'Consumers uneasy with immense size and power of big biz'

Davos: With less than 10 percent public companies globally accounting for 80 percent of the entire corporate profits, business leaders including India's Sunil Mittal today acknowledged that consumers are increasingly becoming uneasy with the immense size and power of big firms.

Discussing the 'future of big business' at a WEF session here, the leaders also said that big corporations are being challenged to manage their size, create new products and also contribute to the society.

"That we are discussing this topic today is a clear message that something has gone wrong in the last 10 years. Suddenly, we have started to question: Is big good or not?," Bharti Enterprises Chairman Sunil Bharti Mittal said.

The panelists noted that recent populist votes in the US election and Brexit reflect a criticism of big business.

"The biggest risk we run is to lose our mandate. We had a licence for a time, society wanted companies to grow; that mandate is getting weaker and weaker," Credit Sussie CEO Tidjane Thiam said.

According to the panelists, big businesses need a new narrative that articulates its contribution to society.

"What percentage of the world's companies have 80 percent of the jobs? That's the narrative. SMEs are thriving around us, every job I create makes another five," The Dow Chemical Company Chairman and CEO Andrew N Liveris said.

Some panelists noted that creating environment where innovation will prosper in gigantic companies tends to spawn new structures.

"Our number-one priority is leveraging the benefits of scale and size - that goes against trying to maintain entrepreneurialism and innovation in large companies," WPP CEO Martin Sorrell said.

He said a company can be split into units but then "the challenge is to figure out how to get them to work together".

"We are continuing to invest for the long run. Unless you stay focused on innovation, you can be disintermediated," Alphabet Senior Vice-President and CFO Ruth Porat said.

Mittal said that subsidies for small business will become a force for change.

Sorrell said that since the financial crisis of 2008, "there has been more emphasis on short-term performance because the system is focused on the short term".

Porat said: "Incrementalism leads to irrelevance; the short-term view is the problem."

Even though industry leaders in the panel agreed that the phenomenon of gigantic corporations is here to stay, some expressed the view that shifts are in sight.

Liveris said things are heading to a world where companies will be like nation states.

Ten years from now, several panelists predicted, that even fewer companies will generate a higher proportion of profits than today while new forces, however, could alter this landscape.