Indian firms need to hold themselves accountable to global standards of corporate governance if India wishes to re-shape the global economic order, Aditya Birla Group Chairman Kumar Mangalam Birla on Tuesday.
The core business philosophy is rapidly moving away from shareholder capitalism to stakeholder capitalism which includes investors, customers, employees and chain partners, he said at an event in New Delhi.
"For India to reshape the global economic order, Indian companies will have to hold themselves accountable to global standards of governance. I believe this cannot happen by running roughshod over minority shareholders," Birla said. Issues such as professional chief executive officers acting as promoters and founders wielding undue and disproportionate clout also need to be addressed, he added.
According to Birla, stakeholders are increasingly demanding higher accountability and and businesses will have to earn their licence to operate in society as a whole.
"As ease of doing business improves, the way of doing business needs to change... If we want to make our mark in the world we have to be prepared for the world to leave its mark on us," he said.
There are various sectors in India which have the potential to grow into billion-dollar businesses over a period of time. "There is one severely under-exploited sector, and that is tourism. Only 11 million foreign tourists come to India annually. This is roughly the same as Bali and possibly close to half of what Barcelona gets," he said.
If Stonehenge in the U.K. can get close to million tourists in a year, the historic world heritage sites of Hampi and Gaya and Ajanta Caves have potential to get 10 times more, he added.
"Tourism alone, I believe can be a $100 billion industry. Same is the story with various sectors in India. The country for example can be centre for development of healthcare solutions, in the digital domain India can generate trillions of data points due to its sheer size and hence it could position itself as a hub for data analytics industry.”
So, from tourism to healthcare to data sciences, the sheer scale of Indian economy will ensure that India's imprint is felt on the world, he added. "It will be a two-way engagement with the world, global companies will seek to harvest India's growing and robust consumption market which is slated to cross $6 trillion in the next 10 years.”
Commenting on global trade, Birla said that globalisation is here to stay.
"The current climate of protectionism and trade friction will make you believe that globalisation is under retreat. I don't believe so, I believe it is a process and trend that is irreversible," he added.
Not many would be aware but just two weeks ago a Made-in-China cruise liner was delivered to an American company," Birla said. "So despite the chatter, the fact is that bilateral trade between the U.S. and China even this year will be close to $600 billion. So the wheels of globalisation are definitely not coming off. Global trade in fact is increasing at a pace of 3-5 percent every year.”
However, at the same time it is very evident that the world is now witnessing growing nationalistic sentiment as well, Birla said. "So how does one reconcile the apparently divergent trends of globalisation and nationalism? I want to propose a new model of globalisation—one that is founded on openness, transparency and mutual trust.
A model where compulsions of commerce do not obliterate national identities, where globalisation is not just about foreign market share. I call it nationalism without barriers. I believe, we the corporates can show the way."
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