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Business Management

Dan Swinhoe (Global) - Lessons from Emerging Markets

When it comes to emerging markets, the focus is usually on opportunities for people looking to invest, or why they're failing, or lessons learned from failures. But with the news the BRICS are looking to create their own development bank, maybe we should be asking what can we learn from what they're doing right?

1) Flexibility

Playing fast and loose with ideas and patents may sound crazy when majors companies are suing each other on a regular basis over the tiniest details. But the Chinese idea of ‘Shanzhai Innovation' does just that. Ideas are quickly shared, changed and improved upon, and then sold cheaply. Yes it's a bit ethically patchy, but allows lower income consumers access to the kinds of products normally out of their reach, such as iPhones, and it can work. Just look at the success of Rocket Internet.

2) Localization

The problem with multinationals is they don't look close enough. In Kenya, mobile payment company M-Pesa accounts for a staggering 31% of the country's GDP spending because the infrastructure doesn't lend itself well to other forms of banking. While an exceptional case, there are other, smaller examples. There are localized social networks such as Mxit and Lagbook in Africa, Sinwa Weibo and Renren in China, and localized tablets in Africa, Malaysia and India, just to name a few. It's simple; understand what's happening on the ground and then you can solve the problems you find.

3) Education

Despite unemployment being high in many Western countries, there' still a chronic skills shortage in many areas, so much so that Facebook's Mark Zuckerberg formed a lobbying party to try and relax immigration laws. Meanwhile China and India are expected to produce 40% of global graduates by 2020, just under double US & European figures. No wonder so many R&D Innovation centers are now being opened in the region. While the average quality may not be as high as the West, it's still impressive that so many are available when the cupboards are bare here.

4) Shared Value

We looked at Shared Value a few weeks ago, and Latin America are showing they really get it. The fact that many countries in the region have many social problems, especially around inequality and education, means it's well placed for this kind of social project. Using LatAm as an example would benefit both companies and the people around them.

5) Small Businesses

In Latin America, the SMB is king; they make up the vast majority of businesses and employment in the area, and around a third of the region's GDP. Clearly, they know how to work in those markets, and have plenty of offer - especially when it comes to deploying limited resources. But they also know when they need to come together. Clustering allows the sharing of knowledge, skills and resources- essentially allowing small businesses to act like big ones. The collective Shenzai businesses are a good example of this. You can't always rule the world on your own.

6) Sustainability

The US might not have started to embrace Green IT, and efforts in Asia are mixed, but emerging markets are quickly becoming beacons for sustainability in business. It's an issue that will only grow in time; watching how companies from Costa Rica, Egypt and the Philippines are taking the lead shows not all businesses are short-termist.

By Dan Swinhoe, Editorial Assistant, IDG Connect

Do you agree? What lessons you do think Emerging Markets can teach? Take our survey now.

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Dan Swinhoe

Dan is a journalist at CSO Online. Previously he was Senior Staff Writer at IDG Connect.

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