NEW INDIA ON THE HORIZON
Nine out of 10 companies that globalize do it with a view to exploit new markets and make money. The only way for a company to globalize is to make money in the region and make money for the region which is the current philosophy of the GE chairman Jeffry Immelt and it sounds excellent. This means creating a win-win situation for the company and the region.
The nationalism must be totally replaced by globalization which is possible by the aforesaid philosophy of region & business. People are afraid and see globalization as they apprehend that they may be losers and in fact it is not so. Business chiefs should talk of what is good about globalization and must ensure that the markets where they set up business in different geographical areas or countries of the world remain productive and competitive and they remain profitable in the process, not to forget the benefits to the region.
And this is what is now promoting GE to revitalize its Indian strategy. GE wants to invest in infrastructure in India and will focus on India not just as a technological provider; but as an infrastructure financer as well.
For instance, after the resolution of the Dabhol Power Project issue, GE reinvested all of its proceeds $145million in Indian infrastructure projects and in equity stakes of projects sponsored by GEâ€™s strategic customer. GE is now pumping in an additional $100million into its India development Fund.
That apart, GE is set to dramatically increase its footprint in financial services in India, especially in the consumer finance business and real estate lending and leasing. It is also keen on entering the Indian banking sector.
GE is also going to invest significant time and R&D efforts in creating products and services specifically for the Indian market. They strategize the need to reorient technology efforts and work force to work on products specifically for India. This would translate into high value, low-cost products suitable for emerging market consumers- such as value-saver ultrasound machines and CT scanners, low-cost water desalination and water reuse equipment.
GE has grown significantly in both the markets of India and China over the last 10years. They are both very important markets for a company like GE which they have shown by their all round presence in both the countries.
Both represent an interesting paradox: while China needs to fix micro issues like the immature financial system, it is strong on the macro parameters like infrastructure. India on the other hand, needs to fix the macro issues. India is strong on commerce and entrepreneurship but loses out on bureaucratic hurdles. This is how the Global companies differentiate between the two.
GE chairman says that a new India is emerging. The clues are showing in a strong manufacturing base emerging in India and a growing, demanding middle class in smaller cities as well. Economic growth in India has reached a high 8% and there will be a compulsion to change things to sustain this. No doubt that India has ushered in real Globalization or participating outside in other countries of the world making their contribution as coined by the GE chairman that is â€˜Business profit-Benefit to the regionâ€™.