In a globalized world, the national identity of companies is no longer an issue. To the contrary, national champions risk being left in the dust by competitors that know how to focus on what really matters. What they might lack in national prestige, they make up for in innovation, by dealing with external change and the ability of managing core skills and resources, by working on long-term objectives.

  The Indian economy is a classic case of the slow decline of giant public enterprises which dominate until the 90s. In 1991, with economic liberalization, everything has changed and private entrepreneurship has blossomed. For the first time, public enterprises and national champions have been exposed to actual competition. The perception of state-owned enterprises has changed. While they had hitherto been seen as indispensable drivers of national development and prosperity, they have now seen their role reduced to few key strategic sectors.

  Maruti Udyog Limited, a joint venture between the Indian government and Suzuki, is the biggest carmaker in India, with a market share exceeding 50% of the domestic market.  The majority (54.2%) of shares are held by the Japanese, but the company has long maintained the status and the prestige associated with being one of the national champions of the Indian economy. The automobile company, which has long received preferential government treatment in terms of subsidies, supply sources and distribution channels, is famous for having churned out the Maruti. For many years, the Maruti was the only cheap car available on the Indian market, and its sales have propelled the growth of the company. Have Indians benefited from this? Only partly. It is true that before the Maruti was launched in the 80s, Indians could only buy the ugly Ambassador manufactured by Hindustan Motors. But a market open to foreign car manufacturers would have significanly increased choice for Indian consumers.

  Maruti Suzuki is still in the black, but it has lost market share to other national and foreign brands over the last five years. The status of national champion provides a sheltered environment that discourages innovation and radical thinking. The biggest threat to Maruti Suzuki and to its bestselling model, the Maruti 800, comes from Tata Motors, which has just launched the Nano, the one-lakh car (a lakh is 100,000 rupees or $2,500), to worldwide acclaim. In fact the Nano costs only half as much as the cheapest Maruti model. In India, a country with a burgeoning middle class but also with huge numbers of poor people, the Nano is poised to bring billions of rupees to Tata's coffers. And it could radically change the global auto industry. In spite of its still dominant position, Maruti will now have to play catch-up with Tata. The latter also grew on the domestic market, but "the world's cheapest car" could only be made possible by globalization. The Nano could change the lives of millions in India, as well as in Africa and Latin America. Tata Motors, never a national champion, is now a global player thanks to its investments in new manufacturing technology.

  The lesson to be drawn from the Indian car market is that national champions are not needed to bring benefits to local consumers or the national economy. Companies that do not innovate and provide inferior service cannot be a source of national pride and do not have the potential to grow globally. Summing up, national identity does not improve performance, no longer attracts the public, and does not warrant long-term success.