The New Enterprise: How Emerging Markets Can Go Global

Emerging Markets Setting an Innovation Agenda, Have Access to Global Economy

As president and chief executive of IBM, Samuel Palmisano oversaw a dynamic and diverse global business for nearly a decade. IBM introduced numerous new initiatives, experienced growth in multiple markets and saw record financial performance during Palmisano’s tenure. After retiring from IBM, Palmisano established the Center for Global Enterprise (CGE) in 2013 to help educate societal stakeholders as well as leaders from the private sector, public sector and academia on the new and what is now a complex globally integrated economy and its promise for a better future.
In the fall of 2015, the Center published Growing Global: Lessons for the New Enterprisewith contributions from some the most prominent names in global business. Offering real world management lessons for today’s business leaders to apply while leading their respective enterprises, Growing Global is a modern and thoughtful roadmap for navigating an evolving business landscape, succeeding in scalability and going global.

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Samuel J. Palmisano, Chairman of the Center For Global Enterprise

Palmisano spoke to Emerging Market Views about the innovation agenda as it applies to emerging markets and how scaling up towards enterprise varies by economy. Read on for more.

Interview

Emerging Market Views: What is currently driving growth in the emerging markets?

Sam Palmisano: As the emerging markets move up the economic value chain and begin to set an innovation agenda, growth has slowed. However, the growth they’ve garnered has been a result of access to the global economy combined with investments and internal reforms. The slow down is traceable to commodities price declines, slow growth in advanced countries as a group, China’s slowdown, volatility in capital markets and specifically capital outflows. Too much debt in some cases is also an issue, and self-inflicted problems, for example, Brazil.

EMV: How can emerging markets innovate and grow their economies?

SP: This largely depends on the economy in question. Early stage, developing countries typically innovate by adapting technology from middle or high income countries. Middle and high income countries can and do innovate by investing heavily in people and upstream research, allowing competition and removing obstacles to creating, financing and building businesses. Generally innovation should increase as incomes and wealth rises, but there is a wide variation across countries and this rarely is a smooth transition. Financing is important, but many economies have bank dominated financial sectors that don’t optimize financing innovation. Over regulation is also a common problem.

In China, there is a concern that their economy is hyper-managed. Boosting investment via financing new growth comes at a cost of an alarming increase in its debt burden.

EMV: How can new enterprise and innovative management help emerging markets on the global stage?

SP: Largely enabled by digital technology, enterprises are becoming global at much smaller sizes than in the past. This means that these enterprises can help emerging markets grow their external markets much faster and more efficiently. At a more general level, innovation is mainly a private sector activity, though it relies on complementary public sector investments and policies. Innovative enterprises of all sizes can help build new models and a culture of innovation.

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