“To those who have everything, more will be given” is an oft-cited phrase from the Bible . Now we’ve got Forbes magazine’s word for it too that the richer still are getting richer despite various economic tornadoes sweeping the globe.
“Seemingly as inevitable as death and taxes, the rich once again have grown richer,” observes Forbes in its Richest 400 list of the richest Americans. This year’s Indian Rich List also has been true to form with the rich amassing more wealth even though the rupee’s been sliding.
Take Mukesh Ambani, who’s again Asia’s wealthiest man. He’s now worth $47 billion compared to $40.1 billion when Forbes put out its 2018 global billionaires list in March. At that time Hua Huateng, better known as Pony Ma, of China’s powerful Tencent, led the way in Asia with $45 billion. Ambani has also overtaken Alibaba’s Jack Ma who was worth $39 billion back in March and who’s just announced he’s retiring in a few months.
A handy guidepost
Let’s put in an observation right at the start. There are many who believe rich lists reflect a frivolous interest in how the 21st century plutocrats live and play. Far from it. Rich lists offer a handy guidepost to the latest world economic themes. For instance, wind the clock back to 1987 when the first Forbes Billionaire List came out: at that time Japanese corporations looked set for global domination and Tokyo real estate was soaring.
The world’s richest man in 1987 was Japanese real estate baron Yoshiaki Tsutsumi who was worth just $20 billion. Incidentally, today, he’s off the billionaire list and just escaped a jail sentence. Japan grabbed six of the top 10 spots in the 1987 list and, most remarkable of all: There were no Americans at the top.
The decline of Japan began in the mid-1990s and in its place came the tech revolution and the reign of Microsoft’s Bill Gates who topped the list for 18 years. Then, around 2008, it looked like the Third World infrastructure giants might be next to seize the crown and indeed Mexico’s Carlos Slim, who owns a telecom service provider, did just that but only for one brief year.
The tech titans have got a staying power that’s proving tough to shake. But now that tech’s moving rapidly into uncharted waters, new names are being thrown up. Just a short two years ago, Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg didn’t quite make to the Forbes Top Ten. Today, Bezos tops the list and is worth an extraordinary $160 billion. He’s climbed an amazing $78.5 billion in the last year. Zuckerberg is in fourth position with $61 billion and that’s even after Facebook’s shares have taken a battering on the market.
Who are the tech stars of the Indian Rich List? Clearly, Vijay Shekhar Sharma who’s Paytm, now valued at $2.15 billion, is moving from strength to strength. Other tech stars to keep an eye on are Bhavin and Divyank Turakhia who are worth $1.5 billion and who sold ad-tech company Media.net for $900 million and a web-hosting company for an undisclosed price before that.
Now, they’re running a clutch of companies in red-hot fields like web hosting, cloud infrastructure and advertising. They’ve also moved to Dubai. Also on the list is Sridhar Vembu the founder of Zoho, which creates cloud-based business software. Vembu is worth $1.6 billion.
Does India make the grade in the technological companies that are going to own the world in the coming decades? Take a look at a list compiled by Comparethemarket, a UK-based price comparison website which has listed the world’s unicorns (which have a valuation of $1 billion).
Unsurprisingly, on this list, the US leads the way with 114 unicorns, followed by China with 70. In third place but far behind is the UK with 13 unicorns. Encouragingly, in fourth place is India with nine, including local stars like Paytm, Ola and OYO Rooms. Israel and Germany have four each. The average time it takes to reach a billion-dollar valuation is seven years, according to this list.
Start-ups on the rise
Glance for a moment at the Forbes 400 which looks at America and it’s evident start-up software companies are starting to call the shots. Dropbox, which listed in March and which is a file hosting service company, was worth around $12 billion in August. Dropbox founder Drew Houston is now worth $2.7 billion according to Forbes, not bad for a company founded in 2007.
Or look at Ripple, which deals in cryptocurrency and blockchain. Ripple founder Chris Larsen is now worth $7.5 billion. Earlier this year when cryptocurrency fever was raging, Larsen had touched an estimated valuation of $20 billion briefly. But the star of cryptocurrency is Changpeng “CZ” Zhao, a Chinese-Canadian — his cryptocurrency exchange Binance became the largest in the world in just six months. Binance can carry out a staggering 1.4 million transactions a minute.
Despite bitcoin’s battering, Binance, expects to bring in as much as $1 billion in profits in 2018 alone, CZ told Bloomberg recently. In what may become a model for the future, CZ doesn’t have a headquarters and in January he was holed up in Taiwan. The company has just bought Trust Wallet, a cryptocurrency wallet app.
India still lags far behind when it comes to cryptocurrency, not surprisingly as we’ve banned it. A government committee is looking at how to tackle this rising area which the Reserve Bank fears will be used to launder money. But one company, Unocoin, has just opened a cryptocurrency ATM. It argues cryptocurrency is not included in RBI regulations because it doesn’t need a banking network.
India’s strength has been that it has billionaires across a range of industries from cement to tyres and even bathroom fittings (think Jaquar). Also, there are the software services stars from Infosys, Wipro’s Azim Premji and HCL’s Shiv Nadar. In pharmaceuticals too, we play a key role around the world.
But can India create the enabling environment to incubate enough tech stars who can embrace rapidly advancing technologies from digitisation, artificial intelligence to cognitive computing. That’s the crucial game that will unfold in the coming years and determine whether India will be a tech laggard or leader.