×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Emerging markets driving global innovation

Emerging markets driving global innovation
PTI
Comment E-mail Print Share
First Published: Tue, May 22 2007. 06 09 PM IST
Updated: Tue, May 22 2007. 06 09 PM IST
Mumbai: Leading IT analyst Gartner said on 22 May organisations operating in “constrained environments” in emerging nations such as India and China are innovating at a faster rate than ever before.
“Innovations from new, relatively untapped markets is driving global innovation, creating a force that cannot be ignored by organisations in mature markets,” Gartner said.
The issue was also discussed at Gartner Symposium/ITxpo held in Barcelona, according to Sandy Shen, Gartner’s Research Director.
“Gartner analysts have examined the increasing global importance of innovation in emerging markets and looked at how this disruption from the bottom of the pyramid can benefit more mature markets,” the release said.
According to Gartner, developing nations are adopting innovation and technology faster than mature markets for three main reasons.
Firstly, emerging markets have fewer legacies enabling them to leapfrog technology and commercialise it faster, making them ideal test beds.
Secondly, in highly-constrained environments, which might include poor infrastructure and low affordability, there is an acute need for products that can serve the local market better, rather than products designed for the developed world.
Less power and built-in connectivity are more suitable for emerging markets than PCs. They are also cheaper than PCs and more adaptable to the emerging market environment.
Gartner predicts that mobile phones will outnumber PCs by a factor of 15:1 in developing markets by 2010.
“Thirdly, emerging countries such as China and India have the ambition to lead the IT industry in the global market, and innovation is their only way to compete globally”, it said.
Organisations across the globe may not have the same problems or business drivers, but they could all benefit from the same innovation adapted to meet their local needs, according to Shen.
Green technology is a prime example of this. Emerging markets will require biofuel-powered products because there is no or little power. The same products will be inherently green and could be used in developed markets to address environmental-consciousness issues.
Another example, according to Gartner, is mobile banking. SMS money transfer was first introduced in emerging markets because it was not otherwise cost effective to reach people in remote areas.
This solution is now being adopted globally by leading carriers and financial institutions to address the inefficiencies of international money transmission, it says.
“The development is profoundly altering the way people in mature markets use banks and other financial services, according to Shen.
In 2005, the number of patent filings in China outnumbered those in the US. Slightly less than one-tenth of world intellectual property organisation’s international patents were attributed to emerging markets”, Shen says
“Today, Chinese companies like Huawei, Lenovo and Haier are stepping up investment in new product research, and aggressively pushing into global markets as low-cost players, ultimately posing a serious threat to global organisations,” said Partha Iyengar, Vice President and analyst at Gartner
“India also appears on the way to becoming an IT services powerhouse with the help of established leading Indian IT companies such as Wipro, Infosys and Tata Consulting Services.
“IT services account for around half of India’s services exports and the IT services market is growing at more than 30% per year,” he said.
According to Shen, “85% of the world’s population reside in emerging markets. Although today their populations have lower purchasing power with many living under the $1 poverty line, the aggregation of their purchasing power in the next decade could pass that of developed markets.
“In fact, the populations of China and India are moving from below poverty line, creating a whole new consumer population of equivalent size to the European middle-class in purchasing power parity (PPP) terms”
In 2005, the number of patent filings in China outnumbered those in the US. Slightly less than one-tenth of world intellectual property organisation’s international patents were attributed to emerging markets”, Shen says
“Today, Chinese companies like Huawei, Lenovo and Haier are stepping up investment in new product research, and aggressively pushing into global markets as low-cost players, ultimately posing a serious threat to global organisations,” said Partha Iyengar, Vice President and analyst at Gartner.
“India also appears on the way to becoming an IT services powerhouse with the help of established leading Indian IT companies such as Wipro, Infosys and Tata Consulting Services.
“IT services account for around half of India’s services exports and the IT services market is growing at more than 30 per cent per year,” he said.
Comment E-mail Print Share
First Published: Tue, May 22 2007. 06 09 PM IST
More Topics: Technology | Tech News |