In the title bout of 21st century business – India versus China – China is way ahead on points. With vastly higher exports, energy production, foreign investment and infrastructure spending, it has a weight advantage India cannot hope to match. But India has one thing in its favour: the genius of its business leaders. Smart, ambitious, forward-looking, eager to learn, they are India's potential knockout punch.
Forbes reported recently that, for the first time, India has more billionaires than Japan, the usual Asian leader in the magazine's annual list. India has 53, up from 34 the year before. Four Indian billionaires are on the Top 10 list of the world's richest people, more than any other country can claim.
That's an extraordinary fact all on its own. India was an economic washout just a generation ago, its industries and businesses stifled by decades of government overregulation. Even today, India is a poor country where more than 300 million people live on less than a dollar a day. Yet, at the top end, Indians are accumulating wealth at a pace that puts even the Japanese in the 1980s or the Chinese in the 1990s to shame. They aren't shy about it either. The country's richest man, Mukesh Ambani, bought his wife, Neeta, a $60-million (U.S.) Airbus airliner for her 44th birthday, complete with satellite-TV and custom-fitted office.
What's most impressive about India's new tycoons isn't their sudden wealth, though. It's the way they are taking their companies, and in the process their country, forward. The companies they are building are not just big, bold and brawny in the Chinese model, but smart, nimble and surprisingly modern.
I was lucky enough to talk to some of them during a recent visit to India to write the series of profiles published in this section last week (see Made in India at http://www.reportonbusiness.com/managing). With the openness, charm and eloquence that is characteristic of Indians, each sketched out his vision of the future. Consider just two of them.
Ratan Tata, father of the world's cheapest car, the Nano, is taking his company international. One of India's oldest business houses, Tata Group has hit the headlines with the big-money acquisitions of Tetley Tea, the Anglo-Dutch steel company Corus and the high-end auto brands Jaguar and Land Rover.
Mr. Tata doesn't like to call his company “global,” a “somewhat pompous word” in his view. He doesn't see Tata as some kind of national champion for India, either, and despite the splash made by the Nano, he doesn't expect Tata to become a global brand like Sony or Coca-Cola.
What he does want to do is see India think big, in the same way China does, about what it can do. The Nano was a way of thinking big by thinking small, achieving something that no one thought was possible: a stripped down ultracheap small car, selling for just $2,500, the price of the audio system on some luxury autos. That has set a standard for creativity and thrift that other companies are rushing to imitate, not just in India but around the world.
His ambition is simply to make Tata one of the most admired companies in the country. He deliberately says “admired” rather than “successful” or “profitable.” His greatest fear is that, as Tata grows and he moves off the stage (he just turned 70), it will succumb to temptation and lose the strict values and ethics (it refuses to pay bribes) that guide it. “I think the day we do that we have lost everything,” he said.
Azim Premji shares that vision of a bold, innovative, ethical company. He built one of Indian's leading information-technology outsourcing companies, Wipro, out of his father's stumbling vegetable-oil firm. Now, with other low-cost countries competing for the outsourcing business, he is trying to find ways to keep Wipro growing.
What impresses most about his Wipro is its discipline and its modernity. Though he never went to business school, Mr. Premji has imported all the best and latest management techniques. He encourages managers and employees to share all possible information with each other and to disagree openly with higher ups, something that goes against the grain in hierarchical India. He invests heavily in training and retraining, fosters innovation and excellence, rewards success with stock and other bonuses and keeps a tight rein on costs (managers fly economy and often stay in guest houses or company suites instead of hotels). The result is a lean, smart, progressive company that few in China could match and that many in North America might envy.
It happens that both men are major philanthropists. The Azim Premji Foundation has a proud place on the company's Bangalore campus. Using proceeds from his $17-billion fortune, it invests heavily in improving village education. Tata's charitable giving is institutional, because two-thirds of the stock in parent company Tata Sons is in the hands of charitable trusts.
Admirable? Certainly. But the real contribution that Indian tycoons such as these two are making is through building flexible, responsible modern companies. With men like these behind them, India may land the last blow.
