spectrum. Indian businesses must be able to generate ideas and value in cost control systems, product development, research in cutting-edge technology and deftness in utilising a large home market to its advantage. Innovation on all fronts or all the levers that drive business in terms of operations, technology and financing structures are vital to creating true global Indian giants.
As mentioned earlier, many Indian businesses have done well globally, but now is the time to create an environment for the next phase of global Indian companies to grow and flourish. A view towards improving the business climate and policies to develop global Indian firms will by itself foster an environment that promotes the holistic development of industry, workforce, economic growth and job creation. In essence, the objective of further creating an environment that is conducive for growth when viewed through the prism of creating global Indian companies helps us understand the key drivers of what needs to be further improved upon, i.e. the factors mentioned above.
Competitive and large global Indian businesses that can further compete on foreign shores will also greatly assist the Indian consumer by providing them with access to high-quality and world-class products and services. Indian businesses have made significant progress in terms of overseas expansion but going forward with a renewed focus on creating a platform to help more and larger Indian businesses have an overseas footprint will significantly help create a more robust investment and business climate in India.