Emerging Economies = Emerging Markets

Mention India, and you will likely start to draw fire about taking away jobs from Americans and sending them offshore, how frustrating it is to deal with customer support in India, etc.  But just a slightly closer look at business news will reveal that businesses are increasingly looking at India (and China and emerging economies in general) as a new and growing market, as well as a labor source.

Two recent articles in the Boston Globe about EMC illustrate exactly this point.   One article titled “EMC sees a bright future in India” immediately attracted a string of vitriolic comments about giving away American jobs, fining American corporations for “moving” jobs to India, and dealing with customer service in India.  But what the article actually said is this (italics are mine):

EMC Corp. of Hopkinton is betting big on India as a major market for data storage hardware and software, and as a key source of first-rate engineering talent.

…“India offers tremendous opportunities in innovation and market potential,’’ said EMC chief financial officer David Goulden during an opening ceremony for the newly expanded Bangalore center.

…In addition, Duplessie said, EMC was “enhancing their Asian customer support with low-cost, English-speaking knowledge workers.’’

Another article, without mentioning India or China in the title, attracted no comments at all, yet spoke to the same direction.

…Meanwhile, Gelsinger saw major growth opportunities at EMC, especially in international markets. “EMC is not nearly as globalized as it needs to be,’’ he said. While Intel derives about 75 percent of its revenue from outside the United States, EMC gets about half its revenue from abroad. Gelsinger believes that EMC must expand its sales in fast-growing overseas markets like China and India.

EMC’s push towards growing markets in emerging economy countries is paralleled by similar strategies by leaders across many industry segments: technology, consumer products and services, pharmaceuticals, and financial services.

A narrow focus on preventing job losses through greater regulation misses the big picture, that growing jobs requires growing businesses, and the greatest opportunities in business growth at this time are in international markets, especially in emerging economy markets.  What’s different in this phase of international business is that while both markets and production are globalized, they are not necessarily in the same country.  Functions are more likely to be regionalized and networked, rather than organized into country silos.  Using EMC as an example, it has R&D centers  in a few key technology hot spots around the world, a regional customer service center for Asian markets in India, and it’s headquartered in the US.  The challenge in front of us is learning how to manage these new global business structures effectively.