Commerce and industry minister Kamal Nath on Thursday said intellectual and entrepreneurship ability are the drivers of success for companies from India and other fast-developing economies.
At a special breakfast session, organised by the Confederation of Indian Industry (CII) and The Boston Consulting Group (BCG), Nath said the appearance of companies from emerging markets, as new global challengers, was a new phenomenon and had surprised all. The minister said cost arbitrage alone did not propel these companies on the global marketplace. He said it was a combination of entrepreneurial ability and technology, which enabled these companies to get on to centrestage. Nath pointed out that for about a decade such companies in India, China, Indonesia, Philippines and Thailand begun getting their act together and several of them have now become global.
Even in India, many were newcomers, taking advantage of technology and the demographic advantage. The new drivers of the future had shown the power of this combination in India.
Nath said the large domestic market had helped Indian companies to be competitive and catapult themselves globally. Indian companies had taken advantage of globalization and were globally competitive and added that east asia was the most competitive region. The fact that there was a spate of regional trade agreements that India was entering into underscored that India and the rest of Asia were reaching out to each other.
Hans-Paul Buerkner, president and CEO of BCG, mentioned that many of these 100 companies came from nowhere, but though they were challenging the status quo, these companies also represented a great opportunity for those who understood this phenomenon and act quickly. Buerkner said these top 100 companies were growing 3 times as fast as Fortune 500 companies. Also, their profitably was higher.
Bajaj Auto chairman Rahul Bajaj, whose company was in the list of the 100 in the BCG list, said that the opening up of the Indian economy in 1991 taught Indian companies to be competitive. He said the greatest guru for business was competition. Bajaj said low cost was not always the advantage as India had high transaction costs. It was a cooperative competition of cost arbitrage and technology imports.