"IT is, and will be, a catalyst for change in emerging markets. The IT industry and IT professionals can create a major impact in emerging markets as they did, and continue to do, in the developed world. They can improve the lives of billions of people at the bottom of the pyramid and thereby gain significant benefits."

Opening Statement

Be the change that you wish to see in the world.

-- Mahatma Gandhi

IT is a catalyst for change -- particularly for changing the lives and well-being of billions of people at the bottom of the pyramid in emerging markets. As emerging markets are beginning to use IT in a big way for their socioeconomic development, they present enormous opportunities that are yet to be fully tapped. As a result, they are attracting growing interest among the IT industry, businesses, and researchers. So what are these emerging markets and what opportunities do they present to IT and vice versa? Are there any major barriers to realizing those opportunities? Let's take a look.

EMERGING MARKETS

Wikipedia defines emerging markets as "nations with social or business activity in the process of rapid growth and industrialization."¹ Emerging markets are bigger than most people realize -- in their size, population, and market potential. They account for two-thirds of the world's population and over 20% of the world's GDP.² They also represent a diverse group of societies that are restructuring their economies for growth and further development. They are increasingly using IT services, and each of them is important as an individual market. Combined, the group as a whole has a significant impact on the IT sector and profession. IT has huge potential to transform emerging markets in several areas -- education, healthcare, business, economic and human development, and government. Indeed, emerging markets are the new powerhouses of the world economy. According to BusinessWeek:³

As we near the second decade of the 21st century, the balance of global economic power is shifting toward the developing and emerging regions of the world. By one measure, the developing and emerging world is already producing nearly 50% of global economic output.

The BRIC countries -- Brazil, Russia, India, and China -- along with the rapidly growing economies of Mexico, Malaysia, Indonesia, and others, are now driving global growth. China is predicted to become the largest economy in the world by 2040, if not sooner. India's economy will soon eclipse that of Japan's. Brazil is a global leader in commodities but also a major contributor in more advanced industries, including regional passenger aircraft (Embraer). Even African countries are becoming more attractive locations for trade and investment, despite continued underdevelopment and social challenges.

Along with the growing economic power comes a commensurate shift in political influence for large emerging markets, with dramatic consequences for traditional military and strategic alliances. For these reasons, Antoine van Agtmael, who first coined the term "emerging markets," argues the coming century will be "the Emerging Markets Century."

All these trends and developments are creating increasing interest in emerging markets.

OPPORTUNITIES AND CHALLENGES

People in emerging markets are increasingly using mobile phones; as you will see in the articles in this issue, even the simplest, low-end mobile phones are being used to solve real problems in innovative ways. As mobile communications networks have expanded widely within emerging markets, many people -- including the illiterate and poor -- are now using mobile phones and new, innovative applications in areas such as education, healthcare, job creation, agriculture, business, financial services, and entertainment. Industry sectors such as banking, healthcare, education, and commerce are already benefiting from innovative IT services that allow these users access to vital information that was previously inaccessible. Access to the Internet through smart mobile phones and low-cost computers is beginning to support a dramatic transformation in emerging markets.

The collaboration of IT and emerging markets presents new opportunities from which both sides can benefit significantly. The IT industry, IT professionals, and researchers have begun to explore how they can seize the opportunities that emerging markets present as well how they can use IT to address the real-world problems emerging economies face. Emerging markets, however, have different requirements than developed markets and pose some unique challenges. As Doug Raymond advises in a Harvard Business Review management tip:⁴

Over the next three decades, economists predict that the bulk of economic growth will be in emerging markets like India, China, and Brazil. Now is the time to figure out how to serve these markets -- but be warned that you'll need new approaches to succeed. Start by focusing ... on addressing societal needs that affect the masses in these areas.... Be sure whatever solutions you develop are cost-effective and affordable to consumers. Whenever possible, leverage NGOs and social entrepreneurs who have worked closely with the consumers you are trying to understand.

Besides being relevant to local needs, IT applications must address cultural factors and linguistic preferences and options. Further, in developing and deploying applications for emerging markets, the IT industry must take an end-to-end perspective. To create economically sustainable, scalable solutions, it must address not only the front-end, user-facing applications and access devices, but also the communications channels (wireless and satellite communications, communications bandwidth, coverage) and the back-end systems (data centers and other infrastructure services). Nor can one assume that there is an "average" IT user or "typical" system when deploying applications to such large markets with vastly different needs and capacities. Understanding the challenges unique to emerging markets will give the IT industry and IT professionals greater opportunities to extend IT's reach to the entire world, making it a better place than it is now.

IN THIS ISSUE

We begin the issue with an interesting discussion about generating IT innovations for emerging markets by David Croslin, consultant and author of Innovate the Future. He points out that the assumptions companies make about the rest of the world limit their vision and ability to innovate and their confidence in their beliefs "limits the abilities of most companies to penetrate new markets." He emphasizes that a product's "transformative value" to a consumer or an enterprise depends on several factors (e.g., cost, infrastructure challenges, training requirements) and these must be taken into account in new product/application development. He also offers important takeaways to help organizations succeed in emerging markets.

Crowdsourcing, in which individuals collectively contribute to addressing a problem, is gaining much traction now. Enterprises and community organizations -- in both developed and emerging markets -- are increasingly using crowdsourcing to address specific problems, to get users involved in the product development process, or to get a better sense of their customers' needs and feelings. Radhika Jain, a professor of IS at Baruch College, explores the tremendous potential of crowdsourcing for meeting the needs of people in emerging markets in various domains. She also discusses the challenges facing crowdsourcing initiatives and critical success factors for overcoming them. Illustrating with specific examples, Jain provides helpful insights on how organizations can successfully implement crowdsourcing initiatives for societal development.

Next, Chaka Chaka, a senior lecturer at Walter Sisulu University in South Africa, describes three remarkable mobile applications that illustrate "innovative attempts at leveraging mobility to make significant changes in the lives of South African youth, especially those at the base of the socioeconomic pyramid." One instant messaging application helps primary and high school students learn mathematics, a healthcare application allows youth to "source each other's advice and tap into counselors' advice regarding matters related to HIV/AIDS and other aspects of their lives," and another mobile application platform enables users to do assigned tasks on their mobile phones and get rewarded for their work. As Chaka emphasizes, these applications demonstrate how transformative technologies, such as cheap mobile phones, can be harnessed to help disadvantaged people in emerging markets transform their lives.

Governments play a major role in establishing IT infrastructure and fostering the use of IT for various applications that help improve education, healthcare, and socioeconomic development. In our next article, Sherif Kamel, dean of the School of Business at The American University in Cairo, discusses how the government of Egypt took active measures and involved the private sector and civil society in building the required information infrastructure in that country. He outlines the evolution of information and communications technology (ICT) in Egypt and describes key elements of the Egyptian Information Society Initiative (EISI), which translates the government's ICT strategy into specific initiatives and programs, from eReadiness (establishing the communications infrastructure and increasing citizens' access to technology) to the ICT Export Initiative.

The ability to make payments securely anytime, anywhere using mobile phones is a key to widespread use of mobile phones for several different kinds of applications. This is particularly important in emerging markets, where mobile phones are, and will continue to be, more widely used than PCs. In our concluding article, Hao Zhao, Sead Muftic, and Feng Zhang, researchers at Royal Institute of Technologies in Sweden, address this need and briefly describe their new Secure Mobile Wallet system. They identify three important trends in mobile networks: provision of different kinds of mobile services using applications stored in the memory of mobile phones; migration of mobile technologies, networks, and applications toward an open and service-oriented architecture; and improved security of mobile communications and applications. They argue these trends drive the establishment of an open service-oriented architecture for secure mobile payment transactions and present a mobile smart wallet system that uses a Javacard applet stored in a mobile phone's SIM chip. Their Secure Mobile Wallet supports several features, including banking; bill payment using a bank account, credit cards, or electronic cash; payment of parking fees; management and use of prepaid airtime; functions related to microloans; and mobile ticketing.

These five articles together present a brief account of IT's enormous promise in emerging markets and illustrate some innovative applications of IT that address the real needs of the people in these markets.

THE WAY AHEAD

IT is, and will be, a catalyst for change in emerging markets. The IT industry and IT professionals can create a major impact in emerging markets as they did, and continue to do, in the developed world. They can improve the lives of billions of people at the bottom of the pyramid and thereby gain significant benefits. I hope the articles presented here help create an awareness of what has been done and what can be, and should be, done. I invite you to share your thoughts on and experiences in putting IT to real work in emerging markets for the benefit of one and all.

The world is moving so fast these days that the man who says it can't be done is generally interrupted by someone doing it.

-- Elbert Hubbard

ENDNOTES

¹ "Emerging Markets." Wikipedia (http://en.wikipedia.org/wiki/Emerging_markets).

² "Journal Overview." International Journal of Emerging Markets, 2010 (www.emeraldinsight.com/products/journals/journals.htm?id=ijoem).

³ Doh, Jonathan. "Why Business Schools Should Focus on Emerging Markets." Bloomberg Businessweek, 27 July 2009 (www.businessweek.com/bschools/content/jul2009/bs20090727_552599.htm?link_position=link4).

⁴ Raymond, Doug. "Reinvent Your R&D for Emerging Markets." Harvard Business Review Management Tip of the Day, 2 September 2009 (http://web.hbr.org/email/archive/managementtip.php?date=090209).

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