Sunday, July 13, 2008

The Global Entrepreneur and Frontier Markets

A friend in Atlanta was having furniture manufacturing outsourced in early 1980s to China with supply to North America. A Danish friend at the age of 29 was negotiating in 1980 with a Chinese manufacturer in Hong Kong to out source shoe manufacturing and setting up the supply chain for Europe. Another friend in Atlanta was on his first annual trip of one month in 1984 to design ceramic pottery for the North American market. These trips continue to this day for him.

Today, my friends are high net-worth individuals who could write the book on how to conduct business in burgeoning markets… if only I could persuade them.

All these folks have two things in common (1) They are global entrepreneurs, (2) They predicted a trend of the future and captured it. They were seizing the Frontier markets of the early 1980s.

Today’s Frontier markets like South Africa, Tanzania, Pakistan, Morocco, Egypt, Israel, Jordan, Tunisia, the Gulf Nations, Vietnam, Thailand, Indonesia and a few more including the Eastern European countries, offer the Entrepreneur the opportunity of outsourcing that has been previously captured as stated above.

Yet I believe that a new prospect has emerged. I believe the Frontier markets are comprehending that without adopting innovation they will become emerged and deployed (pun on developed) while facing the same old pains of developed countries. This comprehension must understand that breakthrough innovation is the domain of the entrepreneur. This is where the global entrepreneur engages, the individual who is defining Globalization 3.0 per Thomas Friedman:

... around the year 2000 we entered a whole new era: Globalization 3.0. Globalization 3.0 is shrinking the world from a size small to a size tiny and flattening the playing field at the same time. And while the dynamic force in Globalization 1.0 was countries globalizing and the dynamic force in Globalization 2.0 was companies globalizing, the dynamic force in Globalization 3.0-the thing that gives it its unique character-is the new found power for individuals to collaborate and compete globally ..."

This article here from Arabian Business provides a few interesting insights.

Speed is a property of essence in Frontier markets. Here is an example – New York took say 75 to 100 years to come out of the ground and become what it is from financial to infrastructural standpoints. Dubai is knocking at the door of doing the same in 10 years. If the infrastructure pieces, for example, Information and Communication Technologies can be implemented at exponential speeds,  the business of doing trade and commerce can begin at a far rapid pace than previously imagined. The same old models of conducting business do not apply. As a result, the emerging and frontier markets conduct business in Free Trade Zones with new ones being developed across Asia. FTZ’s allow removal of bureaucratic and taxation barriers for conducting global business – a perfect environment for a G3 entrepreneur. Click here to see an example FTZ - Ras Al Khaimah Free Trade Zone. RAK is the Norhtern most Emirate of United Arab Emirates.

Coming back to the entrepreneur let’s look at ICT as an example, parts of which are in itself becoming the entrepreneur’s domain and belay comprehension by the old regime tied to the wire. Why would a large communications company want to spend money on researching and building out WiMax? They have too much invested in the co-axial or fiber network. They do not have the agility nor the speed and definitely not the desire of companies such as AirBand to fail quickly, recover, rebuild, go and capture new markets.

This is the domain of the G3 entrepreneur who exists independent of borders, can conduct business anywhere, can solve the needs of multiple demographics with varied solutions and who will find business in non-local geographies.

This makes me wonder whether my friend at AirBand has expanded to Tianjin or Mumbai. And if not, then why not?

No comments: