MKTG 620 Case Study: Analyzing Innovation in Emerging Markets

This case study, prepared for MKTG 620, analyzes the challenges and opportunities of innovation and business in emerging markets. It begins by examining the context of the fourth industrial revolution and the potential for developing nations, highlighting the importance of technology adaptation and infrastructure. The study uses the example of Mumbai, India, and the rise of companies like Ola and Uber to illustrate the impact of innovation and the barriers to widespread adoption. The document identifies key obstacles, including institutional issues, lack of infrastructure, and human capital gaps. It then explores alternative solutions, including changes in government attitudes, fostering collaboration between developed and emerging nations, and promoting investment in education and training. The study recommends the creation of an international forum to facilitate innovation and address the unique challenges of emerging markets, proposing strategies to support innovation and enhance the global economy.

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Innovation and Business in Emerging Market
Prepared By: Student Name
Marketing Management, MKTG 620-W, Summer 2019
Dr. Cynthia Rodriguez Cano
July 3, 2019
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Contents
Introduction................................................................................................................................4
Thesis......................................................................................................................................4
Background of the problem and the challenges.........................................................................5
Alternatives................................................................................................................................7
The list of Pro’s and Con’s.....................................................................................................8
Con’s...................................................................................................................................8
Pro’s........................................................................................................................................9
The reason behind the rejection of the alternatives....................................................................9
Proposed solutions..................................................................................................................9
Recommendations................................................................................................................10
Conclusion................................................................................................................................11
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Introduction
The author of the book “The industries of the future” Alec Ross wrote that the third
generation of the industrial revolution was a fruitful phase of economy for the emerging
nations because developed nations first hire the workforce from the emerging world and then
invested in their economies to make them a market place for the goods and services that were
developed in the first world. Now when we are entering in the fourth generation of the
industrial revolution once again the same question is emerging in front of the economists
(Ross,2016). This time it can become a severe problem for the emerging world or the
developing nations of the world. There are two major reasons behind it; the first reason is
associated with the adaptability of the technology in the emerging world. The second problem
is associated with a lack of infrastructure and innovative ideas in the emerging world. W
Jordan from the Harvard business school has conducted a case study in this regard where he
touched upon certain issues that are acting as a barrier in the formation of synergies between
the first world and emerging world. In this case, he touched upon technology-based social
and economic issues and established innovation as a solution to these barriers.
Thesis
Based on the data presented by many experts in different publications we can make a
statement that singular attempts made by the innovators needs heavy infrastructure and super-
structure based investments from the side of the public sector. This institutionalization of the
innovation-based techniques is a poignant barrier that has the potential to bring a halt at the
formation of a “free sky driven market place” as it is being planned by all the major countries
of the world.
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Under the current assignment, we will examine the weight of the above-mentioned thesis
with the help of data and facts presented by various fraternity experts over the issue.
Background of the problem and the challenges
Mumbai of India is among the biggest metro cities in the world, almost a decade back this
city was suffering because of a condensed mass rapid transit system where many bottlenecks
were present. The cab owners of the city became the rulers of the city and started pricing their
services exorbitantly. The regulations imposed by the government were of no use because
local people encouraged them with an intention to save time. A few years ago, Ola and Uber
made an entry in the city. Within no time they captured a huge chunk of the market because
of the integrated utilization of the travel resources that made it a win-win situation for both
Ola operators and normal customers.
Ola and Uber are an innovative idea; we can also term this exercise as the entry of innovation
in an emerging world country. However, Both Ola and Uber are not able to expand their
wings in the market because of a technology-based barrier. This technology-based barrier is
associated with the penetration of internet services in the city. Only 33 percent population of
the city has access to the internet. Apart from it, the number of smartphone owners is less.
The affinity with technology is a major factor here. The innovations done by UBER and OlA
are way ahead of the time, still, they are apt for a city like Mumbai because of a technology-
based barrier. Currently Ola and Uber are operating in 24 more cities in India, however, in
spite of the presence of technological innovation to streamline the logistics they are not able
to expand their wings. They are not able to start inter-city services that are the next frontier
for innovation. The same scenario is applicable to the formation of the block chains and other
B to B platforms. Western world or the developed world is developing new business models
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where they are able to relish internet connectivity and the penetration of the IT facility. An
emerging country like India is still struggling with instant money transfer on digital
platforms.
This condition is more or less the same for all the emerging world countries. The studies done
by survey authorities failed in identifying a single country in the emerging world where they
have 50 percent internet penetration at the basic levels. This is a big deal; it can become a
causative factor behind the strangulation of innovative business ideas. When we have a look
at the traditional models of the business development and the role of innovation then we find
that in general, an innovator has to take care of three factors associated with the emerging
world. These three factors are institutions, human capital, and infrastructure. In the coming
future, the business leaders of the world are seeking to form a global economy where
multinational brands will be able to compete in a perfect competition market without any
trade restrictions. Under its present conditions, the emerging world is lagging behind in all
three departments. The human capital associated with the emerging world needs training of
the skills that can convert them into a technology worker in the new economy. However, the
data presented in many case studies presents a dismal picture in front of us. We can check it
on two scales; the first scale is the scale of technology adaptation, Argentina and Malaysia
are two countries where seventy percent of the population is ready to adopt the new
technology. Let’s benchmark this fact with the Case of UBER and OLA in Mumbai, If Uber
or Ola get a chance to establish their market in Malaysia or Argentina then they can become a
key player in the market.
However, an innovator has to look upon certain institutions for the same. In recent years, the
concept of the industry ready labor has emerged in an emerging world where governments
are promoting job oriented and technology-oriented training to the employees based on the
demands of the industry (Zitian,2014).
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The institutions of any country can act as a barrier of facilitator, this we can see in the case of
M-Pesa a money transfer tool in India, the moment Indian government supported it by
legalizing the payments in the government sector, the transactions on this platform picked up.
When we check this fact from the point of view of a fair competition market then we find that
it sends a negative signal in the market.
The PESTAL conditions associated with the global economy can be removed. Google in
China is a proverbial case of PESTAL hostility. World trade organization and other forums
can jointly decide the worth and intervention levels of technology in any country. Innovative
ideas need a space in the global economy; they can make a difference by creating a greater
good for the world community. Meritorious ideas can be discussed on an international forum
and this forum can ensure the best exposure for the innovation in any given country
(Ross,2016).
Alternatives
The study of the background of the problem through the lens of Jordan presents three major
obstacles in front of us.
1. Institutions in the emerging countries failed in creating a neutral environment for the
main markets and supporting factors. This inclined equation of the market strangled
some of the innovative ideas because of the hostile PESTAL conditions.
2. The lack of infrastructure, literacy level and incompetence to accommodate a new
technology at a larger scale limits the options for innovators and this is why most of
them fail in scaling up for the mass operations.
3. The human capital index in the emerging world is low, although the quantum of
human capital is high. This gap between the human capital index of the emerging
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world and developed world is right now favoring the developed world. It is allowing
them to supersede on the frontiers of new technology.
In order to meet out these problems, the first thing that can be done is related to the change in
the attitude. Emerging countries should understand that the rules of the business and the
business models are changing (Hashmi,2013). Under the conventional setups, the government
sector was well equipped with certain tools to strike a balance by imposing duties and other
restrictions to ensure local level employment. However, under the current regimes, they need
to collaborate with the first world countries and act as a business partner with them rather
than acting as a tax collection body (Taylor,2015).
Innovative ideas can also destroy the balance of the payments for the local economies and
they can create an imbalance in the market. This factor is very crucial. No government would
like to destroy an eco-system where an external body or an innovative idea can walk in and
destroy the economic equilibrium (Madhvi et al, 2011)
The list of Pro’s and Con’s
Con’s
An innovative idea can destroy the eco-system of an established market and disrupt the flow
of resources to leave certain sections of the market in a miserable position.
The failure of an innovative idea can force industry sectors to suffer losses; it can also lead to
economic consequences.
The quick implementation of new technology can give rise to non-serious players in the
market and spoil its balance.
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Pro’s
An innovative idea can change the life of a business fraternity by connecting it to new
avenues.
Innovative ideas can remove entry barriers and support the environment of perfect
competition.
Innovative ideas can remove the malpractices and artificial shortages created by shrewd
players of the market (Rolfesema,2018).
The reason behind the rejection of the alternatives
Emerging countries are still underprepared to go for technology-based change management
exercises. Education levels of the population, adaptively levels of the systems and technology
are few areas (Sivak et al,2011).
Most of the innovative ideas in the 21st century are based on the fast proliferation of
resources. This proliferation can upset the economy of an emerging country; the individuals
that are living on the edge of the poverty line can suffer badly (Taylor,2015).
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Proposed solutions
Financial institutions and the think tank of emerging countries should accommodate
innovation under a friendlier environment. Just like it happens with the core sector industries
or tourism industry of any country. Innovative ideas can be accommodated in the mainstream
services under the role of a technology partner, as it was the case with M-Pesa in India. In
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order to add the element of fair competition, they can set benchmarks for the other innovative
ideas to qualify and become a technology partner (Standing, 2012).
The human capital index is a serious issue; emerging countries can invite investments from
the industry sectors rather than industry players. For instance, the automobile guild of the
world can donate money to develop surface transportation based infrastructure and later on
they can sell products. In a similar fashion, big giants like Google and others can support the
cause of internet penetration and develop new technology-based tools in an emerging country
(Standing,2012).
Innovation demands investment, for instance, the formal training of the employees can fill in
the gap of knowledge caused by the change in the technology and support the ideas of the
change propagated by an innovator. The findings of the concerned study show a ray of hope
in this area because emerging world countries have a strong culture of training skill
development of the human capital (Shiller,2014).
A policy to facilitate innovation can be developed, it is important for the countries of the
world to share a forum where they can discuss the scenarios that will arise after the
implementation of an innovative idea (Gashi et al,2013).
Recommendations
The constitution of a separate forum for the facilitation of innovative ideas at an international
level is the need of the hour. This forum can also settle other tangent issues related to the
after effects of innovation (Hudson et al,2013)
Global standards for industry readiness should be procured with an intention to bring the
human capital of emerging countries at par with the human capital of the developed nations.
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An environment for a perfect competition among the technologies should be developed in
various countries with an intention for the creation of greater goods in society (Nazarow et
al,2012).
Exchange of soft powers along with the technologies can also be considered as a practice that
can add sustainability in the implementation of certain programs (Amaeshi et.al, 2015).
Conclusion
An in-depth study of the facts and hypothetical assumptions related to the facts and future
scenarios corroborates the fact that institutionalization of human capital and infrastructure is a
barrier in the journey of innovative ideas and brings them in the zone of an oligopoly market.
However, under the light of the same facts, we can also say that the reforms in this process of
institutionalization of the major resources under a democratic setup have the potential to
create a business environment. It will be an environment, where innovative ideas can flourish
and compete with each other to create greater goods for the society of the emerging countries
and economic gains for all the stakeholders.
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References
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