Where are the Indian Brands {Part 2}
Previously in this series…
As seen in the first
part of this series, while today, 28 years after opening our markets, our
customers have the best of brands for consumption, these are more often than
not either foreign brands, or joint ventures etc. Our brands are not globally
competitive, despite the exposure our internal markets and companies have not.
In fact, if anything, more than a few Indian Brands have perished in the past
28-odd years. So the question now arises – consumption and economic growth
aside, what did we gain in the past 28 years, if anything?
Image Credit - Unsplash / Nasa
Moving Forward
To answer this
question, let us take a fair & balanced approach – let us examine our
growth story in terms of successes, as well as failures. Only then can we
understand what we have gained. Further, this examination needs to be done in
parameters not in the public mind; our Per Capita Income, GDP, etc Economic
Numbers based story is too well known to waste time and space recounting. Therefore,
let us look at what we have gained in terms of technological capability in a short
precis or summary, before we move onto the softer aspects of business
Technology Landscape
In 1991, frankly,
our industrial capability was not in great shape; this is too well known now.
Well, a lot has changed since then, and not just in the famous IT space. While
this may seem obvious, it is a needed discussion, as crafting a successful
product / service in the modern global market requires deep competencies in a
variety of domains, ranging from the small to the big. This goes far beyond the
oft-repeated lament “innovation and its lack”. The lack of innovation is a
result of the lack of ability in these constituent smaller competencies. Thus,
the need to go deep to understand them.
What are these
competencies? Frankly, I cannot be comprehensive; however, a few key aspects
are given below. Contrary to popular opinion, excellence in innovating in technology
is not a function of investment; it is more of a question of education, organizational culture, management,
leadership, risk-taking capability, ecosystem support in educational
institutions, and institutional support in the Commercial,
Banking, Financial, Market and Legal institutional architecture of the nation the organization operates in. But
in addition to these, innovation and invention also needs one more aspect: a Bedrock, a base
of skill sets that combine to deliver excellence and performance. I
intend to look at all of these in turn, and in as much detail as space will
permit in this series. Reference material accessed will be found in the
bibliography section.
The MiniSeries
Approach and Proposed Layout
To illustrate the
points above, let us examine in this series, in very short summary form,2
examples – one from Robotics, another from Packaging, one from Supply Chains, and
a fourth detailed examination of a cluster, the Tirupur Textile Sector Story, one of the
most famous of successes {and failures, later on…!}. Incidentally, famous yes,
but also unknown… keep this in mind, we will come back to it later. I shall
also examine innovation and its nature basis theoretical concepts, specifically
Harvard articles as well as some good book resources. I shall subsequently go
into the factors identified above, in detail, post validation of the same.
The
Bedrock
Growth requires a
set of prerequisites, some of which are listed above. If you want to understand
Econometrics or Calculus, some basic grounding in related subjects like Math
and/or Economics is necessary; similarly, growth builds on current level of
capacities in the various fields. Pre-1991, the state of the capacity {as
opposed to potential} of our nation’s industrial landscape was such that
world-beating brands were frankly impossible; we just did not have the needed
bandwidth in any parameter.
And that is what has
now changed, which forms the fundamental core of my argument- that the past 28 years, despite the valid criticisms I
lay against them – have not been wasted.
Rather, they have been well utilized in building capability and capacity
in a variety of areas. The landscape of our nation has changed beyond
recognition – a range of examples can be put forward in support of this:
developments in technological competence in Nanotechnology, Robotics,
Blockchain, AI, Remote Sensing & IoT are just small examples of this; other
industries too have stood the tests and prospered in the face of competition –
Dairy and FMCG has strong examples.
I have picked on
Technology in all of these above example – the reason for that is that Growth
is fundamentally linked to Technological competence, and that is why this is
key. While the other factors are enablers, it is Technological Competency that
provides the bedrock, the core functional skill needed to excel in world
markets. One indicator to judge to above is to look at FDI Inflows sectorwise,
which shows a revealing story… the data shows FDI in Telecom, Mining and
Metallurgy, IT, Automobile, Power, Chemical
… and the bulk in Service Sector. This is an area
of concern – while we have benefited through FDI, Exposure and Technology Transfer,
yet have failed to pull in more in the Manufacturing Sector
The earlier policy
was not conducive to free technology transfer through trade for a variety of
reasons; it also retarded domestic industry. Post 1991, that changed; as can be
seen by the examples of Telco, Bhel, Pharma Companies like Cipla etc, Consumer
goods companies, Industrial Products organisations like Siemens and ThyssenKrup
etc, The Auto sector with most international brands having units here – and the
success of the Suzuki venture. Thus, this has resulted in a plethora of
consumer goods being manufactured – or assembled – in India. However, this is misleading,
as the Auto and Handset examples prove – the trend
is towards assembling rather than green field manufacturing.
Conclusion – for now
Despite that significant
caveat, there is no doubt that things have changed for the better. We now have demonstrated
capabities in several domains; we have acquired a range of skill sets not
present earlier. However, the key point that is evident from the small
discussion above is that somewhere along the line, we missed the bus. Why have we
not been able to attract greenfield investments and capabilities? More to the
point, why have not failed to capitalize on the
inward momentum and exposure we were getting and scale up the value chain? Let me give one excellent example to close- Kuka
Robotics India.
This is a Chinese
owned organization with a service and training center in India; but it has a
manufacturing location in China. Also, the Firm is historically a German Firm.
I cannot think of a better example to highlight the problem we are facing…. While the past 28 years have improved a lot of areas of
operations and industry, we are still missing key parameters, thereby failing
to attract the real juicy opportunities. To go deeper into this, I shall look
at the Tirupur Textile Cluster Case Study, and examine the success and failures
that emanated in the next article in this mini series, and draw some learnings
as to the reason for our collective failure, the reasons for which are not in
the Technology Domain, but elsewhere.
Bibliography
7. India Automated – Pranjal Sharma
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