Technology in Emerging Markets: Why We Should Care

A post I wrote for mobile, web and Facebook development shop, BNOTIONS, in which I am the Director of Marketing.

We often think of the developed world as the catalyst for technological innovation, as it is an expected daily part of our lives. We wake up and check our email, we read the newspaper online, we make coffee in an automatic coffee maker and microwave our donut. We go to the gym filled with exercise machines, on to the Starbucks where we pay by mobile smart phones, then to work where we sit at our desk in front of a computer surrounded by monitors, keyboards, smart phones, tablets, and every other mainstream device that we take for granted. But what if you were to suddenly move to an emerging country? A BRIC country or perhaps one of the ‘Next 11′ (also coined by Jim O’Neill). How would your interaction with technology change? And, would you feel like you were surrounded by less innovation?

In our developed world bubble, we are surrounded by the notion that technological innovation is our fine oiled machine. But, as the world is quickly changing, we are seeing a major uprising in technological innovation from within developing countries, that is now emerging in developed countries. ‘Reverse Innovation‘ is the term created by Vijay Govindarajan, and the title of his latest book explaining the ‘phenomenon.’ “The Future is Far From Home: Innovating for emerging markets, rather than simply exporting, can unlock a world of opportunities for multinationals,” reads the title of the first chapter. In the book, Govindarajan reminds us that emerging countries are not the technology landscape of our developed worlds from the past, but rather their own innovation hubs. Emerging countries are completely different technological landscapes with differing demographics, needs and cultures; yet still in this same day and age (yes, 2012).

It is an innovation insight that perks up our ears, as we, as technologists, often look to solve developed world needs; as they seem like the most guaranteed ROI. Although, the world is shifting, according to economic turbulence, but mainly through demographics. Emerging countries are expected to have the largest population of young adults, with India leading in the age demographic of 20-30 year olds by 2050 (Harry S. Dent). This is the age demographic that has historically led to the most innovation in economies and technological advancement, states Harry S. Dent Jr., an economist in his best selling book, The Great Depression Ahead. The book shows an optimist outlook for emerging countries in South America and many of the ‘Next 11′ based on youth demographics for technological change.

“By 2020 [global corporation], Unilver expects developing markets to account for 70% of total sales, with about two-thirds of that coming from growth in the overall size of those markets and the other third from an increase in Unilever’s share of those expanding markets,” reads this week’s Economist in an article titled, ‘Fighting for the next billion shoppers.’ Global corporations have been capitalizing on emerging markets for many decades, further understanding the need for specific innovation and advancement for this huge population, yet this concept has recently come to mainstream awareness and fruition. The Economist article, outlines the race between Proctor & Gamble’s emerging market expansion and Unilver’s lead in developing markets in showing the corporate fight to capture the emerging world demographic, which proves a larger pool of buyers with much different needs then the developed world. As Harry S. Dent Jr. convinces us of a large demographical pool for emerging markets, Unilever validates it with real world examples of innovation and market segmentation with successful development from within emerging markets.

Although, going back to Govindarajan’s concept of reverse innovation (innovation specific to emerging markets that later becomes useful in developed countries), it is these major global corporations like Proctor & Gamble and Unilever, that have seen this opportunity and acted accordingly; but it does not mean there is not room for smaller companies, as well as global corporations. Govindarajan points out companies like the Tata car manufacturer, Imecho (a Chinese smart device developed before mainstream smart phone adoption in the US), the Logitech 2.4-GHz mouse priced at &19.99, and Mahindra & Mahindra’s tractors, to show a diverse bunch of companies looking at emerging markets for innovation inspiration.

From the perspective of technology that we work with here at BNOTIONS, mobile applications and mobile innovation is definitely something we think about as far as emerging markets. KPCB released a report earlier this year showing that mobile traffic in India has effectively replaced desktop internet traffic, which furthers our hypothesis that the applications we are building in-house (and even for clients) will need to keep emerging market needs within the strategy. In fact, a current project (a social game) that we are building is something we intend to test in differing international markets as we keep an eye on the global mobile landscape. This is not to say that BNOTIONS is positioning within emerging markets or even that we build for clients in emerging markets, but rather that we believe the economic development and innovation in other markets is certainly something to take note of, as we move forward.

A little food for thought really, as the world keeps evolving and innovating, it seems silly to forget about the others.


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