Jaipur: Rajat Gupta, senior partner (worldwide), Mckinsey & Co, has said that to earn "the right to be called a superpower," Asia must create globally successful companies.
"Asia is expected to contribute over 30 per cent of the growth in world gross domestic product over the next five years, but merely contributing significantly to the global economy is not enough," said Gupta, addressing the delegates at the AdAsia 2003 here yesterday.
"What Asian companies need are truly global strategies, and not just international expansion tactics. Locally successful companies like Tata Motors must become globally competitive, because if they don't, their arena will be captured by established global giants."
The world economy is globalising, and the rules are different in an economy without geographic borders, he added. "Also, with increasing capital market and geopolitical volatility, including the threat of terrorism, only the truly global companies can withstand and be resilient to setbacks."
Among the top 2,000 global companies, including ICICI Bank, there are 238 'global leaders,' which have a strong global position in terms of a geographic footprint, market capitalisation and the ability to compete globally. There are 59 'global champions,' which are larger, constantly deliver profitable growth and are resilient, Gupta said.
But besides HSBC, Samsung and LG, the majority of global champions are from outside Asia. However, there are several global contenders in the Asia-Pacific region, including Petronas Gas in Malaysia, Hutchison in Hong Kong, Hyundai in Korea, and Infosys, Ranbaxy, Reliance and Wipro in India, he added.
"The globalisation journey is long and risky, and can take 10 or more years," Gupta cautioned. "What it takes to be a global champion is long-term commitment, a sustained effort and systematic investments."
Most Asian companies have been unable to go global because of a lack of global competitiveness, an ill-equipped local workforce and management culture, and a lack of organisational sophistication and limited global ambition among senior management, he said. "Companies must, therefore, build a foundation with a strong and stable home market position, high-quality operations, and distinctive capabilities which can be codified and transferred to other businesses or geographies."