SITTING ON MARUTI SUZUKI CEO AND MD Shinzo Nakanishi’s otherwise spartan desk is a Ganesha idol. It’s roughly four inches high, made of silver with a hint of gold, and costs around Rs 40,000. Down the ages, Ganesha has symbolised prosperity. This one, however, is emblematic of globalisation. It’s an idol of an Indian god, made in Italy, on the desk of a Japanese who heads one of India’s most successful joint ventures.

But you needn’t visit Maruti’s headquarters in Delhi to see the signs. The Fortune Global 500 list, the definitive ranking of the world’s largest corporations by revenue, tells the story equally convincingly. The Global 500 in its current form was first published in 1995, and over the last 15 years, the one obvious feature of the list has been the number of new firms which have made the cut and the countries they come from.

In 1995, 25 nations, including India, were represented by their largest companies. In this year’s list, published in July, there are nine more. They are Denmark, Ireland, Luxembourg, Malaysia, Poland, Russia, Singapore, Saudi Arabia, and Thailand. They have contributed anywhere between one company (Luxembourg, Malaysia, Saudi Arabia, Thailand) and six (Russia).

This underscores the larger story of a global power shift—the stagnation of developed economies and the rise of new ones, led by China. In 1995, the U.S. had 151 companies on the list. In 15 years that has fallen to 139 (see graphic 1). For Germany the dip has been from 44 to 37, Britain from 33 to 29, and France 40 to 39. Europe’s overall contribution, however, has increased: from 171 to 183. The reason: companies such as Gazprom (Russia) and PKN ORLEN Group (Poland) have made the cut. Many are from erstwhile Communist countries.

Despite America’s decline on the list, global revenue percentage share for the U.S. has stayed constant over the 15-year period: from $2,939 billion (Rs 133 lakh crore) in 1995 to $6,977 billion in 2010 (graphic 2). During this time, Europe, and more notably Asia, grabbed large bites.

The biggest story among the developed countries is, of course, the fall of Japan. Mitsubishi, Mitsui, and many others were on top of the list in 1995, fuelled by the highs scaled by the yen. With 149 companies, Japan was second only to the U.S. By 2010, its numbers more than halved to 71.

Surjit S. Bhalla, managing director of Oxus Research and Investments, a Delhi-based economic research and advisory firm, believes the 1985 Plaza Agreement was the start of Japan’s dramatic decline. The U.S., the U.K., Japan, France and West Germany at the time had agreed to depreciate the dollar against the yen and the deutsche mark, which, among other things, had aided Japan’s ascent. “The exchange rate ultimately played a big part in this period,” says Bhalla.

What the Land of the Rising Sun lost, China gained. The share of global revenue shows that Japan’s slice was nearly 15 times that of the rest of Asia in 1995. But by 2010, there was a reversal. China’s domestic output grew at more than 10% for seven of the 15 years (graphic 3); and its share in the Global 500 rose from three firms in 1995 to 46 in 2010 (graphic 4). Sunil Sinha, head and senior economist at rating firm CRISIL, says, “China reached this level of domination because the government kept the currency undervalued.”

L. Michael Cacace, senior list editor, Fortune, says that by 2012 the number of Chinese companies on the 2012 index will be 75 and between 100 and 110 by 2014.

That’s why RIB is the new BRIC. A look at the 50 biggest firms in Brazil, Russia, India and China reveals the lopsided nature of the moniker. China towers over the other three with 35 out of the 50. It is flattering for Russia, India and Brazil to be in company such as China’s. Even the revenues of the Chinese firms are nearly 2.5 times the combined revenues of the others.

While Chinese firms have held sway with their high profitability (graphic 5), they are also the most diversified on the Global 500. The others, in comparison, not only have lower representation, but span fewer sectors as well.

India’s count started increasing from 2004, the first year its GDP grew at 8%. Scale (or the lack of it) in India, compared with China, has meant that IOC has topped the Indian pile comfortably for the past 15 years. Meanwhile, Bank of China, the largest Chinese firm in 1995, has been overtaken by nine companies, even though its revenues jumped from $15.3 billion to $49.7
billion over the period.

But there is one area where India is ahead of China—per person productivity. Going by data from the top 50 companies in BRIC, four Indian entities are in the top five in terms of revenue per employee (graphic 6). Also, comparing sectoral giants within the bloc (graphic 7) it becomes evident that Sinopec, with more than 17 times the number of employees as IOC, rakes in only around 3.5 times the revenue of India’s petro major.

Irene Mia, an economist with the World Economic Forum believes India has greatly benefited from its culture of private enterprise and the resulting competition has helped it manage efficiencies better.

James Z. Li, chairman and CEO of Shanghai based investment bank E.J. McKay & Co., attributes China’s low per person productivity to the legacy of pre-corporatisation days, when companies had to recruit Communist Party workers and ended up with bloated employee numbers, though that should change over some time.

The story of the dragon and the elephant has the world riveted. Fortune’s global lists are a good place to follow the twists and turns.

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