Emerging markets comprise the single largest potential source for long-term corporate growth, but they also present unique challenges. The main risk is to overcome the current difficulties stemming from established practices and create a lasting impact.
For example, in India, government policy is critical to establish a national technology policy, and local companies must develop an R&D pipeline to meet the government’s requirements. Policy should also enable a more rational public–private partnership, with foreign-direct investment players potentially benefiting from the ability to access local talent and to provide them with technical and clinical skills.
The developed world is under pressure to more effectively manage resource constraints, with more and more maturity coming to the fore. The world could more effectively use its natural resources, such as water and land, or similarly talent leading up to the 2020 economic contraction, for the development of a range of products and services. However, gaining access to resources, otherwise assumed abundant, is becoming a highly competitive marketplace.
Establishing top-down commitment
The development of a range of new products and services in the developing world could increase the rate of growth of business opportunities for the country. These include: urban services, digital services, and education.
The main obstacles to growth in emerging markets are short- and long-term challenges. Many of these challenges are unique to the developing world and may not be solved by foreign new entrants. The challenge for global business leaders is to identify and focus on the opportunities that will deliver the highest returns and make these opportunities profitable. The opportunities could come from within and outside the region — hence, imperative not to solely focus on the goal of foreign expansion.
The business of business development
Dynamic resource prices and rapid economic development are changing the economics of a wide range of industries and business practices.
In developing markets, capital investment, particularly from foreign-held entities has increased considerably in recent years as companies in many sectors have sought to diversify their businesses and capture new opportunities.
Many firms are setting up new regional operations or establishing new sales territories for pipeline development. They are also considering expanding their footprint across borders. And many are making large technology investments to improve their competitive advantage.
Yet at the same time, many companies are discovering that these opportunities are not as attractive as they once were.
There are risks to be managed—for example, capitalizing on new technologies to improve business models.
Business leaders also need to develop a clear and long-term vision for the market they want to address. And they need to make a disciplined, deliberate approach to identifying and pursuing attractive opportunities.
We’ve identified the common denominator among high yielding foreign operations has been visibility through data-driven customer and market engagement.
Get in touch to learn how we can deliver an actionable and insightful data pipeline with key metrics to empower your remotely managed teams and provide visibility throughout management.
Managing value in emerging markets
The economic and social promise of emerging markets is far from being realized. Many of the nations that do emerge as fast-growth economies over the next ten years will not fully develop their human and financial resources to established benchmarks. Companies that are able to capture this opportunity will likely earn a significant first-mover competitive advantage over their competitors.
Still, a number of companies are evaluating the potential of these emerging markets. To reap the full value of them, however, they must develop a clear and detailed perspective on them, one that is based on a fact-based understanding of the dynamics and growth potential of the people, processes, and political institutions managing socioeconomic frameworks.
This perspective should, for example, include the following four key areas:
— the generation of highly-skilled workers, the training of the workforce, the established real-estate landscape, and the provision of a high-tech portfolio.
The first two areas provide a lot of insight into the future viability of companies in emerging markets. On the positive side, education levels and the provision of basic necessities such as housing are among the highest in the world. For example, post-doc researchers in South America are collaborating on cutting edge applications of AI modelling.
Further, education is becoming a more important component of GDP in emerging economies than in developed ones. The areas for which companies have a lot of control over are education and training, labor-force participation continually reinforces the progressive provision of basic necessities, and public health.
As a result, on the negative side, the relatively high cost of education in emerging markets is almost certain to increase. To combat this, in many cities, particularly in the urban areas, there is already a substantial investment in corporate-driven training. Much of this investment is intended to help students master critical skills needed in the workplace and prepare them for increasingly competitive job markets.
There is also a risk that a company’s reputation in a city could be degraded if its employees are exposed to locally-deemed controversial business practices or poached by local employers. To mitigate this risk, companies need to understand the cultural and structural factors that will determine the quality and level of education in a given city and to assess their education system.
We’ve architected a number of apps to empower candidates with online training, AI generated content delivery at scale, as well as continuous learning of corporate practices. Get in touch to learn more on how we can enable teams in your organization.
Evaluate a comprehensive 360 perspective of the landscape
Understanding the opportunities and challenges that companies face in emerging markets is not a simple task. Leaders need to understand them in a granular way, and the activities that derive from them, so that they can take appropriate action.
Companies also need to develop a detailed data-pipeline as the ground-truth perspective on the operational challenges they face in their particular markets.
The three broad areas that openly available datasets can help to understand include the following: the rate of education and training in particular jobs, the size of the labor force in particular regions, and the level of inequality in particular cities. This metadata serves supplementary to ongoing activities of business execution and helps to continually align the strategy.
On a cautionary note, analysts must take significant steps in creating processes for evaluating the quality of source data that is sifted through to prepare answers for strategy leaders. We’ve found numerous examples, including the most recent, notable public-health crisis of 2020 of foreign entities publishing data lacking in independent validation, or means of doing so.
Integration through Digital Transformation as a driver of growth
There’s no doubt digital transformation will enable ubiquitous integration in emerging markets. A shared vision is essential to ensure that the various parts of the organizations work together effectively, cross-collaborating from different regions and time-zones.
Communications apps increasingly use real-time AI to transcribe, and perform advanced natural language tasks: summarization, finding actionable topics, live translation of speech, during remote meetings to break down barriers.
The way the industry creates and distributes knowledge is also a crucial factor for transparency. The more knowledge that flows to a person through the use of social technologies—the proliferation of live video streaming, intelligent cloud apps, and the smart work environment—the higher the odds that the new technologies and new approaches will be effective and sustainable.
Emerging markets will become the largest single adopters of technology globally. They already have one of the world’s most-developed, most-skilled and most-educated labor forces, among relative benchmarks. They are also the world’s largest consumers, with more than half of the world’s population coming from developing nations.
Yet, these markets are not monolithic. India, China and nations like the Philippines have different levels of education and skill levels. Business leaders need to understand the unique challenges posed by each market, what tools and technologies that can be applied to overcoming barriers, and delivering a message that commits to sustainable long-term investment to ground themselves as global players.
Exploring growth opportunities in emerging markets will become paramount to sustaining benchmark returns historically-experienced and to propel your business forward. Establishing both in-market practices and leveraging proven integration technologies for a data-driven, seamless operational execution, are critical in achieving risk-managed global exposure.
Get in touch to see how we can deliver an actionable strategy infused with digital technologies to enable emerging market opportunities and build a seamlessly integrated data-driven global organization.