Emerging markets gain strengthened ICT position following recession reshuffle

Tuesday, June 7, 2011

A paradigm shift brought by recession has seen emerging countries like Brazil or Mexico driving use of resources and investments in ICT, according to a recent study by quantitative analysis firm Oxford Economics.

By 2020, the top seven emerging (E7) countries - Brazil, Russia, India, China, Mexico, Indonesia and Turkey - will hold a bigger share of world GDP than the G7 countries - Canada, France, Germany, Italy, Japan, UK and the US.

This was one of the conclusions drawn from Oxford Economics' latest paper, "The New Digital Economy: How it will transform business," sponsored by AT&T, Cisco, Citi, PwC and SAP. The study included a worldwide survey of 363 companies and interviews with more than 35 executives.

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It delineates several shifts that will reshape the global playing field and bring digital economy to US$20.4tn by 2013, roughly 13.8% of worldwide sales.

An example is the impact of maturing technology in digital economy, since about 57% of executives expect mobility to have the greatest positive impact on their business, followed by business intelligence (37%), cloud computing (36%), and social media (31%). Specifically, 83% of companies in Latin America say they have a business intelligence strategy in place, compared to 50% of respondents in Europe, the Middle East and Africa (EMEA) and 60% in North America.

In total, 43% of respondents in Latin America say their executives are committed to social media as a business strategy, compared to 22% in EMEA. Telepresence services are expected to have the greatest impact on firms in Brazil, according to 53% of executives from that country.

This change will be most easily perceived in the technology and telecommunications industries - cited by 72% and 66% of executives - which they say will help them improve customer care (60%), reduce time to complete tasks (60%) and increase productivity (58%).

Emerging markets already account for about 73% of the world's mobile use, with increasing populations and income levels representing large opportunities. As such, Oxford Economics believes twice as many companies in the developing world will increase their investment by 20% or more in mobile devices, social media, business intelligence, collaborative technologies and telepresence.

Private and public spending will increase twice as fast in the BRIC (Brazil, Russia, India and China) economies than in the top four advanced economies (US, Japan, Germany and France).

"The global downturn accelerated two major trends - the transfer of economic clout to the emerging world and the rapid adoption of new technologies to drive productivity and innovation," said Lou Celi, one the report's authors and executive director of Thought Leadership at Oxford Economics.