Emerging markets are harnessing technology much faster and more enthusiastically than many developed nations because of:
1. Size and scale of the market: In 2017, China and India had around 660 million and 400 million smartphone users, respectively. This compared with only 220 million in the US.
2. Youth Demographic : Almost 90% of people under 30 live in emerging and developing economies, particularly in the Middle East and Africa. These increasingly wealthy and tech-savvy populations now have access to low-cost mobile devices.
3. Mobile penetration :Mobile penetration is growing rapidly and is predicted to reach 5.9 billion by 2025 or 71% of the world’s population – driven by emerging economies of India, China, Pakistan, Indonesia and Bangladesh, Sub-Saharan Africa and Latin America.
4. Big Challenges : Emerging markets simply have big problems to solve and this stimulates innovation. Emerging markets are making a virtue out of financial, geographical and other constraints. The low-tech wallet and payment service M-Pesa is but one example. Venezuela where it is a prime example of an economic disaster where the population have turned to crypto-currencies to protect their assets.
5. Agility: Emerging economies can be agile. The small states, in particular, are testament. An ambitious leader in blockchain adoption is Dubai, which envisions moving all government documents onto a blockchain by 2020, creating a new platform for innovation and huge cost savings.
6. Leapfrogging: Emerging markets can take advantage of their traditional disadvantage and the absence of products, services and infrastructure to develop digital solutions. Mobile penetration will facilitate this advancement. The lack of trust means an openness to new technologies as the arrival of a service, rather than unwelcome change.
7. New Partnerships: New partnerships are being forged with emerging markets. For example, in the India-Russia Strategic Economic Dialogue in 2018, to explore new areas of partnership in artificial intelligence and block chain. Energy partnerships will proliferate as start-ups have started creating low cost blockchain and green-energy based electricity solutions that can light up households across Africa.
8. Private Sector Acceleration : The private sector is driving innovation as governments can’t cope with the pace of innovation and emerging market tech giants will drive innovation even faster.
9. Social Benefit: Emerging markets are now at the forefront of the latest technological developments, from mobile banking and shopping to drones and more. Emerging markets have a lot to gain as the impact of this innovation can improve equity and citizen access to services and ultimately, social impact.