Thursday, January 15, 2009

Tech Industry Needs Emerging Market Champions

Vital Wave Consulting and other long-time emerging-market analysts attending the Consumer Electronics Show (CES) in Las Vegas last week were surprised when Intel Chairman Craig Barrett’s keynote address on emerging economies skirted the topic of business growth. Barrett spent his hour on stage sharing anecdotes about the benefits of technology for the economically disadvantaged and touted Intel’s support for a philanthropic partnership with and Save the Children. To be fair to Barrett, the Consumer Electronics Association structured the emerging economies session to focus on corporate social responsibility. And attendees were excited that CES included an emerging economies track at their annual show. However, the lack of discussion on scaled, profitable business growth in emerging markets denied the audience an opportunity to hear directly from Intel’s leader how a multinational corporation can have maximum impact in developing countries.

While Intel’s social initiatives are certainly laudable, they do not compare to the effect of the company’s truly scaled, self-sustaining for-profit activities throughout the developing world. Intel’s distribution channels and innovative technology have had enormous economic impact on local IT industries and the broader economy in many countries. In fashioning his address, Barrett had a rich palette to draw from, including:
  • Intel’s development of the Atom processor – the energy-efficient chips have enabled netbook makers to scale, making laptops more affordable to hundreds of thousands of emerging-market consumers.
  • The development of the Classmate PC reference design – Intel’s answer to OLPC’s XO machine has been borrowed and tweaked by many early netbook manufacturers.
  • Intel’s investment in WiMax – a cost-effective network infrastructure that could extend voice and data services far into underserved areas in Africa, Asia and Latin America.
All of these business initiatives demonstrate that for-profit efforts are usually a better tool for scaled impact than pure philanthropy.

The technology industry could use an unapologetic champion who will talk straight about the benefits of emerging-markets to the bottom line. And, of course, a healthy bottom line means more investment, which brings greater social and economic development to the target market. But there’s little reason to suggest that these social benefits are the basis for the business decisions the company makes. Shareholders, business partners and local governments will all respond positively to the corporate leader who speaks of these markets as viable business opportunities. There are a number of candidates for the role of emerging-market champion. Cisco’s John Chambers came the closest in his inspiring keynote at the end of the CES emerging economies session, calling these markets important leaders in technology evolution and market transitions. But there is still plenty of room on the stage.

Also in the news:

  • Indian entrepreneurs use high-pitched sounds for cash transfer
  • Health applications for OLPC
  • M-Pesa addresses pain point for students and schools

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