The Idea in Brief
- Today’s great crisis has slowed down the developing countries, but they continue to grow. Not only will they become bigger economies by the time the recession ends, but their markets will be significantly reshaped by new government policies.
- Competition in the developing world has become more intense as companies there focus on domestic markets rather than exports. Emerging giants are using the slowdown as an opportunity to squeeze out costs, invest in innovation, and go after rural and low-income consumers. Consequently, they’re likely to become more formidable rivals.
- Western companies must continue to invest in emerging markets, develop local executives who are risk takers, team up with emerging giants, launch sustainable products, and tap the potential of Africa if they wish to retain their historical edge.
In 1893, American historian Frederick Jackson Turner declared that a frontier isn’t just a place; it’s also the process of adaptation and change that shifting borders force on people and institutions. The young Wisconsin professor was describing the role that the frontier had played for three centuries in creating the American nation, but the Turner thesis applies to modern business, too. Over the past three decades, the borders of the corporate world have constantly shifted as developing countries opened their economies to foreign businesses. As a consequence, multinational companies have had to cope with runaway growth, intense competition, greater complexity—and constant change.
A version of this article appeared in the July–August 2009 issue of Harvard Business Review.