16 May 2012
A Treasure Trove of Opportunity
That’s because these markets could actually pave the way for enhancing and increasing these companies’ own global competitiveness. For example, the kind of entrepreneurship and innovation occurring in India and China illustrates the type of niche opportunities that exist not only within developing countries, but also within the domestic markets of countries such as Australia and the US.
Consider the example of microfinancing. Stemming from the prevalence of very poor customers who can’t utilise the services of regular banks, a completely new industry has evolved whereby this sector is supplied with finance in small amounts. While a demand for the service itself may not exist in the West, the same logic, principals and strategies responsible for the innovation can be applied to other niche markets in developed economies.
Another interesting example relates to the development by General Electric of a handheld ultrasound machine - a device that’s proving very useful for taking to small remote towns or villages where big hospitals are not present. Although the machine is far less relevant to Western societies, its development nonetheless demonstrates the value of innovating products for sale in developing markets. Significantly, such innovation also entails highly positive social repercussions and possesses a noble intent - something that many companies are currently looking to achieve.
So, why aren’t we seeing more involvement by local companies in these emerging markets? I think it mainly stems from a lack of awareness and knowledge of the opportunities on offer. When that awareness dawns, I believe that they will shift their focus and start to look towards the types of benefits and rewards that these emerging markets can provide.
Author: Dr Vikas Kumar - Associate Professor and Director EMIRG, University of Sydney Business School