Emerging markets have provided an abundant labour supply forthe dot-coms of the West, but some are now starting to develop their ownhigh-tech hubs. Professor Lisbeth Claus reports Not surprisingly, these emerging market new economy hubs arefound in areas with an abundant supply of high-quality local knowledge workers.What these areas lack compared to Silicon Valley – a national contextsupporting entrepreneurship, work flexibility, management savvy, venturecapital investors and tax incentives – they make up for with the quantity,quality and cost of their labour force. However, there needs to be a certain infrastructure forInternet start-ups to develop into high-tech hubs. First and foremost, theemerging market must have the necessary brainpower for technologicaldevelopment. For example, India provides an abundance of programmers who supplySilicon Valley and other Western hubs with an outsourced labour supply. One of the biggest challenges facing high-tech industries indeveloping markets is the risk of failure. As we know from cultural expertssuch as Geert Hofstede and Fons Trompenaars, risk taking, uncertainty avoidanceand innovation are very culturally laden terms. In Israel, young people exposed to a military environmenthave built strong friendship networks in the army. Israel’s need forself-reliance in developing its own military technology has also created atechnological research environment. Immigration, especially from Russianscientists and engineers, has provided Israel with an abundant supply ofbrainpower. In addition, the pioneering attitude of an immigrant nation and theclose association between the government and the military in buffering the riskto market provides ingredients vital to successful entrepreneurship. Comments are closed. Previous Article Next Article China is often cited as an example of a huge potentialmarket for the Internet, but the country still has a restrictive politicalclimate where government controls over Website content and licensing inhibitthe free development of ideas. Government controls can also take the form oftax systems that reduce the profit potential of start-ups. The recent exodus ofthe corporate headquarters of Israeli high-tech firms to the US is a primeexample of the restrictive role government can play in preventing firms fromprospering in their home country. Singapore, with its stable political climateand tax incentives, has also attracted a number of new dot-coms. Dot-coms, whether they survive or not, have created a neweconomy culture that will have a lasting impact on a new generation ofknowledge workers. Some dot-com employees are now moving to more traditionalwork environments and will be taking with them a very different set of work stylesand risk expectations. Although less than 3.5% of the world’s population iscurrently connected to the Internet, its time and space reach is producing aworldwide subculture of knowledge workers connected through technology acrossborders and cultures. The dot-com work culture is so pervasive it will inevitablyinfiltrate the different national and work cultures of companies operating inboth developed and emerging markets. While emerging markets may have a comparative labouradvantage due to their brainpower and competitive costs, a number of factorsput them at a disadvantage compared to their Western counterparts. Dot-comsmust have access to capital from venture capitalists. For emerging markets thisoften means considerable foreign direct investment. There is also a need forexperienced management talent to bring the product to market and manage thestart-up’s business development. Emerging markets often lack senior managerswho are readily available and willing to take the employment risks associatedwith start-ups. Finally, Internet start-ups need a communicationinfrastructure, a potential market for customers, a stable political climateand limited government controls. Market failure for a dot-com start-up is not recognised andviewed in the same way in different cultures and subcultures around the world.A cultural trait of Silicon Valley is that (start-up) failure in itself isoften viewed as an opportunity – as if it were a badge of honour. The Latin andAsian cultures, on the other hand, put a huge emphasis on loss of face. Othercultures, especially Western European, are more security-driven and often lacksuch an incubator culture and entrepreneurial risk-taking ability. Spreading the knowledgeOn 1 May 2001 in Personnel Today Another advantage of emerging markets is the relatively lowwage structure. In Latin America, for example, telephone customer servicerepresentatives are available with minimal training and minimal waiting timefor on-line customers. In India, a pool of programmers is readily available atlocal market labour rates. Silicon Valley, the birthplace of the dot-com phenomenon, isno longer the exclusive domain of the new economy. High-tech firms are to befound not only in concentrated hubs in the US and Europe, but also in selectedemerging markets, the most flourishing of which are Israel, India, Singaporeand China. Related posts:No related photos.