As the developing world booms, old multinationals quake
May 12, 2013 Editor 0
In the next 15 years, the number of people in the consuming class will double and, for the first time ever, emerging markets will have more purchasing power than developed economies combined.
Dylan Reid of GOOD has summed up this phenomenon and explained why smart entrepreneurs aren’t eyeing the first world anymore.
Despite the wide adoption of new consumer products around the globe, the vast majority of innovations are developed with the first world in mind. Only when technologies can be made sufficiently cheap and on a wide enough scale do they make their way into emerging markets, either as backdated or stripped-down versions of what’s available in the west. The difficulty of reaching consumers in these growing markets has kept them on the periphery of corporate agendas, but as billions of new consumers become richer and more connected, this is likely to change. As the emerging middle class moves from the sidelines to the center stage of global economy, might we be forced to reconsider the top-down way in which we innovate as well? …
The challenge of activating the next four billion customers will be not only in understanding their needs but also amending our notion of what innovation means. As multinationals stumble to gain market share and local companies are slow to change, there is an unprecedented opportunity for globally-minded entrepreneurs. The barriers that once kept startups out of emerging markets are quickly vanishing, and today anyone with an internet connection is a tweet away from the developing world. Even so, few aspiring entrepreneurs, heed the call.
Even fewer aspiring entrepreneurs have the resources–money and mentorship–to help them make their idea a success. Those most likely to, in the developed world, may have to step outside their first-world-oriented comfort zone.
For founders who operate on intuition, it’s difficult to see what’s outside your field of vision, or imagine lives different from your own. But with trillions of dollars and billions of customers at stake, surely the future will belong to those who do. I challenge entrepreneurs to use a little imagination and apply their vast talents to solving the greatest problems that the future will hold. If they can innovate for the middle of the pyramid, they can share in their remarkable prosperity.
The opportunity for entrepreneurism and imagination is ideal for the youth demographic that is more connected and technologically savvy than ever before. So the challenge is to throw off the chains of expectations and mediocrity, think about the big picture, and embrace this fundamental shift in entrepreneurial opportunity.Smart entrepreneurs are shifting their focus to the emerging markets. Photo: benjaminasmith (flickr).
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