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The New Ways to Win in Emerging Markets
How to develop the right capabilities to lead global growth . by David Wijeratne , Gagan Oberoi , and Shashank Tripathi
Plans for the Delhi-Mumbai Industrial Corridor are nothing if not ambitious . Eight new industrial “ smart ” cities will link New Delhi , India ’ s sprawling capital , with Mumbai , its premier business and financial center nearly 1,500 kilometers ( about 900 miles ) to the south — and that ’ s just in Phase One of four scheduled development stages . The mammoth endeavor , which the sponsoring state governments hope to complete in 2040 at a projected cost of US $ 100 billion , promises stateof-the-art technology , transportation , and infrastructure , all designed with environmental sustainability in mind . The largest of the satellite cities , Dholera , is expected to house 2 million inhabitants and employ 800,000 people by the time it ’ s completed . All this makes the Industrial Corridor one of the most far-reaching urban projects in world history , and the most expensive ever within one country , though it is by no means the only mega-development that an emerging economy is undertaking .
The Chinese government expects to spend even more — the current estimate is $ 1.2 trillion — on its Belt and Road initiative , a plan to build a vast land and sea infrastructure network that will foster commercial , financial , and cultural ties across 65 countries . Malaysia ’ s Northern Corridor Economic Region , launched in 2007 , is an initiative aimed at creating a worldclass economic region in Malaysia ’ s four northwest states by 2025 . It has already attracted more than $ 12 billion in private investments .
For anyone thinking about economic growth prospects over the next 10 years , projects like these are well worth studying . It ’ s true that parts of the grandiose plans might very well fall flat as a result of such impediments as capital shortages , legal issues involving land acquisition , or planning delays . Nevertheless , their sheer scope indicates the path that most leaders of emerging economies believe they have to take to catch up with their industrialized counterparts . As the U . S ., the U . K ., and Germany did 150 years ago , and Japan and South Korea did after World War II , today ’ s emerging markets laid the foundation for growth by developing a manufacturing sector — which itself led to the growth of cities , transportation technology , social institutions , and the service sector . But the world is so competitive and complex today that these economies need to be far more proactive in managing the next wave of growth , bringing broad areas along simultaneously and making tangible improvements in quality of life . To accomplish these goals , emerging economies need investment and planning across three broad domains that are , in effect , the prerequisites for economic growth . A country ( or an area within a country ) can ’ t move forward until there is enough progress in each of the three domains :
• Human development : This domain includes the conditions that are essential to improving the standard of living of individuals , including the natural environment needed for human survival ( the state of agriculture , the water supply , and sanitation ) and the services necessary for human development ( education and healthcare ). As highlighted by the United Nations Development Programme , “ development … is about expanding the richness of human life , rather than simply the richness of the economy in which human beings live .” At the same time , advances in a country ’ s standard of living help drive consumer spending and business opportunities .
• Institutional development : This domain includes the public and private sectors that are essential to the generation of economic value : the industrial base needed to produce goods and services , including those for export ( energy and manufacturing ) and the commercial value chain needed for a consumer economy ( distribution and retail ).
• Growth platforms : This domain includes the support base that makes it possible for other sectors to flourish , such as the physical infrastructure
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