First, it was Japanese electronic products and precision instruments that str­uck the world. Now, one can be in any part of the world and easily find hoardings and products from Samsung, LG, Acer, and Asus. How surprising that some of the biggest consumer electronic and computer brands in the world are coming from small Asian countries. It must be a revelation to find out how in a relatively short period of time these companies from small nations and without much comparative advantage have become bigger than the biggest companies in India. All of these are privately owned and are known for their cutting edge technologies. Seldom do they bank upon domestic demand, which may simply not exist given the size of the country.

Comparatively, no Indian consumer goods company comes closest to this kind of global brand recognition. Not even Tata Motors or Tata Tetley. Nano can be a match winner, but it is still largely unproven and untested even in domestic markets.

Although we are known for outsourcing, yet no Indian company comes close to any of the companies such as Indian Oil, Reliance Industries and State Bank of India in terms of assets size or turnover.

This must be worrisome given that global competition is entrenched in India and ours is a globally integrated and inter-linked economy with the rest of the world. The recent slowdown showed it up clearly.

To get a broad picture of where our firms stand in terms of global competition, we can imagine two types of broad industry clusters. The first is asset-heavy, such as oil and gas, mining and metals, basic goods industries (fertilisers and chemicals), heavy equipment industries such as earth-moving, auto, pharma (generics), cement, infra-construction, banking and power. The second type is the asset-light cluster, where the investments are primarily in knowledge, innovation and brand recognition. These are industries such as consumer goods (brands and distribution), electronics hardware and software, light machinery components and pharma (patented drugs).

The Fortune 500 list gives us some important insights on Indian firms’ global competitiveness on these two categories. The first cluster requires tangible assets such as size, economies of scale, and financial muscle; the second cluster’s success depends on intangible assets such as creative talent, brands, proprietary technology, innovation and localisation capability and global distribution reaches.

We looked at just five Asian countries to understand where the competition was moving.

Chinese firms, as expected, are moving fast and systematically to achieve mass, muscle and scale in heavy assets industries. Smaller adjacent nations including Japan, Taiwan and South Korea are much ahead of rest of the world in second cluster — Samsung, LG and Hyundai to name a few. Our indigenous firms neither match strengths with our Asian counterparts in assets or intellectual property. Indian companies can easily be whacked from both sides.

In terms of strategic implications, the more efficient but smaller Indian firms are most vulnerable as acquisition targets by global champions. These ‘local’ champions will provide cheaper and readymade access to huge Indian markets and also be excellent base for outsourcing and global manufacturing for the acquiring companies. The buyout of Delhi-based Indo Asian Fusegear by Legrand of France is an example, whereby the foreign entrant gets ready access to the Indian market in the electric swit­chgear business.

The other choice for Indian firms is to gather mass and muscle and scale up quickly.

The asset-light businesses must shore up their R&D skills and come up with products that can be sold in global markets. This requires risk upfront and specific skills to operate in global markets. Not to forget, speed is of essence – in the fight for survival between the tiger and deer, the one that can run faster will live to see another day.

The ideal situation is when a company has size, scale, reach, and intangible assets such as brands, proprietary knowledge or innovation capability.

It is not too late. The government, business chambers and firms must sit down and draw up a time bound strategy to create true global competitors. The issue before the Indian business leadership is not (lack of) strategies, or level-playing field industry structure, or even government policy. It is purely a question of hunger and fire in the belly. The aspirational and vision deficit is remarkable. We get satisfied rather too quickly and by very few real achievements despite talent and potential. Sania Mirza is a classic example. Should our companies remain satisfied with World No.32? Or should they have Vishwanathan Anand and Saina Nehwal as role models?