Let’s Retire the Term ‘Emerging Markets,’ Shall We

The term â€Å"emerging markets† traditionally refers to countries or regions with inadequate economic welfare and structures. Its also a label that is applied to economies that have in fact already â€Å"emerged.† It has become misleading. Confused? Here’s an example. Until recently, The Economist viewed Singapore and Hong Kong as emerging economies. And the FTSE labels them as â€Å"advanced emerging markets.† But according to the World Bank, the purchasing-power-adjusted per capita GDPs of Singapore and Hong Kong in 2010 were USD $43,867 and USD $31,758, respectively. On this basis, Singapore exceeded Japan, Germany, France and the UK. And both economies ranked above Spain, Israel and Portugal. In contrast, numerous â€Å"advanced†, â€Å"emerged† and â€Å"developed† economies, such as Greece, Spain and Italy, are on the verge of economic contraction. They might even be described as â€Å"submerging† markets! Moreover, the stigma once attached to the concept of â€Å"emerging markets† is no longer valid. Emerging countries tend to be seen as possessing small equity markets with levels of liquidity and price fluctuations typical of inefficient capital markets. In reality, however, equity markets in some emerging countries are sufficiently sizeable, with liquidity and volatility levels that match those of their more â€Å"advanced† counterparts. At the same time, the level of corporate governance in various emerging markets is moving close to, if not surpassing, levels seen in developed markets.1 As the distinction between emerging and developed markets blurs, the applicability of these descriptions becomes increasingly limited. It is no wonder then that The Economist (2008) called for the term â€Å"emerging markets† to be rendered obsolete. The reality is that emerging markets are now the engines of the world economy, while developed economies are experiencing marginal growth, at best. Emerging countries have experienced above-average, if not substantial, GDP growth in recent years, although part of this has been the result of starting from a lower base. Clearly, a new term is needed to describe growing markets, hence Fast-Expanding Markets (FME). The fact that The Economist uses the term â€Å"emerging markets† while it simultaneously calls for a halt in the use of the term highlights the genuine need for new term to describe up-and-coming markets. Good thing we came along! But perhaps the greatest problem with the term is that as long as markets are maintained as the critical unit of analysis, at the country level, it is easy to miss growth markets in countries with lackluster overall economic performance. If we only conduct analyses at the macroeconomic level, many growing business opportunities that have yet to contribute substantially to a country’s GDP will go unnoticed. It is exactly the identification of markets that are â€Å"off the radar† that create businesses advantages for companies. For example, many researchers have viewed Japan as a languishing economy for the past two decades. Its traditional businesses are facing ever-mounting cutthroat competition from China and Korea, and it ranks low in competitiveness.2 From this perspective, it may be tempting to view Japan as a nation in continuous decline with few growth prospects, and to discount it as a potential source of new opportunities. However, this view reflects a focus on the country’s macroeconomic situations. If we look deep enough, pockets of exceptional growth can be observed. Whereas Japan’s consumer-electronic industry may appear to have passed its prime, its pop culture industry has been expanding in the global market. For instance, the popularity of Japanese comics, or manga, has been booming in the United States for the past decade, even though the genre is culturally distinct from mainstream American comics.3 The same is true of â€Å"cosplay,† a subculture originating from Japan in which people dress in costumes and take on the roles of various characters from animated series or computer games. In Japan alone the cosplay costume industry grew by 5% in 2009 to around USD $500M.4 Cosplay is becoming an important part of Japan’s pop culture exports. Indeed, a â€Å"World Cosplay Summit,† which was sponsored in part by Japan’s Trade Ministry and publicized by Japan’s Ministry of Foreign Affairs, has been held annually for nine years. This example illustrates that new opportunities exist at more granular levels, even in countries with stagnant or faltering economies. We can look for a new configuration of how markets emerge by focusing on the pockets of growth that develop in a much more spontaneous manner than that which weve been trained to anticipate. Pockets are spontaneous in nature, rebellious in behavior, and expanding at a rate that would impress in terms of traditional indicators and analysis. Pockets of growth are cells of FEM in that they are embryonic transporters of new business opportunities that are often untapped and undetected. Some may suggest that the term FEM is too broad to be useful. But we believe that it is exactly this characteristic that allows the term to encompass a vast variety of business opportunities and new sources of wealth, which can truly shape new seeds of prosperity. Only by broadening our horizons can we break away from the limitations imposed by such popular terms as â€Å"emerging†, â€Å"developing/developed† or even â€Å"frontier† markets. Some may argue that FEM are nothing more than conjectures, as forecasting naturally entails disappointments. This may be true – admittedly, not every FEM will deliver promising results. However, analyses of the FEM phenomena should help us prepare for the future. In a sense, these markets are similar to a compass.   While they may not provide enough information to pinpoint exactly what lies in the future, they can generate opportunities that honor real economy as the agency of development.   It’s a brave new world where our global economy is concerned and it begs for a new term to help us evolve with it. References: 1. Everest Capital (2009) â€Å"The End of Emerging Markets,† November, http://evcapan.com/documents/TheEndofEmergingMarkets.pdf, accessed on 7 November 2011. 2. According to the IMD World Competitiveness Yearbook (2011), Japan ranks twenty-sixth, putting it behind Qatar (8), Malaysia (16), China (19) and Korea (22), and just marginally above Thailand (27), the UAE (28), Chile (29) and India (32). 3. Matsui, Takashi (2009) â€Å"The Diffusion of Foreign Cultural Products: The Case Analysis of Japanese Comics (Manga) Market in the USâ€Å", Working Paper Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Hult Rotation offers you a chance to study in a truly global way. Our rotation program allows you to study and be immersed in some of the finest cities in the world. 📠¸: @jasminmanzano . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . Each year, Hult seeks to enroll a talented and ambitious incoming class from all over the world. We look for diverse students with a wide range of experiences, perspectives, and interests—students who will thrive in our unique educational atmosphere. Are you ready for a truly global experience? 📠¸: @iambrunadiniz . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . We’re excited to start 2020 on a ranking high! Hult is proud to have been placed #28 in Poets Quants 2020 rankings for Best Undergraduate Business Schools in the US. Taking a huge leap of 32 places from our 2019 position, we’re also very happy to have secured top positions in key categories like: life-changing experience, practicality of the degree, and global immersion. . With five global campuses, a student body of over 130 nationalities, and a learn-by-doing approach—Hult offers a student experience like no other. . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . â€Å"I’m from an engineering background and needed a whole new skill set for the industry I wanted to switch to. I learned a lot about myself and how I deal with being out of my comfort zone. I learned both soft and hard skills, from how to work in very diverse teams to key accounting metrics and strategy. I was surprised by how weak I was at certain tasks in English or how strong I actually was in other areas. Hult gave me opportunities to try new things and meet people from places I never thought I would have friends. . My internship experiences gave me the chance to broaden my view of different cultures and different companies. I had the opportunity to work and live with people whose values differed from people in my home country. I thought that this would be difficult, but it gave me the chance to reflect on my own values and assess if they were a result of my home country environment or if they were intrinsically mine. . Diederick ter Kulve (@diederick.terkulve) Netherlands Masters in International Business . Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021 Say a big hello to our Bachelor of Business Administration program cover star, Elisa Orus Plana âÅ" ¨ . â€Å"I’m excited for the future—especially that I cant predict whats going to happen. Maybe Ill end up in Mexico working for a trading company or maybe in Africa, developing my own business. Everything is possible, and the options are constantly changing. I love the idea that Im never going to be stuck doing the same job until the end of my life if I dont want it to be like this. . Hult really supports me and my ambitions and truly believes that we deserve to be considered as professionals as well as students. Here, I get to express not just my opinions but all elements of myself. From my creative side with the Fashion Society to my finance and business sides in Trading Club and the Management Consulting Club. We get a different type of learning here. Not just essential knowledge and theory, but practical skills and mindset. The school is always evolving. We’re encouraged to innovate and to always look for new ways of doing traditional things. We learn how to be more confident and become aware of how we can impact our environment. The school aims to help you become a better version of yourself and to stand out from the crowd.â€Å" . Elisa Orus Plana French Bachelor of Business Administration Class of 2021"> During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. During the final days of 2019, you probably reflected on what you’ve accomplished this year—and even this decade—and what you’d like to achieve in 2020. Let us know in the comments below. â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"The first time we did group work on the program, I went head-to-head with a colleague. It taught me a lot about how I see people, how people see me, and how conflict can be resolved in a kind and productive way. The best feedback you get, when delivered constructively, is the most critical because it really feeds into how you lead. I’ve completely reversed my leadership style—the result is so much richer and more powerful when you lead from behind and lead with strength. . Studying in tandem with working, whilst challenging, gave me the perfect platform to directly apply learning concepts into my business environment, the competitive landscape, and the real-estate industry as a whole. When I started the program, I was very happy in my corporate role. But my courage and aspirations grew to the point that I took on a whole new direction. Having my career coach, Joanna, as a sounding board allowed me to really be strategic and get to know myself. She coached me thro ugh all the interviews, the research, and the questions. It went in parallel with what I was doing academically and after six months everything just clicked. . I went into the EMBA knowing I had nothing to lose and I’ve come out with everything. Great strength, global friends, amazing learning, mentors from professors, a job I love, and the knowledge that I can set my mind to achieve anything and with the right support and resources I’ll get there.† . Kashani Wijetunga British, New Zealand Sri Lankan Associate Director Senior Strategy Consultant CBRE EMBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . â€Å"It was now or never. I knew that I’d have likely stayed in my neighborhood for years to come if I didn’t take this opportunity. I’d not lived or studied outside of the U.S. before. So I left my job as a global strategist at an advertising agency and moved halfway around the world. I’ve come back a more culturally aware, well-versed person. I’ve realized that everything is a learning experience and an opportunity for growth. Ill definitely carry this mindset with me into the future. Technology and social media allow us to be different people in several places at once. Im excited to see how I can establish myself in whatever city Ill be lucky enough to call home and still maintain deep connections with people all over the world. I’m inspired by my classmates every day. Hearing some of their life stories and how getting this degree fits into their greater mission has been very humbling. My biggest challenge has been finding the ‘right’ path for me. There have been rooms Ive felt like I shouldnt be in, but now Im proud to feel as though I truly belong, wherever I am.† . Dwayne Logan, Jnr. American MBA Class of 2019 . Happy New Year, Hultians! . Happy New Year, Hultians! .