Designers, manufacturers, and vendors are continually trying to extend their reach into “emerging markets,” and I suspect that’ll be the case until there are no more markets left to emerge. Although in that case, they will probably start talking about “re-emerging markets.”
In many cases, it takes a real commitment from a government to transform its country into a technology player. Without that commitment, it’s almost impossible to get a grassroots movement to move in an upward direction. To some extent, buy-in from a few of the larger companies in the world can help expedite the process.
Depending on the markets and applications you serve, different countries can be at varying states of “emergence.” For example, in the electronics space, China is far beyond the emerging state, and India is mostly in the same boat, although there are definitely differences between the two. The biggest difference is that India has more resources in the software space than in hardware.
I’ve long been a proponent of the Eastern European counties as the next place to emerge. However, I was somewhat caught off guard by the emergence of Brazil over the past couple of years. It’s a place where embedded software is being developed in a big way. It’s also a region where there is a fair amount of medical device development and manufacturing going on.
What led me to think down the path of “who, what, and where” are the emerging countries was a discussion I had at the recent NI Week conference (early August, in Austin, Texas). National Instruments announced a program called Planet NI, the goal of which is to nurture innovation and entrepreneurship in developing countries (clearly you have to “develop” before you can emerge).
In the company’s own words: “Planet NI is an initiative designed to empower engineers and students in developing countries to achieve economic prosperity and sustainable development through access to NI technology.”
In the same way that many vendors put their tools, software, and so on, into the hands of university students, NI is making its technology available to designers in these developing countries. Initially, it's targeting designers in Turkey, Lebanon, Egypt, Pakistan, Tunisia, the Philippines, Cameroon, and Nigeria.
Clearly, there’s a financial reason for such an undertaking -- to eventually make paying customers out of these folks. If a few of them turn out to be big customers, the goal is realized.
Before the fan mail starts to pour in, I want to be clear that NI is far from the only vendor doing outreach like this. it's merely the one that put the bug in my ear recently. Another fine example comes from DuPont. That firm has a long history of active participation in the communities in which it operates, including volunteer efforts, grants, educational programs, and sponsorships. This includes underwriting education programs that benefit students of all levels, as well as teachers and laboratory researchers.
What’s your take? Tell us in the comments section below.
Discussions about emerging markets are almost always framed in old thinking- "how can the US and Europe sell more stuff to everyone else". The biggest, and best IMHO, surprise for most with the emergence of the BRICS was that the model was flipped. Brazil, Russia, India and China are developing designers and manufacturers with a local perspective. These designs are booming within each market and being exported to the US and Europe for purchase.
The newest, quietest economically stable area is Eastern Europe. Unlike Western Europe, they didn't start the century with billions of euros of debt. They didn't have to climb out of a hole. If grassroots politics is allowed to thrive, many countries in Africa, still rich in natural resources, could rise as future superpowers near the end of the century.
You are so right in your comments about the US and the educational initiatives needed to help our K-12 schools become more affluent in technology. While working at Chrysler several years ago, I ran an outreach program to help inner city kids become exposed to careers in Automotive Engineering. The program was called "Wonders of Automotive Engineering' with the hands-on exploration in Electrical-Electronics, CAD, Software and Mechanical Engineering disciplines. I created labs for the Elecrical-Electronics engineering sessions using the original LEGO Mindstorms RCX programmable brick and Radio Shack Electronics Lab kits. I also had the support of Chrysler Engineers and CAD Designers to teach classes in their chosen career fields. The program ran on six Saturdays and the results were overwhelming. These kids pursued engineering careers after graduating from high school with passion and dedication. The tools and technical resources used to illustrate engineering opportunities to these students are paying off because they are now in positions to buy technological tools for their company design projects. Thus, they have become future revenue generators.
Another way to track developments in emerging markets is to follow the large electronics distributors as they extend their warehouses across the globe. Avnet and Arrow have been pushing into Latin America, Eastern Europe, and the Mideast. Also, huge portions of both China and India are still emerging markets.
Rich, the technology companies based in the US have been major exporters for many years. Even in the early 1990s companies like Oracle and IBM had at least half of their sales overseas. The percentage is higher now. This is generally a good thing. I once did a project for a small manufacturer of Point of Sale (POS) systems in the US. It was a very small company (less that 25 people). They had just started expanding their exports and were internationalizing their firmware.
What is interesting, though, is that the three countries that have the highest volume of exports, Germany, China and the US, have very different economic profiles. In Germany, exports account for about a third of economic output. These are high value products. Consumption at home is also high and broadly spread. In China, exports account of probably 20% of GDP. These are mostly low value products. Even products like the iPhone and others use components from many other countries with just the final assembly done in China. At one time I saw a detailed analysis of a BlackBerry phone. In the end, the assembly work done in China accounted for just 5% of the cost of the phone. In the US, even with exports on a par with the other two, our exports are less than 10% of our GDP. Most consumption is at home.
As Beth says in her comment, it is a global marketplace. I talked to a VP at a large technology company that had moved a good bit of its engineering to lower cost areas. Over a fairly short period of time (the last decade) the differential in costs narrowed. It went from 8x to 3x. Considering the prodcutivity differences and management costs for distant groups, they have since brought most of that engineering back to the US. So, as you mention in your article, there are ebbs and flows. The original impetus for opening up our economy was to help less developed countries grow so that they could become markets for more advanced goods from the US. There have been lots of bumps in the road to this goal, but I think we are getting there. That is also good for stability. So, it is right and good that our companies cement their influence in other countries. That allows them to expand and hepls the US economy in the long run.
No doubt the world has been transformed into a global marketplace and seeding technology in far away places is not just smart business, but likely essential today as you never know what country is going to be the next India or China. That said, I hope the NIs, Duponts, and others of the world continue to put the practice to work in our own country. While the U.S. is obviously not viewed as an "emerging market," there are huge pockets of folks who haven't been exposed to technology that could certainly benefit and potentially serve as future revenue generators if they had the change at success. That means not just providing the software tools to universities, but to K-12 schools, urban social programs, rural communities, etc. In many ways, they can be as shut off from technology as emerging countries.
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