Lets take a stroll through the market – any market, any
city in India. Go into the shops, and observe the products therein. The one
thing that stands out – the proliferation of MNC Brands, brands that originate
outside India, with only production in factories in India, if that. In some
cases, even that is not there – the product is simply imported. Either that, or
its key components are imported. A similar trend, though not so easily
observable, can be seen in industrial markets, with the tendency of imports
being ever-present. Be it steel or be it dairy, it is the same story
everywhere.
This, far from being a success story of the past 28 years,
is actually a telling failure of our local industries, a compelling tale of
abject failure, as company after company falls in share {sometimes even
shutting shop}, with the gains being made by Brands that are not Indian. Our
per capita income has gone up, yes. Opportunities for people have increased,
yes. Lifestyles have improved & poverty has gone down, agreed. And so on
and so forth. One can trot out many logical arguments for this along the lines
of technology and its exchange, economics, international business,
international agreements etc. One can also point out we gained through superior
technology and/or operations skill sets & methods. But that is an argument
that is fraught with pitfalls and high risk – as is now becoming evident with
crystal clarity.
BACKGROUND
Let us establish a background at this stage, before we move
ahead. 28 years ago, we were a closed economy. Our companies were not exposed
to international competition; we also had many challenges in terms of
technological competence, and more. We did not have the money to invest either;
thus, opening up benefited us as it ensured superior technology could come in,
opportunities could be created – this resulted in a general improvement in the
internal conditions. So far, the strategy adopted has succeeded. But, this has
now run its course – not only that, the inability of Indian Industry to compete
properly and grow {in all terms} has resulted in exposing our weak underbelly,
resulting in a slow erosion of Indian Brands that we mentioned above.
Over time, while technology has come in & our consumers
have got a much superior choice now – even in Industrial Markets, we have
failed to make full use of the exposure that we have got. Factories and
Organisations – Joint Ventures, Fully owned, strategic investment route, Licencees
etc – have come in; capacity has got created, manpower has been trained to some
extent as products are manufactured locally. Internal capacity, capability have
both improved tremendously over the past 28 years, of that there can be no
doubt. However, that is all that has happened; a lot more that could have and
should have happened / been done remains undone, and neglected…
THE MISSED OPPORTUNITY
The missed chance, opportunity is simply this – the
intellectual property still eludes us. We are manufacturing, yes; but we are
not creating. We are not creating winning solutions to problems and scaling
them up nationally / internationally. There is little new invention that has
reached Indian Consumers from India, the odd company apart. Most of our work is
me-too, or low value add, rather than high-value production or services etc.
The brainwork, even
if done by Indians in India, is rarely for Indian Brands & Companies. The
exception proves the rule. 28 years ago, we had excuses which were at least
believable; now – we don’t. Not anymore; this failure has nothing to do with
either capacity or capability, as we have demonstrated both in ample measure.
Yet, we missed creating world beaters… be it Mobile Phones, or be it FMCG
brands, we have simply failed to create in the true sense of the word. There
may be the odd Dabur, or Marico, or other such examples; they are the
exceptions {even these are limited successes} in a sea of underperformance.
A TIME FOR INTROSPECTION
Many reasons can be claimed for this – lack of investment,
superior technology and deeper pockets of international organisations, lack of
market depth in some industries and so on. Even conceding the accuracy of those
arguments – one cannot ignore the harsh reality confronting us. Indeed, those
reasons are in fact the most powerful motivators for us to introspect; we don’t
have enough money or technology etc – so should we give up? Become a consuming
nation as opposed to a producing nation? A nation driven by an Economy
dependent on imported IP?
The key questions should be
- why don’t we have the skills to create a Samsung, or an Apple, or a
Danone, or a Unilever in India? What are the skill sets, capabilities needed to
achieve this in the 2020 marketplace– given the harsh realities alluded to
above? What prevents us, hinders us? Where do we lack? Why cant Make in India
have the same level of Brand Relevance internationally as a Made in Japan or
Made in USA? What is holding us back? For us in India, this is a time for
introspection, looking inside ourselves, and finding where we lack, and what we
can do to turn it in our favour… this is the topic of the next few articles in
this mini series, wherein I look at some of the hindering factors in our approach.
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