Indian & Chinese Markets Drive Global Innovation
By CXOtoday Staff
Mumbai, May 22, 2007

Gartner has released a report that shows organisations in developing nations like India and China are advancing at a faster rate. These include innovations from new relatively untapped markets that are creating a force mature markets cannot afford to ignore.

According to Gartner, developing nations are adopting innovation and technology faster than mature markets for three primary reasons.

First, they have fewer legacies enabling them to leapfrog technology and commercialise it faster. Second, in highly constrained environments, which might include poor infrastructure and low affordability, there is an acute need for products that can serve the local market better, rather than products designed for the developed world. Finally, emerging countries such as China and India have the ambition to lead the IT industry in the global market, and innovation is their only way to compete globally.

The firm also noticed that although emerging and mature markets each have different innovation drivers, they often yield the same kind of innovation. "Organisations across the globe may not have the same problems or business drivers, but they could all benefit from the same innovation adapted to meet their local needs," said Sandy Shen, research director, Gartner.

The firm supports this trend with an example of Mobile banking. "SMS money transfer was first introduced in emerging markets because it was not otherwise cost effective to reach people in remote areas. This solution is now being adopted globally by leading carriers and financial institutions to address the inefficiencies of international money transmission. This development is profoundly altering the way people in mature markets use banks and other financial services," said Shen.

According to Gartner's release, India and China are emerging as powerhouses of innovation and creativity. With the help of established Indian IT companies such as Wipro, Infosys and Tata Consulting Services(TCS), IT services account for around half of India's services exports and the IT services market is growing at more than 30 % per year.Today, Chinese companies like Huawei, Lenovo and Haier are stepping up investment in new product research, and aggressively pushing into the global market as low-cost players, ultimately posing a serious threat to global organisations.

"If the growth rates remain constant, the emerging market share could reach almost one-fifth in 2012," said Partha Iyengar, VP and distinguished analyst, Gartner.

"We are looking at immense nations that are rapidly moving from subsistence living to being consumers, which in turn means a large number of new people to sell new technology to," added Shen. "Global companies in mature markets cannot afford to ignore developing nations, given the huge untapped opportunities they offer."