In our previous post, we explored systemic challenges to the outsourcing industry in India. This post discusses challenges and successes.
The challenges for India's global enterprises can be viewed with ‘Yes, but what about…’ success examples in metals, automobiles, aerospace, and medical tech? For each hard won success story there are hard and expensive lessons. In other East Asian societies the ‘We can only afford to invest in success,’ attitude raises the conscious risk taking in political and enterprise consensus building.
The shortcomings of capital assembly and application in immature capital markets limit the critical capital scale to continue large and risky initiatives. Enterprises seeking first mover or even early mover advantages may fall behind global enterprises or governments driven by more singular visions. Another hindrance is the historical pattern of failing to sell outside of the domestic markets. In the face of competition Indian companies are not as known as Unilever, P&G, or Sony and that constrains possible margins. Even though Tata Motors car models have a strong presence locally, its domestic brand success has not translated into overseas sales.
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Foreign direct investment may reflect invasion of the domestic market by an Alien Invader (using their own technologies and business models). Slow-to-never completion of complex projects in market sectors like energy, infrastructure, or land development show the worst of bureaucracy and politics limiting scope and scale.
India’s Global aspirations are constrained by the dependence on technology transfers and conflicts in management of critical areas such as pharma (medical tech), energy, and communications. Inadequate energy, water, transportation, and public services infrastructures concentrate talent into geographies that may not be sustainable or attractive to foreign investment. In order to compete globally these lessons must be applied to government/legal, capital, technological supply chains, talent pools, and efficient channels to apply talent and resources.
Systemic and ingenious changes are needed to survive Alien Invaders as diverse as Walmart, Amazon, Korea Inc, Japanese Keiretsu, and the national champions of newly developing countries.
Disadvantages must be transformed to advantages: cultural friction to deploying talent, expansion, and development of multiple infrastructures to ignite opportunities, focus on enterprise sectors that can achieve stunning success rather than dismal incompletion, and limiting self-imposed barriers (such as treatment of foreign investment and intellectual property rights).
Even the markets in China, the USA, or EU are shown by example not to be self-sufficient. By itself, this isn’t a barrier to success. The Indian economy may never be self-sufficient but can transform to be efficient and effective in a global marketplace to be sufficient in domestic needs.
In our final post, we explore examples of challenges to India’s market players.
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