#13 Find the Market, then the Brains

In the current economic landscape, we have seen the shift of power from the developed to the emerging markets such as Indonesia, China and India. This fundamental shift has prompt businesses to rethink their growth strategy. One factor contributing to this is due to the mass market in these emerging countries. If we take this into context, the world currently has approximately 7 billion people and out of this 7 billion, 2 billion belongs to the rich countries and the remaining 5 billion people belongs to the poor and emerging country. The 5 billion people serve as tremendous market opportunities. The late Proffessor C.K. Prahalad calls this the fortune at the bottom of the pyramid.

How businesses can tap into this market is by having big dreams in these emerging economies. Businesses should prevent bringing innovation from developed economy to developing economy. This is because if we look it into detail, there is a huge gap between the incomes per capita between these two categories. How could a person earning $800 per year afford something from a country where the people is earning $15000 per year. This does not only address the issue of income gap but also the lifestyle of these people.

Innovation should be done in these developing countries tailoring to the needs and capabilities of the people. I quote this from Proffessor Vijay Govindarajan, Innovation is not just creativity. It does not only taking into account the brain. Innovation is commercializing creativity. These two words (commercialization and creativity) should not be separated when we are looking at an innovation point of view. Thus, there should be a market for the creativity before setting the brains to it. And this can be found in developing countries such as Indonesia, China and India. More recently, Indonesia has become a popular destination for investment due to the huge domestic consumption.

Several success stories can be seen. This includes the introduction of Tata Nano, the world cheapest car in India which only cost $2000. Before this, most people in India travel on 2 wheelers which cost approximately $1500. Tata Motors sees this opportunity and brought the brains into the market which then proves to be stroke of genius.

Overall, there are still many stories in the 5 billion people which have yet to be unfolding. It is the business’s role to explore and amplify the signals for innovation.

With the world becoming more connected, businesses that are not on the lookout for emerging markets are destined to lose out in the midst of competition. Businesses now should start putting more resources into these un-tapped markets and build their business around these massive markets of opportunities.

Inspired from: http://www.youtube.com/watch?v=1KUFkQBDo74

Photo taken from: http://liveindia.tv/india/india%E2%80%99s-population-pegged-at-1210-2-million/