We’ve been maintaining an “emerging markets labeling” theme through a lot of our blog this year as emerging markets seem to be the places to be if you want to keep your business solid and / or growing. Here’s a great article on the topic of emerging markets, this one entitled “Rethinking Global Innovation.” It is by Scott Anthony, author of The Silver Lining, writing for Bloomberg, and it touchesupon some of the most compelling facts and opinions about emerging markets that I’ve seen to date. For example:
Eighty percent of the world’s population and 40 percent of the world’s economy (adjusting for purchasing power parity) constitutes just 10 percent of revenues for S&P 500 companies… University of Michigan Professor C.K. Prahalad has long urged companies to tap into the fortune at the bottom of the world’s economy pyramid. What once was a strategic nicety is increasingly a competitive necessity. Companies that don’t find ways to love low-income markets will struggle to meet growth targets, and increasingly cede the innovation agenda to companies based in those markets.
Theoretical wishful thinking? The piece includes example after example of companies you’ll immediately recognize finding success and new market opportunities in emerging markets. But since the focus here is healthcare, here’s one good example from the article:
Companies that re-think their approach to emerging markets can create the seeds of powerful growth businesses that can “trickle up” to developed markets… in early 2008, General Electric’s health care division launched a very simple echocardiogram machine that was uniquely attuned to the needs of the Chinese market. The product was about 90 percent cheaper than existing products. In 2009, the device “trickled up” to the German market.