Wednesday, November 11, 2015

INNOVATION, TECHNOLOGY AND THE RISE OF THE EMERGING MARKET





The influx of innovative approaches to productivity in the new era is closing the economic gap between the developing and developed world. 

As emerging markets experience an increase in disposable income and urban migration, the economies are witnessing a shift from subsistence-based producer economies to “providers of capital, talent, and innovation”.[1] In addition, product marketability is widening because consumers, as they cross over to the middle class, are experiencing substantial increases in disposable income. The current goal of companies is to tap into the demand of this advancing group. Some strategies employed to achieving this goal include: reinventing business model(s) to incorporate the needs of global consumers and reducing cost structures.
Besides innovative strategies, other processeses need to be utilized to aid productivity. Firms need to focus on developing a knowledgeable workforce and supporting policy changes to reduce the restrictive politics surrounding immigration. Also, firms need to take advantage of the accessibilty and connectivity provided through the advent of the digital age. These “rising levels of connectivity will stimulate financial inclusion, local entrepreneurship, and enormous opportunities for business.”[2]

Parallel to the factors influencing a company’s business strategies, the motivators swaying consumers’ use of particular resources include: growing demand, limited supply, and increased regulatory and social scrutiny. That being said, business models should center around, not only labor productivity, but business productivity as well. In the global market, businesses should start identifying which nations to partner with and aim to enhance business-government relations. Occasionally, governments enlist the private-sector companies to improve private-sector endeavors.

Application. The creation of a balanced scorecard that considers the emerging market when creating its objectives will prove auxiliary to overall productivity and marketability. Global companies, such as Rockwater, utilize the balanced score after a recent merger of companies to create homogenuity amongst the numerous cultures and languages within the organization.[3]



[1] Peter Bisson, Rik Kirkland, Elizabeth Stephenson, & Patrick Viguerie, What happens next? Five crucibles of Innovation that will shape the coming decade, McKinsey & Company, 2010, pp. 6.
[2] Jacques Bughin, Michael Chui, and James Manyika, Ten IT-enabled business trends for the decade ahead, McKinsey Quarterly, May, 2013.
[3] Robert Kaplan and David Norton, Putting the Balanced Scorecard to Work, Harvard Business Review, September–October 1993

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