Why Emerging Economies Provide the Greatest Opportunities for Innovation

This content relates to : EMERGING ECONOMY – INDIA

Jagdish Sheth

Emory University 

Emerging markets provide the greatest opportunity because most of them are transitioning from the agricultural age to the industrial age and therefore they’re shifting from non-user to becoming users. Rather than making things at home, they are going to buy more commercially and they seem to have the livelihood and the income to do it. Majority of the people … you do have the poor people who cannot do it. But still the market is very large. It is also amplified by population size, especially India, with billion people, China, with billion people, Africa put together, again, another billion people, which is untapped market. So, that is where converting non-users into users become a very key strategy. 

Second reason is equally important. Most of the consumption in emerging economies including India is unbranded products. And people are now, with social media and smartphones, are more and more looking for branded products. Even the traditional products such as raw materials, lentils, rice, wheat, flour, etc. People want it packaged, promoted, properly branded essentially. So the change in unbranded to branded is the second major category.   

The third category is equally interesting. More and more these economies are informally organized so far with lot of cash payment. And now they’re becoming more and more organized retailing. Surprisingly many emerging economies are leapfrogging into e-commerce. So if you take India, Flipkart is a major e-retailer, the online retailer, very similar to Amazon, and Amazon, itself, is a second largest or the largest in India. And main ingredient that works very well when you leap-frog is that you have to have supply chain and the enabling technology, which is connectivity, for example, and the smartness in the, in the phone system. I think those things are all contributing to our paying attention to the emerging markets.   

Dr. Jagdish Sheth 

Emory University