Thursday, September 20, 2007
Mutinationals in India- How is life-Part-1
Multi-National Corporations and India: Kabhi Khushi, Kabhi Gham
Various MNCs’ contribution to India’s industrial development has been a very mixed blessing. The entries of all hues of MNCs have made the industrial development scene even more uneven and patchy. However, the scene is changing faster than ever, and I suppose it is just a short time before even this picture changes significantly. In this articles, besides MNCs assembling or manufacturing industrial as well as consumer goods in India, I have counted in small foreign companies manufacturing or only collaborating in India; and MNCs and small foreign companies who have only set up marketing, sales and service networks in India. Let us examine this from various aspects. THE CONSUMER is having a gala time, so says everyone. The open-door policies and the entry of MNCs have totally transformed India from a seller’s borough into a buyer’s market. Washing machines which really wash whitest, detergents which work, computer monitors that are easy on the eye, energy-saving light-bulbs, capability-packed servomotors, excellent pneumatic hardware, and the most noticeable of them all: so many swanky, fuel-efficient and much safer cars. It did begin with some dumping of outdated designs in India, but the competition among the MNCs themselves soon corrected the picture in the consumers’ favour. Nevertheless, the Indian consumer is demanding and ignorant at the same time, and he often pays dearly for his ignorance. There are pockets where the MNCs have left the consumer out of the loop. Take the case of toothpastes. The best way to clean your teeth is not with toothpaste at all, but with a water pick, or a water jet. No one has yet brought personal water jet dental care to India. An electrocuting mosquito killer actually works better, yet allethrin based repellents do a multi-billion Rupee business in India. More the various mosquito species become resistant, more these businesses grow. Not a single MNC-made car user’s manual tells the user to lock ALL doors while driving, which can actually save your life in a collision. The doors, when locked, are designed not to fly open upon impact, so the passenger space resists collapsing. Yet no one tells the consumer, not even the private insurance MNCs, the direct losers in this case. On the contrary, practically every ad for cars and two-wheelers spurs you on to drive even more recklessly. The industrial consumer is in a flux too. Excellent high-tech machines, parts, sub-systems and consumables used by the industry are coming in, but no appropriate information system is in place to quickly bring the industrial consumer and supplier together – the way it can be done in developed countries. Those who are into distributing this information frequently have the data organized in such a higgledy-piggledy way that it is not at all easy to use. For all our IT and telecom explosion, we still are exceedingly poor at disseminating essential information to the buyer. This is putting a wet blanket on everyone’s progress. One of the bad cases of communication gap is between mechanical engineer buyers/users and MNC makers/sellers of electromechanical products like servo-valves, PLCs, stepper motors. Their product manuals are one of the most user-unfriendly. On the other side, the standard Indian reaction to anything new and better is to denounce it first, giving very technical-sounding “knowledgeable” explanations. When MARUTI made its appearance, it was dubbed “absolutely flimsy”! When radial tyres came in, they were “totally unsuited for Indian roads and damaged the suspension.” When ELCBs came, the electricians (who otherwise use copper wires as fuse) would not trust them. When washing machines came, they “tore up the clothes.” People still put a screen in front of today’s low-radiation monitors, and keep the brightness so low that they constantly strain their eyes. Engineers still can’t believe that pneumatics run better on dry air. Many companies still courier or post a printout of every email they send. This attitude of the “educated” middle class has killed (or seriously delayed the success of) many a good products from abroad. And the market is flooded with junk food and trashy “Designer” stuff from competing MNCs, who know that the quickest way to the Indian consumer’s wallet is either through his stomach, or through his vanity. It is easy to sell trash to new gullible buyers, but unless you offer real value for money, you do not survive for long in a buyers’ market. Generally, we will see better designs from abroad only after we buy the bad stuff for some time. Cynical, but true! In reality, if the MNCs do some in-depth, cool-headed, objective consumer research, they AND the consumer will both benefit.
Written By: Mr.Harshwardhan Gupta, is a graduate of I.I.T. Mumbai in mechanical engineering. He has been designing machines for the last 27 years. He founded Neubauplan Machine Design Studio, an independent consulting machine-design firm in 1981 in Pune. E-mail