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April 13, 2012 by admin

Reuters Summit – ‘Monstrous risks’ in

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Reuters Summit – ‘Monstrous risks’ in emerging markets

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Richard Bernstein Capital Management LLC.’s Chief Executive Officer (CEO) Richard Bernstein speaks at the Reuters Investment Outlook Summit in New York June 7, 2010.

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Credit: Reuters/Brendan McDermid/Files

By Manuela Badawy and Jennifer Ablan

NEW YORK | Thu Jun 9, 2011 11:21am IST

NEW YORK (Reuters) – Emerging markets face “monstrous” risks this year, with investors continually ignoring intensifying inflationary pressures and credit bubbles, leading market strategist Richard Bernstein warned on Wednesday.

Emerging markets have been the darling of the financial world since 2009, as global investors have pursued stronger returns and driven by a belief that countries such as China and Brazil will lead global growth in the next few years, while developed world economies remain nearly stagnant.

Bernstein, who now runs his own firm after being chief investment strategist for Merrill Lynch & Co, said the love affair with emerging markets is overdone.

“I think what people are completely missing is that the risk is not here in the United States,” he told the Reuters 2011 Investment Outlook Summit. “The risk is in emerging markets. There are just monstrous risks in emerging markets right now in my opinion.”

Red flags are mounting.

Brazil’s and India’s government yield curves are inverting, a condition in which short-term rates rise above longer yields. Historically, such an inversion almost invariably precedes a recession, as investors temporarily accept lower long rates in anticipation of the decline in yields that typically accompanies an economic downturn.

Also, China’s economy is slowing quickly from its double-digit pace, as authorities there have adopted policy tightening measures.

So far this year, the MSCI Emerging Market equity index is down 0.6 percent after rising 16.4 percent in 2010 and jumping 74.5 percent in 2009.

Bernstein is not alone in his caution for Emerging Markets.

John Paul Smith, chief emerging equity strategist at Deutsche Bank, also told the Reuters Summit that uncertainty over the Chinese economy is clouding the outlook for emerging equities. He recommended a 10-20 percent underweight on the sector over the next six months.

“There’s a significant chance we get a fairly major sell-off,” he said of emerging markets. “China is so untransparent but massively important for asset classes and global markets.”

Joyce Chang, global head of emerging markets research at JPMorgan, said the rate cycle for Brazil, Chile and Israel is not over. “Right now, 16 emerging market central banks have actually raised rates since the beginning of the year. But on average, they’ve raised pretty modestly — only 51 basis points. That’s very modest for 6 percent growth.” Between now and the end of the year, Chang sees another 60 basis points more of tightening.

Meanwhile, Bernstein noted that the Standard & Poor’s 500 Index is up 1.7 percent this year and that U.S. equities have been the better bet than emerging markets over the last two years.

A government yield curve in general would be upward sloping. But the signal that there’s increased risk of a bear market is not at the beginning of a tightening cycle, it’s when a central bank has tightened too much, he said. The markets almost always take notice.

“How do you know when the central bank has tightened too much? It’s when the yield curve inverts. Historically that has been a fantastic indicator,” Bernstein said.

Indian and Brazil’s yield curve inverted last week.

“If you look at inverted yield curves around the world, the most inverted yield curves are Greece, Ireland and Portugal, and then comes India and Brazil. There is your warning sign that no one is talking about,” he said.

Inflation has been creeping up in Brazil and India, where the central bank is expected to raise its key interest rate to 12.25 after the close of market on Wednesday.

Bernstein said emerging market investors are putting a blind eye to the warning signals of a deep decline in emerging markets.

“The common thing you hear, is ‘well, they are overheating,’ which is such a positive spin,” Bernstein said. “The markets are still priced for very rapid unhindered growth, and I just think the probability of that is getting less and less.”

(Reporting by Manuela Badawy; Editing by Leslie Adler and Andrew Hay)


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April 10, 2012 by admin

Emerging Markets News Articles Emerging Stock Markets Impact …

Globalization and Unemployment

By relocating some parts of international supply chains, globalization has been affecting the price of goods, job patterns, and wages almost everywhere. It is changing the structure of individual economies in ways that affect different groups within those countries differently. In the advanced economies, it is redistributing employment opportunities and incomes

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Russia Stocks Soar on Rising Oil Prices

Of the rapidly growing BRIC countries Russia has always been a sort of odd man out. While the others have registered double-digit or near double-digit growth for years, the Russian economy has grown at a much more moderate pace. But lately, Russia’s economy has been benefiting from what many other nations, including the United States, are struggling with

‘Latin American Decade’ or Wishful Thinking?

‘Will 2011 be the dawn of the Latin American decade?’ asked the headline of a Standard & Poor’s webcast. When I saw it, I wondered whether the firm was making a big blunder, or I was missing the biggest economic story in the region. The headline was only the latest of several optimistic reports about Latin America’s economies. All of a sudden, Latin America is becoming an emerging economic star

Forget the BRICs: How to Invest in Emerging Markets

Jim O’Neill, chairman of Goldman Sachs Asset Management, singled out the four BRIC countries in 2001, but now he’s decided to drop the term BRIC. That’s because he’s adding Mexico, South Korea, Turkey, and Indonesia to the previous BRIC countries, and referring to the group as ‘growth markets.’ Should this new distinction matter to the individual investor?

Latin America’s Economic Bonanza May Be Short-Lived

There have been big headlines in recent weeks about projections that Brazil will become the world’s fifth-largest economy in five years, and that Latin America in general will become a new global economic star. But there are little-known data that should raise questions about such optimistic forecasts

Growth Expected to Continue in Emerging Markets in 2011

Traffic is intense. Modestly powered taxis compete daily for space on streets crowded with trucks, motorcycles, standing-room-only buses and sleek new luxury cars. This is the sound of an emerging market economy that, while it may not always turn in 9 percent gross domestic product growth, seems destined to put up at least 5 percent annually thanks to demographics and an improving living standard

Best Emerging Markets Funds for the Long Term

Even amid global uncertainty, emerging markets funds have surged in 2010. The average emerging market fund gained about 19 percent during the third quarter, according to Morningstar. U.S. stock funds gained an annualized 12 percent over the same time period. Here are U.S. News’s best emerging markets funds for the long term.


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March 30, 2012 by admin

Spirits groups join emerging market party

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Spirits groups join emerging market party

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A bartender prepares a drink for customers at a bar in a luxury hotel in Mumbai November 22, 2008.

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Credit: Reuters/Arko Datta/Files

By David Jones

LONDON | Wed Feb 29, 2012 3:24pm IST

LONDON (Reuters) – The world’s biggest spirits groups were late to exploit demand from emerging markets and a wave of acquisitions over the next few years looks likely as they play catch-up.

The likes of Diageo (DGE.L) and Pernod Ricard (PERP.PA) delayed their entry to the emerging markets party because they assumed drinkers in China, India and Mexico would not pay up for premium whiskies and vodkas in preference to local spirits.

That is changing as increasingly affluent consumers in these countries get a taste for Johnnie Walker whisky and Absolut vodka and the big groups need a network to get these expensive imported tipples in front of their newly-found customers.

With a European market in decline and North America in only slow recovery, they have taken a fresh look and found Chinese drinkers will drink scotch whisky as well as local baijiu, Brazilians go for vodka in the same bar as cachaca, prompting them to scan the globe for local spirit acquisition targets.

World Number one Diageo struck three spirits deals last year to drive its emerging market growth, while arch rival Pernod is focused a smaller deals as it looks to cut debt after its recent big Vin & Sprit acquisition which brought it Absolut vodka.

“Diageo has a thirst for emerging markets and is looking for deals in Mexico, India and China. Pernod is a little further behind until it manages to cut its debt,” said one investment banker who has worked for Diageo in the past.

He says Diageo is looking to forge a new deal with the owners of Jose Cuervo tequila not only with eyes on controlling the brand but also opening up distribution in Mexico, which is a key growth market in its fastest growing region, Latin America.

Diageo’s distribution deal for Cuervo in most markets outside Mexico with owners the Beckmann family, ends in June 2013 and Diageo has said an equity participation is the bare minimum that it would accept for a new deal although it would be keen to buy the business, which analysts value at $3.4 billion.

There is long-standing speculation that Diageo may revive talks on a deal with India’s biggest liquor maker United Spirits (UNSP.NS), controlled by Vijay Mallya. A deal may be more likely with the Indian tycoon under pressure from his majority-owned, financially stretched Kingfisher Airlines.

The London-based group might also build on its stakes in China’s Sichuan Shuijingfang and Vietnam’s No 1 spirits group Hanoi Liquor as it tries to make good on its target of doubling the Asia Pacific’s contribution to sales to 20 percent by 2015.

Diageo chief executive Paul Walsh says the current driver behind the group’s growth was its scotch whisky, vodka and beer brands in emerging markets in its first half to end-December 2011, helped by acquisitions, which boosted the group’s emerging business to almost 40 percent of its global sales.

“The focus of our investment in the emerging markets has continued again this year and in the half we increased marketing spend there by 20 percent. We have also expanded our presence through acquisitions which have given us leading brands in premium local spirits and beer,” said Walsh.

He is looking to push that near-40 percent share of sales in emerging markets to 50 percent by 2015, and bankers believe deals will be high on his agenda to plug into these high growth markets which grew sales 18 percent in its first half.

“We would expect to see further deals in Asia Pacific and Latin America this year, and China and Mexico will be the key areas to watch,” said a second banker who has worked on emerging market drinks deals.

The group has been busy in 2011 getting an agreement to raise its stake in Shuijingfang, push up its stake in Hanoi Liquor to 30 percent in August 2011, and the same month it bought Turkey’s No 1 spirits group and raki-maker Mey Icki for 1.3 billion pounds.

In Africa, Diageo’s attention has been on beer as it bought Tanzania’s No 2 beermaker Serengeti Breweries in October 2010 and then Ethiopian brewer Met Abo in January 2012.

Analyst Trevor Stirling at Bernstein says the market has responded warmly to Diageo’s increased emphasis on emerging markets, while Deutsche Bank’s Jamie Isenwater said it was the emerging markets that drove a beat in half-year sales forecasts.

Shares in Diageo, which makes Johnnie Walker, Smirnoff vodka and Guinness beer, have risen nearly 36 percent in the last six months to outperform the FTSE 100 index by 15 percent, while Pernod shares have seen an identical percentage increase.

World No 2 spirits group Pernod Ricard sees a similar 39 percent share to Diageo of its sales in emerging markets, and Chief Executive Pierre Pringuet says if current growth rates continue it should hit the 50 percent level in 2 to 3 years time, again in line with its bigger rival.

Pringuet has ruled out big strategic acquisitions in the billions of euros for the next 12-18 months as it pays down debt, but smaller deals are very much on the cards such as when it recently took a minority stake in Avion tequila with the option of increasing that holding to 100 percent.

“In emerging markets we are seeing a great variety of geographic growth in Latin America and Africa as well as Asia. We see no sign of a loosening of this trend in the coming months and years,” Pringuet said.

Paris-based Pernod, which makes Chivas Regal whisky, Absolut and Martell cognac, is seeing strong growth in the BRIC nations of Brazil, Russia, India and China, but also in Mexico, Turkey, Poland and Vietnam, he added.

China is now Pernod’s second biggest market after the United States where it inherited a small joint venture in Chinese baijiu from its 5.7 billion euro Vin & Sprit deal in 2008, and give it an avenue into this large local spirits market.

Pringuet says imported spirits only make up 1 percent of the vast Chinese market at around 5 million 12-bottle cases and so both imported and local prices are important for the group.

It was the Vin & Sprit deal which loaded Pernod with debt and Pringuet said its debt/EBITDA ratio at end-June 2012 should fall to 3.9 times, but it would need to decline to 3 times for him to consider big deals. Diageo has more flexibility for deals as its current debt/EBITDA ratio is around 2.

(Reporting by David Jones; Editing by Chris Wickham)


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March 25, 2012 by admin

Capturing Global Opportunities: The Emerging Markets Challenge …

Capturing Global Opportunities: The Emerging Markets Challenge

Dominique Turcq

Capturing Global Opportunities: The Emerging Markets Challenge

Globalization has become a fashionable topic, and most controversial one too. It soon drags anyone trying to understand the new dimensions of this old phenomena onto unfamiliar grounds: the rise of many countries considered until now as relatively marginal or at least not relevant as markets in their own right, the so-called Emerging Markets. For many, the main issue seems to be whether they represent a Cornucopia or a Pandora box for Western companies. The simple answer is Sboth, depending on the players. The more subtle one consists in recognizing that the question is irrelevant: it relies on the belief that Sthe West i.e the OECD still constitutes a rich and relatively closed community, like a thermodynamic system in the midst of an infinite source. But this is exactly what globalization is not about: OECD and emerging economies will not remain for ever two relatively separate entities marginally exchanging goods, investments and services. The convergence and interdependency processes have started. It will take several decades to complete, may be more than a century, but it is irreversible, promoted by exploding communication technologies and a GDP growth that most parts of the world are experiencing. Therefore, while turning greedy eyes toward masses of consumers in emerging countries or fearing the invasion of new players into their industries, Western companies should not indulge into too many existential questions. While it is natural to hesitate on where to go and how to start, it would not be wise to row backward and desperately think that the old safe shores can be seen again. This document is about Emerging Markets and how they present a dramatic challenge to all actors of the economic scene. It is only about the economic and managerial dimension. It does not deal with politics, ecology or sociology. It is a short summary based on a two year study on the managerial implications of the rise of Emerging Markets into the global arena. It is based on a large series of companies case studies, documented through experience, desk research and interviews. The study focused largely, but not uniquely, on four countries (China, India, Brazil, Mexico) and on three industries (Auto Components, Packaged Consumer Goods, Personal Financial Services). Although the most important part of the world of Emerging Markets is in Asia, the authors considered important not to focus only on Asia but to include also significant examples of Latin American economies. None of the sub-components of this work has yet been published. It comprises two major parts: 1. An analysis of the size and the diversity of the challenge presented today and tomorrow by the Emerging Markets. 2. An analysis of the Sbest practice managerial implications for companies wanting to benefit from the resulting opportunities.

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March 18, 2012 by admin

Emerging markets join the dividend race

Emerging markets join the dividend race

Mon Mar 12, 2012 3:05am EDT

[ - ] Text [ + ]

By Sujata Rao

LONDON (Reuters) – Global investors in search of high-dividend equity plays are heading to emerging markets, abandoning their view of these stocks as a predominantly growth-based investment.

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It marks another milestone in the sector’s global coming of age.

The trend is part of a broader shift that is recasting equities as yield-bearing, income-providing assets — natural at a time when U.S. Treasury yields have collapsed to near-zero but world stocks still carry dividend yields of around 3 percent.

Emerging equities were not until recently part of income seekers’ horizon as companies in the developing world have generally preferred to use profits to grow the business rather than give them to shareholders. Hence the perception that EM investments will offer share price gains but little income.

But a flurry of fund launches over the past year testify to a distinct shift, not just in investor attitudes but also in emerging companies’ dividend policies.

This year, emerging companies will pay 35 percent of retained earnings as dividends, Thomson Reuters data shows. That is a third above 2000 levels and in South Africa or Taiwan, payout ratios will be as high as 45-50 percent.

This has pushed emerging dividend yields – the ratio of dividends to the share price – to 2.6 percent, just below the developed market average. In some markets it is a lot higher.

“People are realizing you can actually get decent income in emerging markets, an area you didn’t normally associate with income,” said Julian Mayo, who manages an equity income fund at specialist emerging markets investor Charlemagne Capital. Continued…


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March 16, 2012 by admin

You May Have More In Emerging Markets Than You Thought …

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(By Kevin McDevitt, CFA) There’s good news for those interested in capitalizing on growth in emerging markets–you probably already have more exposure than you think. When you look at where companies sell their products, not simply where they are domiciled or on what stock exchange their shares trade, an interesting picture emerges.

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If you focus purely on conventional labels, most diversified foreign-stock funds or world-stock funds don’t have significant emerging-markets stakes. The typical foreign large-blend fund has less than 8% of its assets in emerging markets, and the average world-stock offering has less than 7%. (Not surprisingly, the average foreign large-growth fund has far more–at nearly 15% of assets.)

Economic Versus Equity Market Exposure

Because of these relatively small average weightings, the traditional view has been that to get significant emerging-markets exposure, investors would need to buy a diversified emerging-markets fund, or even a regional or single-country fund. Thishas tied in with the notion that regardless of where a company does business, its stock price will usually move with its home market. This has tended to be true especially in the short run, where emerging markets have often moved together during corrections.

Over the long haul, however, a company’s value will depend more upon its cash flows and less on where it isheadquartered. With this in mind, many equity managers have been looking for companies that will benefit from economic growth in emerging markets, regardless of where those companies are based.

This is the idea, for example, behind American Funds New World ‘s ( NEWFX ) unconventional approach. While the majority of its assets are invested in companies that are domiciled in emerging markets, a fourth to a half of its portfolio is typically found in developed-markets companies that do business in emerging markets. (The fund usually has 10%-20% of assets in bonds, too.)

This currently includes consumer-staples company Nestle ( NSRGY ). It’s headquartered in Switzerland but derives about a third of its sales from emerging markets. About 40% of Spanish telecom Telefonica’s ( TEF ) revenues come from Latin America.

Such Europe stocks, though, have been a slight drag on New World’s performance relative to other emerging-markets funds, as emerging-markets equities have beaten developed-markets equities during the past decade. The fund has held its own, gaining more than 12% annually.


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March 15, 2012 by admin

Emerging Markets Monitor – Business Monitor

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Emerging Markets Monitor

Emerging Markets Monitor (EMM) provides subscribers with the latest analysis, forecasts and ratings on fixed income, FX, interest rates, commodities, equity markets and derivatives across Asia, Emerging Europe, Latin America, the Middle East and Africa. Produced by Business Monitor International, the emerging market specialists, EMM systematically covers the latest market developments for each region.

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The service includes online daily access, a 24-month searchable archive of articles and data, and PDF access to the weekly Emerging Markets Monitor reports.

Complete Coverage of Fixed Income, FX, Interest Rates, Commodities, Equities and Funds across Emerging Markets

Currency Forecasts Full forecast scenarios for emerging market currencies and interest rates. BMIs analysts detail not only their two year forecasts, the technical outlook and their core view, but also the risks to their main scenario.

Market Strategies Specific market strategies on external and local debt markets, currencies and equity indices across emerging markets.

Sovereign Risk Ratings BMI produces its own Emerging Markets Sovereign Risk Rating Index. This index aims to capture governments ability to pay and willingness to pay their external debt burden. This goes beyond the normal ratings agency approach in that BMI separately quantifies the political and economic factors affecting debt service, and also incorporates a forward-looking market element that determines whether the underlying fundamentals of a given credit are reflected in the price of the benchmark bond.

Commodity Market Analysis Every week EMM analyses the technical and fundamental outlook for the commodity universe as a whole, leveraging off our extensive supply and demand databases, together with our macro-economic forecasts. In addition, BMI produces forecasts for 16 commodities across industrial metal, soft commodity and energy complexes, with a full forecast being included in EMM every week.


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March 11, 2012 by admin

Business must fill voids in emerging market

Tax putting the brakes on small business growth

11 Jun 2010

In contrast, the entrepreneurs from emerging markets were far more involved in the communities from which they had emerged.

Most boasted charitable foundations, but also financed and ran schools, universities, and hospitals, as well as leading house-building and infrastructure projects.

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Guy Zarzavatdjian, managing partner for growth capital at private equity group 3i, was the chairman of the Ernst & Young Global Entrepreneur of the Year competition judges’ panel. He admitted that assessing the social impact stories proved the hardest task. “The environment they have in Asia facilitates a certain type of CSR whereas Europe and America is more constrained,” he said.

The value of such social investments in emerging markets and why Western companies looking to expand should consider making it a core feature of their business plans is tackled in the latest book by Harvard Business School professors Tarun Khanna and Krishna Palepu.

They have spent 15 years studying how international companies operate in emerging markets, in particular India and China.

The book’s central observation is that “institutional voids” exist in emerging markets, from the gaps in the judiciary to labour market and education limitations and it recommends that Western businesses assess these gaps as potential business opportunities.

The professors then note that emerging market entrepreneurs make social investment decisions not simply for moral reasons but are acting because filling these voids is “imperative” for their businesses.

While talking to Prof Khanna in London recently, he said: “[American economist] Milton Friedman is reported to have said: ‘The business of business is business.’ I am saying, ‘Not really’.

“You may be Procter & Gamble and selling soap but if you are in India you may also have to do housing. I am saying that it might very well be in your shareholders’ interests that you deal with shortages of housing.”

He added: “It is self-serving in the long run. Companies will slant what they contribute in a way that favours them. But they are still providing their expertise.”

The “voids” are numerous and include third-party certification of claims by suppliers or customers, such as the adoption of international standards; market information analysers, such as Which? magazine; goods and services aggregators, such as Tesco; and transaction facilitators such as credit card issuers.

Profs Khanna and Palepu argue that Western companies looking to trade in emerging markets have to identify these voids and assess their impact on their existing ways of doing business.

The book contains a large number of case study examples of companies that have exploited this idea well, such as India’s Tata Consulting, and those that have struggled, such as Microsoft in China and Wal-Mart in Korea.

It notes that the list of corporate towns in India and China is a long one, but they are also common elsewhere in Asia. They echo the 19th century role played by large Western firms such as chocolate makers Hershey and Cadbury in the US and UK.

“You are becoming seen as a corporate citizen and over time that builds you some currency to participate. Most companies have taken 10 to 15 years to work this out,” said Prof Khanna.

He added that if companies do not feel comfortable with tackling “voids” they should seriously consider not entering the market at all.

Prof Khanna is conscious that Western multinationals may feel uncomfortable with the idea of direct, branded social investment. It could smack of economic imperialism.

But he added: “The mistakes of the past have informed this caution. It is a good thing because they don’t want to repeat the mistakes. But it’s the wrong lesson to draw as they can be agents of change. In instance after instance, there is an acceptance that there’s value to be added.”

I put this to some of the emerging market entrepreneurs at the Ernst & Young awards in Monaco.

Datuk Shahril Shamsuddin, chief executive of the Sapura Group, which ranges from secure communications, to oil and gas and education information technology, said simply: “It’s not imperialism. It is good business sense.”

He cited Sapura’s contract to install and maintain telecommunications masts on the Indonesian island of Borneo.

He said when they erect a mast in the countryside they also dig a well or construct a medical centre or school. “The local farmers are pleased that we do that so they look after the masts and prevent them from getting damaged,” said Mr Shamsuddin.

Kris Taenar Wiluan, founder of Indonesian oil and gas services company PT Citra Tubindo, has built hospitals, sports centres, schools, orphanages and provided health care in the north Indonesian island of Batam, where he operates.

He said: “I think a lot of multi-national companies are starting to realise that this is part of the business.”

Winning in Emerging Markets: A Road Map for Strategy and Execution is published by Harvard Business Press, price 24.99.


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March 11, 2012 by admin

Cloud Computing – A Game Changer in

By Erasmus Montanus

In emerging markets it might be hard to find the money to start up a business. Could cloud computing be a game changer in these markets?

The emerging markets are definitely interesting to cloud developers and providers. Cloud computing is popular because of the low running costs and low need of knowledge, but for the emerging markets, there are still obstacles to overcome.

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Advantages.

One of the main advantages with cloud computing is the low cost of implementation. You don’t necessarily need a server, but can instead use of one of the many cloud providers out there. Most small and medium businesses will find that the cloud has a solution to suit their needs. Furthermore this also means that you won’t have to pay for an expensive license. As we’ve seen in both webOS’s and dedicated cloud OS’s most of the software bundled with an OS is included in the monthly subscription or even free. Furthermore if developers need more resources cloud servers are easy scalable, due to the fact that many of the providers offer pay-as-you-go solutions.

Another advantage is, that the cloud can be set up anywhere with an internet access. Since it is possible to store everything in the cloud, you can practically access your systems from a bamboo hut in the jungle. Furthermore if you provide your employees with a cheap netbook, you actually don’t need to provide an expensive office. This also means that if you require a person with certain competences, but such a person isn’t available in your region, you can still collaborate on projects over vast distances. As we saw in LotusLive communication and collaboration isn’t a problem since these functions often are integrated in cloud interfaces.

Then what about finding clients? Well, since your business is already using the internet on a daily basis it is even easier for you to bring it online and by this making your services available to customers worldwide.

Basic issues.

To be productive in the cloud requires some sort of a computer device. One obvious example could be a chromebook, but they are still as expensive as an ordinary laptop. Netbooks are much cheaper and it’s easy to install a hybrid OS or use a webOS. Simmtronics have tried to make use of this and are now selling their 199$ netbook in emerging markets. This is of course positive since several organizations have stated that 200$ is the point where computers becomes widely available to the public in poor countries. It can still be done cheaper. Raspberry Pi, a UK-based nonprofit organization, are currently working on a computer of the size of a credit card. The expected price for their device is 25$. The cheapest monitor on Bestbuy.com is sold for 80$, and then you’ll need a keyboard and a mouse which is 20$. This way you’ll have a full set-up for 125$. Their system runs on Ubuntu, but another Linux distribution, TinyCore, could be configured to start up directly in the web browser.

In developing countries and also emerging markets power isn’t always stable. Since power is necessary for a computer to work, then this is definitely an obstacle. The solution to this problem could be solar power since many of the emerging markets are located in sunny locations.

Another problem is connectivity. In quite a few emerging markets the access to broadband connections is very limited. The reason why the advanced economies are so well connected is that they had a huge density of preexisting phone lines which were easy to convert in to broadband connections. But digging cables in to the ground is expensive. Wireless internet access is much more interesting for small and medium businesses in emerging markets. VSAT was one of the first solutions, but with low bandwidth and high pricing it isn’t a viable solution. Instead 3G and Wimax could be the solution for these countries, but of course wireless as well as wired connections requires investments.

Each year the World Economic Forum publishes a report on the global ICT (internet and communication technology) and measures the network readiness of each country. In this statistic education plays an important role. Education must be prioritized in emerging markets for them to evolve in to an advanced market. In relations to cloud computing the question is if they know about this great concept. Is information available to entrepreneurs in emerging markets?

Three ways to evolution.

The development in the countries which are emerging markets moves to a more urbanised society. Therefore cloud computing knowledge centers need to be established in the biggest cities in these countries. By doing this both providers, developers and users can benefit from the concept. IBM is a huge player in the cloud industry and seems to spend a lot of time on developing new markets. They could be a great provider of such a facility.

To reduce costs and improve connectivity, new businesses could start out in a shared office facility. That way the firms could share a wired broadband connection, which is often more stable and faster than a wireless connection. There are obvious advantages for governments supporting such a facility. If you make it easier to start up new companies, then even if only a small percentage of these grow bigger over the years, these companies create jobs, income, export and in the end an increase of the annual GDP.

Of course we can’t just invest in the main cities. If a country’s leading communication providers don’t continuously work to expand the country’s communication infrastructure, the government has to step in. It must not act as a service provider itself though. It would be far better to present the providers with a reward as for example an exemption of taxes on new network areas within a limited period of time.

Read more at Cloudblogonline .

Network and education are the biggest barriers for cloud computing, but if providers work together with the governments, they can provide a perfect environment for businesses and benefit from it as well. By doing this, cloud computing can be a game changer in emerging markets .


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March 1, 2012 by admin

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Columbia Business School’s sixth annual Healthcare Conference, held on November 6, 2009, explored the manifestation of a “New Healthcare Paradigm: Technology, Value and Emergence.” The topic of emerging markets was prominent as panelists and attendees sought to answer difficult and important questions such as: “What are the challenges/opportunities for global healthcare companies investing in BRIC countries and other emerging markets?”; “What is the record of success of public-private partnerships in addressing global health issues?”; and “What are the mindset requirements for global healthcare players to successfully participate in emerging markets?” A panel of esteemed players in the field spoke on these issues and shared a robust framework of six strategies for success in emerging healthcare markets.

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The “Emerging Markets Panel: Opportunities and Challenges for Global Healthcare Companies in BRIC and other regions” opened with a personal anecdote from moderator Ms. Rachel Zhang, a McKinsey & Co. principal who focuses on the healthcare industry. “When I left China 14 years ago to study in the United States, I thought I was leaving the past behind. I remember reading an article that said that China was easily 100 years behind the United States. Ten years later, I organized a China R&D conference in Shanghai. I received questions from attendees asking if they needed to pack enough bottled water for the entire trip, or if they’d be picked up from the airport in a rickshaw. Today, I don’t think this emerging market needs any introduction. And that just hits home for me how much things in China have changed,” Zhang said.

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