Financial Daily from THE HINDU group of publications
Wednesday, Apr 27, 2005
Industry & Economy
Corporate - Trends
Starting up a brand new day
Shyam G. Menon
China maal has provided street flavour to the globalisation mantra. Chinese phool liven up a stall at Crawford Market. Paul Noronha
"I WATCH the western sky/The sun is sinking/The geese are flying south/It sets me thinking."
Like birds in winter, markets and manufacturing hotspots were shifting. Asia was the world's big opportunity and with it, the world was Asia's to explore. The shift was beginning to rub off on Indian companies.
A month ago, as the launch of Tata Motors' new buses drew to a close at the city's racecourse, a company official had thanked the audience in half a dozen foreign languages. It reflected the emergent face of the company, which had acquired manufacturing units in Korea and Spain and spawned partners elsewhere.
Packaging major Essel Propack had been at it longer. The company, with a 32-per cent market share worldwide in laminated tubes, had a global leadership team, almost half of which was people from abroad.
Mahindra & Mahindra had successfully grown a $100-million-plus tractor business in the US, Tata Tea had taken over Tetley, VSNL had bought Tyco, Bharat Forge had acquired CDP ... the list had grown steadily. Such instances were not to speak of overseas presence and foreign workers already at Indian IT firms, arguably the first wave of international companies from the country.
"Turn the clock to zero, boss/The river's wide, we'll swim across/We're starting up a brand new day."
A bit like the `non-local' character of quantum mechanics, globalisation was now a given for business here, seeping in as everything from best practices to market opportunities to even fear of competition. There had been no getting away from it, for though spatially separated, trends unleashed abroad had their impact here. So much so, that an article on the globalisation of Indian business would run the danger of looking passť. Would you articulate the obvious and the inevitable? Besides, not everyone has Sting's genius to breathe magic into something so everyday as a brand new day.
But it intrigued all the same, as when walking on Marine Drive and absorbing the change in looks and attitudes that had happened in so short a time. It was still the `Queen's Necklace' by night, yet compare the cars queuing up to exit the city with the essentially three marques that were the Indian motorist's staple diet two decades ago. Or the neon signs and advertisements of global brands that shone across the waters. Or the girl with dyed hair and a walk borrowed from a fashion channel. It was a changed geography a transformation that would hit you right down to the content and style of conversation along the bay. You ate bhel and talked "time-pass," but eschewed worries and aspirations that lay beyond the waters lapping at your feet.
Until some years ago, the drift to going international had been a palpably slow step-by-step process, nudged along by tariff revisions in the union Budget. Then four to five years ago, the doors to competition had become sufficiently open for many businesses to genuinely wilt under the heat of competition. It had been a period of shape-up or ship-out and some companies, like the proverbial phoenix, managed just that. For those who pulled through, the driving force was no more the duty adjustment effected in the Budget, but the sheer centrality of overall growth as sole protection from the tremendous commodity price pressures that had ruled global businesses for the last couple of years. It was good enough to send metal players searching for mines, oil majors after exploration deals and auto components players looking for bridgeheads abroad to secure big orders.
"Turn the clock to zero, buddy/Don't wanna be no fuddy duddy/We're starting up a brand new day."
Arguably for manufacturing companies, that instance between resurgence from near failure and the shock of spiralling input costs had been the point of no return. There was no looking back now. It was like riding a tiger. Or perhaps, a dragon?
In a lighter vein, the transition had altered the India-China comparison, aired consistently during the earlier ascent of the IT industry, to an inquiry laced less by comparison and more a desire for news about China. After all more than any other country in the recent past, China had driven commodity prices and the market for finished products worldwide. The neighbourhood was now also an opportunity. News of China mattered for Indian business, now stripped of protection and exposed to the world. Some companies entered the middle kingdom, like Mahindra, which acquired a tractor-manufacturing unit in China. Tata Steel gained an indirect presence when it bought Singapore-based NatSteel. Others had the country in their sights and were biding time. Where the world had rushed in long ago, Indian companies were now treading albeit with caution.
As workshop to the world, China also provided street flavour to the globalisation mantra. From the days when China made-Christmas decorations had been a curiosity at the city's Crawford Market, `China maal' had come to mean the common man's tangible share of international trade. Courtesy television channels, the IT juggernaut and much later, manufacturing's revamped face, the world as a new ingredient had entered Indian households.
The ubiquitous overseas relative or the family member dashing abroad and back had given rise to frequent travel, and with that a plethora of fresh perspectives on business and life. Increasing alongside in numbers was the Indian tourist, now a familiar traveller and big spender overseas. Indian students abroad had risen in strength while those at IITs and IIMs back home were being snapped up for fat-salaried foreign jobs. Gradually, the country's elevation to the international business arena received concrete shape when private airlines were allowed to wing abroad. What was a trickle in the early 90s had thus become a flood there was simply no shutting out the attractions of the world and the frenzy of global enterprise would spare no effort to get past Asia's doors. The geese were hell bent on making it South and the southerner wasn't averse to flying up north. Won't stories repeat?
"It could happen to you/Just like it happened to me/There is simply no immunity/There's no guarantee."
Back on Marine Drive, a quiet wisdom reverberated in those simple lines. The evening picture of youngsters at the turning to Churchgate, had always raised questions about the future. Clothed in the world's best brands, they were a far cry from their parents and their parents who had moved to Mumbai in search of work. One hard-working generation, another half of the same and two decades of economic reforms had reshaped Marine Drive's crowd from the world's poor to brash consumers. The lad in Levis, Nokia in hand, was deemed important representing as he did the biggest demographic segment of the Indian market. The brands sought few else on the bay. He was the cynosure of marketers' eyes. His purse, more aptly his father's, was yet rooted in the competitive advantages of Indian manufacturing. But would that remain so when he eventually got to add his car to the nightly queue on Queen's Necklace? Or, would he just be the world's wealthy consumer? A new icon of consumerism to replace the other across the seas, from whose land the winds of globalisation had first swept across this city. From where outsourcing had blown in as an opportunity.
"Turn the clock to zero, honey/I'll sell the stock, we'll spend all the money/We're starting up a brand new day."
Perhaps, there was a pointer in the evening breeze. Follow it, and a thousand kms across the sea lay Africa. As in the song, there is neither immunity nor guarantee in our brand new day. The geese, they always fly on and in economics, South is a relative word.
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