Emerging markets increasingly driving global innovation: Gartner

19 June 2007

Mumbai: In today's hyper competitive global business environment, chief executive officers (CEOs) are placing innovation at the top of their agenda but finding that their IT organisations are lacking in visionary thinking and innovation, says a new report by Gartner.

Conversely, organisations operating in highly constrained environments in emerging nations such as China and India are innovating at a faster rate than ever before. The Gartner report said innovation from new, relatively untapped markets is driving global innovation, creating a force that cannot be ignored by organisations in mature markets.

"In our increasingly customer-centric world we are moving away from the traditional view of innovation, as internally managed and R&D focused," said Sandy Shen, research director at Gartner. "Innovation doesn't come from a laboratory. It comes from solving real life problems and responding to everyday needs regardless of how sophisticated the market might be, with the ultimate goal of enriching people's lives."

Gartner analysts examined the increasing global importance of innovation in emerging markets and looked at how this 'disruption from the bottom of the pyramid' can benefit more mature markets during a press conference at the Gartner Symposium / ITxpo, which is being held from 20-23 May in Barcelona, Spain.

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

• Firstly, emerging markets have fewer legacies enabling them to leapfrog technology and commercialise it faster, making them ideal test beds.
  
  
• Secondly, 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.
  
  For example, mobile phones, which require less power and have built-in connectivity are more suitable for emerging markets than PCs. They are also cheaper than PCs and more adaptable to the emerging market environment. Gartner predicts that mobile phones will outnumber PCs by a factor of 15:1 in developing markets by 2010.

• 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.