The Global Human Capital Journal

"Emerging" Market Companies Rapidly Becoming Global Players—New Owners for Jaguar and Land Rover

Emerging countries have long been regarded by globalizers as targets for exploitation, but 21st century market forces are turning legacy thinking on its head, which produces disruption and its sibling, opportunity.

The conventional thinking goes that emerging countries like Brazil, Russia, India and China (BRIC) have talented knowledge/human capital resources that can be tapped in outsourcing and offshoring arrangements. Moreover, these workers' employment in high value knowledge jobs creates a new consumer class among large populations. Emerging countries' rapidly growing consumer markets stand in sharp contrast to developed countries', which are flat or shrinking. China and India have been relaxing restrictions on foreign ownership, which has increased FDI, especially in China, enabling foreign companies to invest in and buy BRIC companies.

However, the big story in 2007 was the opposite:

The automobile is a personal manifestation of the ultimate promise of the Industrial Economy—that physical power is essentially free—because it enables people to move quickly and easily. People just love cars because it is immensely satisfying to glide effortlessly (traffic notwithstanding ,^) from one place to another with a high degree of individual freedom.

However, as 2007 draws to a close, autos' current reliance on fossil fuels makes it increasingly obvious that we need to change the rules. First, new wealth in emerging markets is dramatically increasing auto ownership and its concomitant demand for oil. Increased demand and uncertain supply will undoubtedly prove unsustainable in the medium term. Second, and even more daunting, is the carbon/climate change problem, which is far more life-changing in the long term. Petroleum and coal are the largest contributors to man-made carbon emissions.

Since every challenge also means opportunity, entrepreneurs are busy with an increasing sense of urgency, trying to solve the problem. Here are two examples that I found particularly interesting:

Edison as Mashup Artist: Combining Discipline, Process and Intuition

Innovate Like Edison is a must-read for anyone who wants to thrive in the "flat world." Had it been written in the 20th century, the book would have been applicable to R&D leaders, and it would have been a nice-to-have for business and government leaders. Innovation was the place kicker on the team during the Industrial Economy because companies created value through efficiency (refining continuous processes), and innovation is about discontinuous processes.

In the 21st century Knowledge Economy, however, innovation is the linebacker. Customers merely expect world-class efficiency, but it rarely differentiates. Innovation is now a core competency at most levels of every organization.

The problem is, the authors explain, is that very few people are innovation literate, and they don't know how to practice it practically. As I've written extensively, business innovation failures are over 95%, and most new products fail at high rates. We must reposition innovation as a linebacker, and that means understanding it differently and treating it differently. It's a group effort, no longer a specialist activity. Therefore, this book is one of the key guidebooks of government and business leaders, and it's also a fascinating read. Here's why:

Noodles represent a new kind of writing for the Global Human Capital Journal. Noodles are bits of thought that are unstructured and relatively brief. Most won't even be split into "extended" articles. They are partially inspired by twittering.

Yesterday I heard David Weinberger (one of the Cluetrain authors; his new book is Everything is Miscellaneous) talk at Big Frontier, and the big insight I took away doesn't sound like much but, peel the onion, and it's quite profound. Knowledge is inherently social. We vet our thoughts by sharing them with other people. Interaction helps us to refine thoughts and coalesce them into knowledge by knocking off the rough edges, and we co-design knowledge by collaborating.

One of the megatrends enabled by social networks and Web 2.0 is that "people like us" can connect and develop knowledge much more quickly than ever before. This is serving to rebalance the entire concept of "knowledge authority." Take the "university." The first European university was the University of Bologna, which was founded in 1088. It pioneered the concept in the West. The name, "university," refers to the fact that thinkers from many (virtually all available) disciplines gather to study and interact. Seen from the "knowledge is social" context, a big part of students' and professors' competitive advantage, and inherent in their authority, is this "universe" of thinkers in which they can all be social with knowledge. It's a high octane environment for creating and refining knowledge. Ditto for vaunted high tech areas like Silicon Valley.