Economy in emerging markets


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The International Journal of Emerging Markets indicates that emerging markets such as Brazil, Russia, India, China and South Africa account for 20% of the world’s GDP and two-thirds of world’s population. With the IT market improving, technological advancement resulted. This has led to India having a vast pool of resources that are highly skilled.

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Economy in emerging markets

  1. 1. 4/2/2012 iPOTT Getting you there… Economy in emerging markets Having looked at importance of globalization and the effortsCEO Speak taken to gain cultural sensitivity to reduce chances of initial failure, it is now time to understand the economic factors influencing the desire to expand in globe. Why would any company choose to globalize in a particular country? WhatTo visit this blog Click here. makes it stand out of the crowd? We aim at gaining an insight into these questions in this article.iPOTT being an end to endprovider of innovative and cost The International Journal of Emerging Markets indicates thateffective services in the areas of emerging markets such as Brazil, Russia, India, China andknowledge management, sales South Africa account for 20% of the world’s GDP and two-enablement and consulting offers thirds of world’s population. With the IT market improving,a unique and unbiased platform technological advancement resulted. This has led to Indiafor software product companies having a vast pool of resources that are highly skilled. Indiaworldwide to reach their target which initially served as a low-cost labor provider is now beingmarkets targeted as a resource-rich country. It is estimated that 70% of the world’s growth will come from emerging markets and 40% of that is accounted for by India and China. With the tremendous growth, many local companies that previously offered no competition are now major competitors to transnational corporations. The shift of economic power to emerging markets has led to many transnational firms that are already established in India to initiate activities to acquire a share in the growth. The symbiotic relationship between global economies are so tightly interconnected due to these exchanges that governments and industries will have to cooperate their ways to adapt to these evolutions. Looking at it from economic perspective, the key factors driving this change need to be identified. This is necessary to introduce changes in business strategy to reflect localization. It is quite obvious by now that the biggest factor driving
  2. 2. economic changes in emerging market such as India ispopulation growth. Increase in their urbanization and thegrowing divide between youth and aged has created space forlarge fraction of people who are skilled and eligible to work.The recent recession has strengthened relationships betweenlocal companies and government further as new initiativeshave been launched to enable better connectivity, which hasattracted more interest thereby creating gradual balance inglobal economic power. It is obvious that the emergingmarkets will soon create space for new entrepreneurs who areidentifying gaps in market for services targeting low-incomeconsumers all over globe. Internet marketing and e-commercehas led us into a new era. Disruptive innovation is now acommon trend in emerging markets.It is quite probable that the growth will result in winners andlosers. What decides winning factor in emergent companies inthe current context? Entrepreneurs will have to look outwardas adaptations in technology and regulatory changes areinevitable while introducing a new product and creating aglobal market for it by adopting global workforce. Adaptationsto external environment and embracing technology to reflectthese changes are critical to remain trendy and visible. Supplychain management will play a critical role in the way goods arepackaged and priced reflecting changes in raw-materials’ pricefluctuations and labor cost structures. The trend is furtherinfluenced by national governments trying to reduce coststructures and focusing on growth agendas. With the adventof ‘cleantech ideas’ emerging companies have startedincorporating green transportation, renewable energy,recycling, green chemistry and other energy efficientappliances right from initial stages to gain a ‘Competitiveadvantage’ in long run. According to Ernst and Young, by 2020,Brazil, Russia, China and India are expected to account fornearly 50% of all global GDP growth. This has created scopefor high investment activities by investors who are trying tosecure a strong base here.
  3. 3. In the next issue we will be discussing more about Economicfactors driving changes in IT product development industry inIndia and how this influences Corporate Strategy.