Developing Knowledge-based Business in Emerging Economies

| December 2, 2015

Developing Knowledge-based Business in Emerging Economies
Individual essay
The purpose of this assignment is to assess your ability to apply the concepts discussed in this course to the analysis of a company. You are expected to demonstrate familiarity with the relevant theoretical and empirical literature covered in the course (using appropriate references).
Essay and Requirement
Mike Hobday’s models of East Asian and Southeast Asian development are models of how Emerging Market (EM) firms or subsidiaries learn from Advanced Country (AC) multinationals. This is based on the traditional pattern of innovation being in the domain of AC firms, with imitation being the specialty of EM firms. More and more divergences from this pattern are being found, however, as “reverse innovation” and “frugal innovation” become the subject of more and more attention. The task in this assignment is to choose an EM firm (or individual) that has a record of innovation and identify an AC firm that can benefit – or has benefited – from cooperation with the EM innovator. The essay can focus on one of two aspects of cooperation between the two firms:
1. If the AC firm already has a record of having learned from its EM partner and there is sufficient information available about this, you can describe the cooperation (focusing on what the AC firm learned and how) and analyze the broader implications for EM firms’ evolving and future role in innovation trends within the context of the industry in question, as well as discussing the opportunities for further cooperation in the future.
2. Alternatively, if cooperation has not yet occurred or adequate information about it is not available, opportunities for such cooperation and learning by the AC firm can be laid out and discussed in the light of the concepts, strategies, and trends covered in the course, accompanied by analysis of the broader implications for EM firms’ evolving and future role in innovation trends within the context of the industry in question.
Remarks
The EM innovator can be from any industry (even clothing or video games) and can even be an individual inventor, as in the case of the Estonian engineers who are responsible for the technology underlying Skype. There is no restriction with regard to where you find information about the company, or about the time period, or about ownership (the company can be foreign or domestic owned, private or state-owned). You have a lot of room for variety and creativity here. The only real restrictions are that the innovator be based in an emerging market. Similarly, there is no restriction on the type of AC firm or how it learns from, or cooperates with, the EM partner. The EM firm can even be a subsidiary of an AC firm (if the innovation originated in the subsidiary!). You could even treat the mother company as the AC partner in this case.
There is no need to discuss the benefits the EM firm would receive (if any) from this cooperation, though you can if you want to. You do, however, need to talk about what other EM firms might be able to learn from the example.

To provide you with some additional guidance, two examples of assignments turned in in previous years are being posted on LEARN (with the permission of the authors), together with the instructions regarding the assignment. Both of these reports received marks of 80 or better.
Note that while in these past assignments and your group assignment, EM firms have been dealt with as learners, they are dealt with in this assignment as teachers. Note also that in this assignment the AC firm will be at least as much the focus as the EM one.
There will be no need to inform me which firm(s) you choose to write about. Also, you should treat this assignment as a sort of take-home exam: unlike the group projects, there will be no consultations, and the only questions I will answer will be emailed ones requesting clarification of the assignment, if necessary.
In terms of presentation, remember to number all pages and sections, and Times New Roman is not the most eye-friendly font. It depends a bit on the font, but usually 1.5 spacing is optimal; single spacing is too dense, and double spacing tends to leave too little text on each page. Graphics should not be unnecessarily consigned to appendices; they are most effective placed near the text that refers to them, and hardly affect the word count.
About citing lecture slides in your references: People do this, but I don’t like it. It looks lazy. You should be able to find better sources than notes from a lecturer’s slides to back up your arguments. The exceptions would be the slides where I presented my own research, most of which is either not published on-line or not in English.
Remember that it is important to demonstrate your ability to use academic literature and the concepts in it.
Note on which countries are considered EMs?
So, which countries count as emerging markets? This is actually a very interesting question about which there is a lot of controversy. I remember there was once even a dissertation written by an IBEM student about this question.
One of the issues is when a market is not developed enough to be considered emerging, and is instead considered a frontier market. I looked at this list and was amazed to find that OECD countries like Estonia, Slovakia and Slovenia, not to mention countries like Saudi Arabia and the United Arab Emirates (among the richest countries in the world in per capita income terms), are considered frontier markets:
http://en.wikipedia.org/wiki/Frontier_markets
I consider this frankly ridiculous. These lists are evidently drawn up based on what investors consider to be the level of risk. However, in my not very humble opinion, if the “investment community” knew anything about risk, the financial crisis of 2008 would never have happened. So, for the purposes of this assignment, I would say there is no country too poor or underdeveloped to count. A country like Afghanistan or Somalia is certainly not an emerging market, but I don’t think you will find any individual or firm in those countries that has made an innovation that would make him/her/it an attractive partner. However, if you do, it will be a very interesting report and I will be happy to be proved wrong!
The more difficult question is what countries are considered to have graduated from “emerging” to “developed” status. Personally, I would tend to use a per capita income criterion for that, but this is still tricky (e.g., do you use nominal or purchasing power parity income?). As far as I’m concerned, the four tigers (S. Korea, Singapore, Hong Kong, Taiwan) are all developed countries, as are the oil states of Arabian Peninsula, and therefore those countries are not eligible for this assignment. For me the cut-off would be somewhere around $20,000 per capita; have a look at these lists: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita However, there may be some cases that are doubtful, and if you are in doubt about a particular country, you can ask me.

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