The Next Emerging Markets After BRIC

As indicated in the recent Business Perspectives on Emerging Markets 2012 to 2017 Report conducted by the Global Intelligence Alliance or GIA, the countries China, India, Russia and Brazil which make up the famous acronym BRIC, will keep their leading spots in the list of the world’s developing markets for 2012 to 2017.

In the top 30 ranking of emerging markets in which international companies will have plans of targeting from the year 2012 to 2017, most emerging markets, aside those of the BRIC, are found in Latin America or Asia with Argentina, Turkey, Mexico, Vietnam, South Africa and Indonesia getting the highest spots among secondary developing markets. (more…)

Counterfeiting and Malinvestment in China

A consumer spending of 2.29 trillion for this decade, China is on top of the list of prospected markets for retail and manufacturing. The purchasing power of the Chinese market brought high hopes among international brands but this hope is still being held in hiatus due to the massive counterfeiting in the red nation. What is the real score of fakery in the country? This article is here to draw some of the fine lines on the status of the notorious markets of China and the case of malinvestment in the Chinese Economy. (more…)

The Rise of the Cities

The idea of cities serving as the dynamos of the world’s economy for the past few decades has long been an established fact. However, their rapid growth of expansion has even become unparalleled nowadays. It is estimated that by the year 2025, developing cities can contribute as much as $30 trillion annually to the world’s economy through combining physical capital investments and consumptions. To appeal to the urban consumers and to get ready for the various challenges which may arise due to the rapid growth of the demands for essential natural resources like energy and water as well as for funds to venture in different establishments such as housing and office buildings, it is crucial to understand these emerging cities and their respective ever-changing demographics. (more…)

The Rise of the Cities

The idea of cities serving as the dynamos of the world’s economy for the past few decades has long been an established fact. However, their rapid growth of expansion has even become unparalleled nowadays. It is estimated that by the year 2025, developing cities can contribute as much as $30 trillion annually to the world’s economy through combining physical capital investments and consumptions.

To appeal to the urban consumers and to get ready for the various challenges which may arise due to the rapid growth of the demands for essential natural resources like energy and water as well as for funds to venture in different establishments such as housing and office buildings, it is crucial to understand these emerging cities and their respective ever-changing demographics. (more…)

IKEA Bolstering India’s Economic Confidence

The Swedish group IKEA, the world’s leading manufacturer and retailer of furniture asked for India’s government approval of their proposal to invest an estimated amount of €1.5 billion or $1.9 billion worth of business by establishing about 25 stores around the country in the next years.

IKEA’s business venture sparked a brand new hope for the policy makers of New Delhi who have been trying to win back the confidence of foreign investors in the country’s economy after some major flip flops.
The change in policy a year ago which permits foreign retailers to fully own their Indian businesses made IKEA’s investment plan possible. Through investing, IKEA will play a major role in the transformation of the country’s enormous shambolic sector on retail. (more…)

A Better Market: Chinese Consumers Bids Farewell to Fake Products

Once dubbed as the hub for product counterfeiting, China’s market is now turning away from fakery as consumers prefer original products. With the strong campaign against fake products, most of the consumers have now raised the likeness to the real branded ones. Try walking into metropolitan China with a fake Gucci bag and you will surely have people looking at you. Indeed, this transformation has brought high hopes to international manufacturers given the fact that China is seen as the largest market with a potential additional consumer spending of 2.29 trillion or 19% of the forecasted world additional spending of 12 trillion for this decade. (more…)

Internet-enabled Mobile Phones Boost Health in Kenya

Huge health benefits have been achieved through clinical trials in Kenya with the use of Mobile phones at a fraction of costs, according to recent article in MIT’s Technology Review on Kenya’s startup boom. According to the article, the main challenge lies in maintaining the low-cost benefits of these clinical trials, and transforming them into normal daily procedures for the long term.

Implementing and maintaining new mobile technology based projects in health care is a huge potential business opportunity. It will also sustain a healthier population in Kenya, which is currently experiencing a huge growth in the emerging middle class segment, along with other African countries.

World Bank Grant

Mobile phones are omnipresent in Kenya, and internet usage is for the most part done through mobile devices. Within the decade, internet access is predicted to be done primarily accessed through mobile phones, exceeding the use of laptops and computers. The World Bank recognizes that Kenya can become the internet hub of Africa, which is why it awarded a $55 million grant to enhance accountability through web-based applications which can transform the economy.

The money will finance Kenya developers to create simple solutions to daily health and education problems and seek new ways to enhance government accountability while raising the economy through online job creation.

A World Bank statement noted that after Ghana, Kenya has the second-fastest broadband on the continent. This led to a 90% reduction in overall internet capacity prices, and raised internet penetration was from three to 37 percent. Even today, mobile phones are widely used for health enhancement – and that does not yet include the use of the internet.

AIDS, HIV and mobile phones

Consider Zuhura Hussein, 38, cited in MIT’s Technology Review article. Hussein is a community health worker in Kibera, a 170,000 population slum area. It reeks of poor sanitation and is a breeding ground for HIV, tuberculosis and other infectious diseases. Ironically, Kibera lies just one block away from Nairobi’s most posh mega shopping center.

Hussein is a community health worker. She urges Kibera residents to get medical check-ups and vaccinations. Through her Nokia 6070 mobile phone, she can daily reach patients with HIV and tuberculosis to remind them that it is time for them to take their medication.

The idea of using mobile phones for better health service in Kenya started five years ago. Richard Lester, a Canadian infectious-disesase specialist, saw that mobile phones were plentiful in Kenya. He also saw that there was on average one doctor per 6,000 citizens.

Lester’s group collaborated with three health centers to link up with HIV positive patients. Every week, they texted patients to ask if they needed antiretroviral (ARV) drugs or medical assistance. The results of Lester’s trial (published in the MIT 2010 report) revealed a higher percentage of regular drug intake among those who received reminders versus those who did not. Also, 57% of those reminded experienced suppression of drug loads versus 48% in the control group.

Lester believes that if all 410,000 Kenyans on ARVs use this system, HIV can suppressed the viral load of some 36,000, incurring a $17.4 million savings in healthcare costs that would otherwise go to the need for more expensive drugs, because AIDS onset was not forestalled.

A second clinical trial, Academic Model for Providing Access to Healthcare (AMPATH) was a collaboration of Indiana University School of Medicine and Kenya’s Moi University. By using mobile phones AMPATH maintained the medical records of 130,000 HIV-positive patients. This allowed them to run automated reminders to patients through Android phones. Also, some 55 clinics now have quick and easy access to the patients’ records to determine the medicines and tests they need.

A third clinical trial, called OpenMRS. was operated by Paul Biondich, research scientist of Indiana’s Regenstrief Institute. Through text message reminders, the incidence of the passage of the HIV-positive infection from pregnant mothers to their babies fell below 3%, compared to 15% in other areas where the reminder system was not applied.

Beyond Aids A Long Way to Go

With appropriate apps, other trials showed successes in other areas. In a country with an average one doctor per 6,000 people, an app like MedAfrica made a huge difference. People now had links to doctors an dentists, and could access advice for first aid care. Currently some 43,000 phones have this app. If a doctor is inaccessible, they can always be linked to storefront clinics that can also dispense of medical advice by phone.

Even more distressing is the quick spread of infectious diseases not only of AIDS but tuberculosis and others. The government of Kenya needed to have a quick and efficient tracking system to be immediately informed of disease outbreaks so that they could respond immediately and in a way that responded to specific immediate needs.

A cost friendly and efficient solution was delivered by a 21-year-old senior IT student at Strathmore, Erick Njenga and three of his classmates. Upon the instructions of their professor, they developed a program by which thousands of health workers can report and track spreads of diseases in real time throubh mobile phones. The program developed by these students is pivotal to Kenya where the HIV rate is 10 times that of the US, and other leading killer diseases like malaria and tuberculosis can now be addressed and lives saved.

Even more amazing, Njenga and his classmates developed the program at a slice of what the government would have paid if it has pushed through with an initial plan to hire a multinational contractor from Netherlands, at a contract that totaled $1.9 million. The project did not proceed because it relied on only one type of phone. Under the far less expensive program developed by Njenga and his classmates, the same can be achieved with any type of mobile phone.

Just as well, because Njenga and his classmates achieved all of this in the spring of 2011 and only received internship pay of some $150 per month. Their app permits disease reports to come in from any mobile. It went into operation last summer, and is called the Integrated Disease Surveillance Response system. Currently, they are also working on an new app that will enable the health ministry to track pharmaceuticals distribution to government hospitals and clinics to prevent waste and shortages.

Room for Improvement

While the success of these clinical trials are impressive, there are downsides. First, the sheer size of the problems of Kenya and second, the lack of financial commitment to successful clinical trials which inhibit their continuance and propagation.

Sub-Saharan Africa has the highest incidence of HIV, and the greatest need. But programs such as those mentioned above end as soon as funding dries up. Only a fraction of those in need benefit from the trials. There is still so much more to do, in the short term and long term. Lester, who started the use of mobile phones for improved health service in Kenya, ran out of funds in 2009.

The challenge is continuance, and this has to be accomplished by people who are committed to this because they themselves are the beneficiaries of it. With the World Bank grant, it is hoped that the finances will be geared towards a long term maintenance direction.

The Startup Culture is strong in Kenya. A number of homegrown technology cultures have come up, such as iHub, which in December 2007 enabled Kenyans to give first hand reports of ethnic violence, including the presidential election violence that ensued that year. iHub is also used in other countries — South Africa, Russia, Haiti and the USA where it was used to map flood problems in the Missouri River.

Kenya’s first mass-market Android, Safari.com, went on sale in 2010 with up to 600,000 phones of various types on their network. They expect to corner 80 percent of the market within two years. Another example is Shimba Technologies, led by University of Nairobi graduates Steven Kyalo and Kezia Mumo. They created MedAfrica, the software that lists government doctors and dentists, and first-aid menus and diagnostic information.

Local entrepreneurship is strong in Kenya. The World Bank grant can focus on these, have multiple achievements in health and economy at a fraction of the cost in the long term, if carefully handled.

Russia Will Join the European Union, Predicts Goldman Sachs

In his forecast for the next 10-40 years, Jim O’Neill of Goldman Sachs defies the critics of Russia’s continued membership of the Bric team and it’s future economic growth: Russia doesn’t need dramatic growth rates. It just needs to avoid crises.

Russia is often singled out as the Bric country that doesn’t belong in the Brics. Critics say that with its aging population, dependence on oil and gas and widespread corruption, it’s not in the same league as its dynamic rivals – Brazil, India and China

Jim O’Neill, the Brics’ inventor, disagrees. In The Growth Map, a book marking the 10th anniversary of his coining of the acronym, he rejects suggestions that Russia should be dropped from the team. He argues, in his characteristically forthright way, that in terms of GDP her head, Russia has the potential to beat not just the other Brics but “all other European countries” – and join the European Union.

Democracy in China by 2017

Few countries with per head incomes of more than $10,000 a year survives as autocratic/authoritarian/totalitarian nations except for oil exporters. Charles Robertson of Renaissance Capital boldly predicts China could be a democracy by 2017:

China, on about $7,500 and growing fast, is approaching the income level when democratic change often begins. There are powerful arguments about why both countries might be permanent exceptions to the democracy rule.

Jim Was Right about Bric

Ten years ago Jim O’Neill of Goldman Sachs predicted the four growth economies – Brazil, China, India and Russia together would lead the World’s economic development. And he was right:

A quick look at the MSCI indices for the four Brics since 2001 shows that they have comfortably outperformed the S&P 500. If you invested $100 at the time of O’Neill’s report in November 2001 in each of the four Brics, you would now have $674 from Brazil, $451 from China, $459 from India and $414 from Russia. Your 100 S&P bucks? Worth $112.