Still to go global…

The Fast
Track Leadership survey and Infosys’ quarterly results announcement. Two very
different events, but with a common thread.

Let me take each
separately. According to the Fast Track Leadership survey conducted in November
2005 by Fast Company magazine, IMD (Switzerland-based international business
school), and placement and consulting firm, Egon Zehnder International, which
included responses from over 847 business professionals, less than 50% believe
that their companies are well equipped to handle competition from countries such
as China (46.8%), India (49.1%), and South Korea (49.5%). Another question:
“In the next five years your company will face strong competition from
businesses based in” also showed similar results. Another piece of data. Three
Indian companies, Tata, Infosys, and Wipro were among the top ten when
respondents were posed this question: “Name a company with its headquarters in
an emerging market that you admire”. It is good to see Indian companies
causing a ruffle among global business execs and it is not a coincidence that
the three companies mentioned, are leading IT companies.

Indian IT companies have got
global recognition despite infrastructure limitations. I wonder what would’ve
happened if we had the infrastructure in place

The poll is also
validated by the global stock market. Look at the market cap of top IT services
companies during the previous year. While IBM is still the ‘Badshaw’ with a
market cap of $129 bn, as of December 2005, the Indian trio is in the top five
slots. Another interesting facet of this data is that the Indian trio has shown
a double-digit growth rate in the market cap for the whole year. While IBM and
EDS saw a decline in their market cap by about 20% and 3% respectively, other
giants such as Accenture and CSC posted marginal gains of 2% each. It has to be
mentioned that the revenues of Indian companies are below $2.5 bn, while those
of the global companies are in excess of $14 bn.

Now what has this data
got to do with Infosys’ results? It is not about Infosys coming out with
another sterling performance of a 31% jump in third quarter profits or that it
expects a similar growth rate in the coming quarter. No, this is about Bangalore.
During the press conference, Nandan Nilekani, CEO and MD of Infosys mentioned
that they have no room to expand in Bangalore and future expansion may not
happen in the silicon valley of India. This comes a few days after the Infosys’
chief mentor NR Narayana Murthy remarked that Indian companies can look at
moving out of India. He mentioned that despite growing rapidly and creating huge
employment opportunities, India continues to lag behind in the world network
readiness index. At 39th  rank,
India needs to take urgent steps to upgrade power supply and airports, or
else… Given the global branding that Indian IT companies have achieved,
countries across the globe including South Korea, China, and in Europe are keen
to invite Indian IT companies to set shop.

What I find interesting
is that the Indian IT companies have got global recognition despite
infrastructure limitations. I wonder what would have happened if we had the
infrastructure in place. Global execs will start looking at various segments
such as auto ancillary, textiles, et al which will pose serious threat to their

The irony is that all
are aware of the grim situation, including the decision makers, yet things are
not moving or at best chugging at snail’s pace. Take the Bangalore Airport
logjam. Five long years wasted and even basic work has not started. And such
examples are strewn across the country and across various projects.

I want to hope, against
futile hope, that in the many more such surveys like the Fast Track Leadership
survey, I see the number of admired Indian companies on the rise and companies
in India emerging as global corporations, but…

Yograj Varma, associate editor, Dataquest

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