We used to call them “emerging” economies. But when it comes to certain countries’ levels of internationalization, innovation, profitability and economic strength, “emerged” might be a more accurate way to describe them - especially when compared with the recently downgraded market leaders.
This is the focus of the latest IESE Insight management review, which urges global business leaders to get to grips with these “emerging realities.”
10 Countries to Watch
Alicia García-Herrero, the chief economist for Emerging Markets at BBVA, identifies 10 countries that she calls “EAGLEs” which are likely to contribute more to global growth than the G7 average over the next 10 years.
It may come as no surprise that half of the EAGLEs are in Asia. Many of the global innovation trends of recent years have been heavily influenced by the growing capabilities coming from China, India and Southeast Asia, as Arnoud De Meyer, president of Singapore Management University, explains in his article.
And it’s not just Asia: Many Latin American firms are poised to become No. 1 in their respective fields, including Cemex from Mexico and Vale from Brazil. Mauro F. Guillén (Wharton) and Esteban García-Canal (University of Oviedo) highlight what managers of traditional, established multinationals can learn from their emerging market counterparts.
Turning the focus to Africa, Francesc Prior (International University of Catalonia) and IESE’s Javier Santomá find many lessons from the banking sector to help all companies adapt their offer to the customers and circumstances of low-income segments.
New Values
Elsewhere in the magazine, IESE’s Alberto Ribera, together with Veit Etzold (European School of Management and Technology, Berlin) and Philipp Wackerbeck (Booz & Company, Munich), analyzes Islamic banking. Might there be useful lessons for conventional banks as they reconceptualize and rebuild their damaged institutions in the wake of the crisis?
Companies should also be rethinking their offshoring strategies. IESE Prof. Joan E. Ricart and Pablo Agnese (Pompeu Fabra University) propose six steps for using offshoring to create value, rather than just cut costs.
For Xavier Ybargüengoitia, the emerging markets are “a centerpiece.” The CEO of Estates & Wines, part of the luxury goods conglomerate LVMH, tells IESE Prof. Fabrizio Ferraro, “In these countries, there are a lot of wealthy people who are delighted by luxury products. That’s the future.”
Global Trends
There are also thought-provoking columns by Harvard’s Boris Groysberg and IESE professors Pankaj Ghemawat and Adrian Done, whose forthcoming book, Global Trends: Facing Up to a Changing World, challenges business leaders to reflect on what has changed over the past decade, and what will change during the next.
As the world recently marked the 10th anniversary of 9/11, Done cites “war and terror” among 12 big issues that will shape how business is carried out in the coming decade.
“True, we are all busy and overstretched,” he writes. “But take a moment to lift your head from the daily grind to see what’s heading in your direction. The commission set up to investigate the 9/11 attacks famously concluded that the intelligence services had failed to ‘connect the dots.’ Don’t let the same be said of you.”
IESE Insight is a quarterly research-based magazine, published in separate English and Spanish editions. Its premium content is linked to articles from the IESE Insight knowledge portal, which contains research and teaching materials, opinion articles, business indices, audiovisual materials and an extensive database of more than 7,000 scholarly references.
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