Different strokes for different folks
As I experience the energy unleashed by and in emerging economies, I realize that my decision to work in India after I got my Master's degree was the right one. What brought this point home was a recent report I read which stated that the combined GDP of emerging and developing countries - measured in PPP terms - is set to overtake that of advanced economies in 2013. This news is highly significant, highlighting as it does the fact that the balance of economic power has shifted.
Engaging with an emerging economy at this point in time is truly exciting as these are opening a whole world of opportunities for business. The cost arbitrage and skill-sets brought to bear by a deep pool of educated manpower are propelling growth. A large consumer class is demanding better products at lower prices, driving innovation in business models and products. The leapfrogging in technology evident in this part of the world as people strive to catch up with the West nurtures out-of-the-box thinking, making the emerging economies crucial as a source for talent. I believe emerging economies offer multiple opportunities - they are a ready market and a hub for innovation, and also a source for top-quality talent.
However, enterprises can convert these opportunities into a business advantage only if they understand the amazingly varied nature of these economies. The developed world is largely homogenous, with a certain threshold in the parameters considered for trading and commerce - such as education and income levels, infrastructure and the standard of life. Emerging economies, on the other hand, are deeply and disparately segmented. But the West views them as a monolithic mass and herein lies the root of the problem.
Let me take India for example. You will see the richest of the rich here living and working in proximity to the poorest of the poor. It has a middle class that is larger than the population of the United States. In such a situation, considering the economic average to do business is surely not the right way, for the average is hardly representative of the economic and social reality that needs to be understood to engage in successful commerce. Any enterprise will need to dive deep into each emerging economy and dissect each segment and understand their needs, desires, wants, thought processes, cultures, and ideas if it is to leverage the economic opportunity on offer. It will need to customize products, distribution networks, and sales strategy, among other aspects, to satisfy the demands of each consumer segment.
I think this is where Infosys comes into the picture - we are from this part of the world and know these economies intimately. Moreover, we have worked with global enterprises for decades and have put in place the best processes and practices. We can partner corporations and support them with the business and technical knowhow needed to help them capitalize of the potential offered by each segment of the population in each of the emerging economies.
As I blog on this fascinating area, I will continue touching on these themes. For now, I would like to stress that Western corporations will need to appreciate segmentation running through emerging economies if they are to seize opportunities for the future. For I believe the future lies here - with emerging economies - and global enterprises will need to engage with these economies to safeguard their own future.