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OPINION: Use of tech unlocks enticing opportunities in emerging markets

By , ITWeb
10 Sep 2015

OPINION: Use of tech unlocks enticing opportunities in emerging markets

Operating offices in a new country is stressful enough without having to worry about the information technology infrastructure. Did you know that encrypting communications in some countries could see the directors end up in jail and that others won't allow you to make any VoIP calls? In some locations you might have to wait for up to six months to get a connection or face lengthy delays and punitive charges on the import of essential equipment.

Whenever economic and regulatory challenges arise, businesses in the developed world tend to prepare for the difficult times and focus on local business until the storm subsides. This may seem like a survival strategy, but being too cautious may be a grave business mistake in the current economical environment.

Fast multi-market growth may seem unrealistic in a world where growth has slowed down considerably, even in emerging markets. China's economy is expanding at the slowest rate in more than a decade and South Africa's 2% growth is on par with many other large emerging markets such as Mexico, Russia, and Brazil.

However, many international entities recognise that these markets remain the key to future profits. According to a report by McKinsey & Company, annual consumption in emerging markets will reach US$30 trillion by 2025, up from US$12 trillion in 2010. The report termed it "the biggest growth opportunity in the history of capitalism".

During the same period, the number of the consuming class will swell from 2.4 billion to 4.2 billion people. In Africa alone, the number of consumers is expected to double and rise from a current 1 billion people to 2 billion by 2050.

Multinationals that do not recognise the opportunities in emerging markets are turning their backs on the opportunity of several lifetimes. This is also true for African businesses that are hesitant to expand into neighbouring markets. However, expansion cannot happen without taking regional realities into account.

Those who expand into new regions find that their business models are challenged by different tax regimes, cultures, technology adoption, and human resourcing. Even businesses that only operate in one region are often frustrated by international service providers that attempt to crowbar their international approach into a region with particular needs. That is why we regard it as so important to fuse local insight with global coverage.

To realise the opportunities that these markets offer, it is important to gain insight into the complexities of communications regulations, import rules and local installation. One of the biggest success factors when expanding into a new region is to accelerate the time to market. It is therefore vital that your IT solutions provider is able to bring new sites online as soon as possible, and is able to deploy the latest technologies in any location.

In recent years, there has been much talk about the opportunities in Africa for large multinationals in fields such as oil and gas. However, these industries are creating a swelling middle class that has grown by 230% in the past 14 years in Africa's largest 11 economies, according to research by Standard Bank.

With these growth rates forecast to continue, it is no longer just industrial multinationals that should sit up and take notice of the opportunities.

*Mark McCallum is the director, chief technology officer, Orange Business Services.

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