IT and Emerging Markets: The New Nexus

Guest Editor's Introduction • San Murugesan, BRITE Professional Services and University of Western Sydney, Australia • October 2012

sprouting plantsEmerging markets — nations in the process of rapid growth, industrialization, and socioeconomic development -- are the world's new powerhouses. They represent two-thirds of the global population, generate more than 20 percent of its gross domestic product, and are restructuring themselves to foster further growth and development. Although these markets have historically lagged behind advanced economies in adopting and innovatively leveraging IT to address their problems, they are now harnessing it in novel ways in areas including business, education, socioeconomic development, healthcare, and governance — often cleverly addressing the limitations they encounter. New opportunities exist for the IT industry and emerging markets to embrace each other, fostering a new level of nexus. In this issue, Computing Now turns your attention to the progress and prospects of IT in emerging markets.

IT: A Catalyst and an Enabler

IT can play key roles in enhancing emerging countries' socioeconomic status. Realizing that fact, many such countries are now enthusiastically adopting IT and building new infrastructure, leapfrogging adoption of legacy infrastructures. For example, India, China, South Africa, and several other nations were quick to adopt wireless telephony, bypassing landline telephones. Many micro-, small-, and medium-sized businesses and social enterprises in these markets are deploying IT-based solutions to improve productivity, drive innovation, address problems, and meet changing societal demands. Furthermore, individuals — young and old, rich and poor — are embracing IT to improve their quality of life. The IT industry in many of these countries has been growing stronger and attracting major global investments. Companies in matured economies are increasingly outsourcing IT work and business activities to emerging markets.

As recently highlighted in the Economist, some big emerging-market companies are also trying to build goods and services for global markets and are surfacing as new "emerging-market multinationals."

Users in emerging markets are harnessing IT in unusual ways to address their real problems. For example, a healthcare project called mTrac is using cheap mobile phones to save lives in Uganda. Mobile payment systems such as M-Pesa, developed in Kenya, are widely used for making payments and person-to-person money transfers even where banks or bank branches don't exist. Txteagle is a set of mobile applications that support healthcare, work assignments, and payments in more than 100 countries. In India, small, often unorganized, bus operators are using the redBus Internet-based ticketing solution. Other such applications have been deployed or are being developed to cater to the needs of people in emerging markets, as well.

Opportunities Abound

To date, cost has been a major barrier for emerging markets in embracing IT, but IT-as-a-service models based on cloud computing, low-cost mobile devices and communication, free or low-cost open source software, and low-cost mobile apps are lowering the barriers. Indeed, cloud computing and mobile phones are making substantial gains in emerging markets, compared to advanced markets.

A confluence of technical, societal, and political factors is presenting huge opportunities for growth and development in emerging markets, which are now attracting significant interest among businesses, investors, and IT professionals and researchers. Despite the economic deceleration and financial uncertainty in many mature markets, these emerging markets continue to show IT momentum, with the Gartner Group estimating that they will spend a combined US$1.22 trillion on IT in 2012, representing more than 31 percent of the worldwide total. The Boston Consulting Group estimates that consumer markets in China and India will roughly triple by 2020, to reach an astounding $10 trillion annually. As I outlined in my inaugural IT in Emerging Markets department in IT Professional magazine, the rise of IT in emerging markets will present significant prospects and new challenges to IT professionals and businesses.

Innovations in technology, design, service delivery, and business models are needed for IT to make further inroads into the world's emerging markets and embrace the untapped potential.

View through a Peep Hole

Recent issues of IEEE Computer Society magazines IT Professional, Computer, and IEEE Pervasive Computing have all focused on IT in developing countries. As a glimpse of the nexus between IT and emerging markets, this Computing Now theme presents a collection of seven articles focusing on IT trends in emerging markets and how these markets are leveraging IT in novel ways.

India has achieved significant progress and growth in IT and maintains a leadership position globally. In "IT in India," Sowmyanarayanan Sadagopan spotlights that progress and the current scene in India, citing the uptake in entrepreneurship, growth in IT higher education, and conducive government policies as the main drivers for the country's global prominence in IT. He describes India's achievements in IT by outlining some innovative, ambitious, and challenging applications that have been deployed or are in progress. He cautions that, to sustain its leadership position in IT and move up the value chain beyond its dominance in IT services, India's education, research, IT companies, government, and media must continue to innovate.

Poised for growth, Brazil sees information and communication technologies (ICT) as a catalyst for its progress. In "ICT Trends in Brazil," Marcelo Nogueira Cortimiglia and his colleagues present an overview of the huge Brazilian ICT market (US$166 billion) and highlight current trends in hardware, software, telecommunications, and subscriber TV. This article examines various challenges that ICT firms face in Brazil, concluding that Brazilian ICT is set to contribute to the country's social and economic development and to become a primary power in the global economy — if the government and private sector can adequately tackle the issues and challenges.

Cloud computing is changing the technology landscape, and it's becoming increasingly popular in emerging markets, which are enthusiastically embracing it for a host of applications. After flourishing as an established market leader in ICT manufacturing, for example, Taiwan is aspiring to become a major player in offering both cloud services and cloud resources. In "Cloud Computing in Taiwan," William Cheng-Chung Chu and his coauthors discuss ongoing developments in cloud computing in Taiwan and point out that the island nation has "integrated multiple resources — representing government, industry, academia, and research — to initiate strong incentive programs for developing cloud computing." They also highlight that Taiwanese cloud computing systems make significant use of open source software, and they offer some recommendations for successful transformation to clouds.

Mobile payment (m-payment) and financial and banking services conducted via mobile devices (often simple devices with basic capabilities) are widely used in emerging markets despite some limitations of the current systems. In "Mobile Payments in Emerging Markets," Nir Kshetri and Sharad Acharya present an overview of m-payment systems in the emerging economies of Africa, Asia, and Latin America. They highlight that person-to-person money transfer is significant in such areas because it offers financial services to users without traditional bank accounts. M-payments have also helped facilitate emergency response and disaster recovery.

People in emerging markets must be able to affordably access information that's relevant to their needs. Yet, although many people in emerging economies now have cell phones, access costs and user literacy barriers make it difficult to access the information they need. In "Making Technology Invisible in the Developing World," Gary Marsden and his colleagues report on three interesting projects — Spoken Web and Pragati, both based in India, and Big Board in South Africa — that provide convenient access to a wide range of data sources and fit naturally into the users' environment, effectively making the underlying technology invisible.

Providing convenient access to safe drinking water is a key challenge facing many developing countries. Rohit Chaudhri and his colleagues' "Tracking Water Collection in Rural Ethiopia" describes a mobile-phone-based system that gathers and aggregates relevant data to help researchers address the problem.

Information and communication technologies play key roles in political and societal transformations, not only in developed countries but also in emerging markets. In "How ICTs Affect Democracy and Corruption in Emerging Societies," Daniel Soper and Haluk Demirkan examine the extent to which ICT has affected democracy and political corruption in emerging societies. Their analysis reveals fascinating insights about the complex interplay between ICTs and an emerging society's economic, social, and political structures.

For more information on IT in emerging markets, see the Related Resources page.

The Way Forward

As computer scientist Alan Kay said, "The best way to predict the future is to invent it." IT's role and growth in emerging markets will be significant, offering IT professionals, educators, researchers, and businesses the chance to help create a better world in which the power of IT is harnessed to lift the socioeconomic status of the two-thirds of the global population that is largely at the bottom of the pyramid (BOP). To harness the potentials that emerging markets present, IT applications must be relevant to the users' real needs, have local significance, offer value, and be affordable. If the current scenario is an indication of what might be ahead, IT-enabled emerging markets will be a new normal.

I hope this issue of Computing Now motivates you to do what you can to help address the real problems facing people at the BOP by embracing IT innovatively. I also hope it provides insights for capitalizing on IT's untapped potential in these regions. I invite you to share information on novel IT applications deployed in emerging markets, along with your views and ideas on this important topic of growing significance, in the comments section below.

To contribute an article for consideration for the IT in Emerging Markets column in IT Professional, email me your proposal.

San MurugesanSan Murugesan is the director of BRITE Professional Services and an adjunct professor at the University of Western Sydney, Australia. He is a corporate trainer, a consultant, a researcher, and an author. His expertise and interests include cloud computing, green IT, IT for emerging regions, and social Web engineering. He is coeditor of the new book, Harnessing Green IT: Principles and Practices (John Wiley and IEEE Computer Society, September 2012) and Essence of IT Pro 2011 (IEEE Computer Society, 2012). He's also an associate editor in chief of IT Professional. Murugesan is a fellow of the Australian Computer Society, a fellow of the Institution of Electronics and Telecommunication Engineers, a distinguished visitor of the IEEE Computer Society, and a member of the IEEE CS Special Technical Community (STC) on Cloud Computing and Technical Committee on Scalable Computing (TCSC) Steering Committee on Green Computing. Contact him via email san1[at]internode[dot]net, Twitter, or LinkedIn.

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