Counterfeiting is a common form of corruption and cost businesses well over US $1 trillion in 2008. One of the most highly scrutinized areas of counterfeiting in today’s business world is the theft of intellectual property. Intellectual property is the ownership of ideas, as well as the control over the tangible or virtual representation of those ideas. The piracy of this intellectual property has become a major form of illegal business.
The last few years have not been kind to Latin America, economically speaking. And that is an understatement. The region has experienced two consecutive years of negative growth (-0.1% and -0.5%). 2017 will bring a slight improvement only.
Recognizably, the main culprits in the projected contraction are Argentina, Brazil, Ecuador and Venezuela–accounting for 50% of the region’s GDP. As for foreign direct investment (FDI), inflows reached $171.84 billion in 2015, down almost 12 percent from the $195 billion in 2014. This contrasts with a 36% increase in FDI around the world. Add to the mix a continuing depression in commodity prices (slowdown in China), corruption scandals, high interest rates, and urban crime and violence, and the forecast is gloomy overall.
However, among the storm clouds that will continue to hover over the economies of the region, there are indeed a number of pockets of sunshine—the brightest being the rapid proliferation of start-ups, both tech- and non-tech based, and the pace of innovation throughout the Hemisphere. Last year, start-ups in Latin American ballooned to 1,333 and accelerators to 62, with investment approaching $32 million. Chile leads the way, with 3 times the investment of Brazil. In terms of numbers of start-ups, Chile had 442, Mexico, and Brazil 297.
While start-ups pop up serendipitously, it takes the formation of an “ecosystem” to fuel the growth, interaction, and dynamism necessary to foster and expand innovation. Ecosystems of innovation, as referred to here, are communities of interacting parties–business, government, academe and non-profit organizations. They can be national and subnational (Chile, Uruguay, Costa Rica) or can be found in clusters (aerospace in Querétero, Mexico; IT in Campinas, Brazil; sugar cane, Valle de Cauca, Colombia). As Ricardo Ernst and I point out in our new book Innovation in Emerging Markets, an ecosystem’s drivers are innovation are national policies, facilitating institutions (such as Colombia’s Colciencias), and firm-level innovation. We find also that facilitating institutions, themselves, can have far greater impact than government or individual firms. Examples include Techstars, 500 Startups, Endeavor, Wayra, and NXTP Labs.
Just what are the key ingredients that comprise a successful ecosystem of innovation? Any research-based assessment and extensive conversations with entrepreneurs, other business professionals, and government officials would most likely agree that the list encompasses:
- Large pool of skilled talent
- Installed and diffuse technological base (e.g., broadband networks)
- Dedicated infrastructure of research universities, labs and entrepreneurship instruction
- Ample funding (angel investment, venture capital, convertible debt, microfinance, crowdfunding)
- Networks and collaboration among financiers, entrepreneurs, scientists, technologists, and designers
- An environment that nurtures, supports and sustains creativity
- Mechanisms for the fast transfer of knowledge
- Strong intellectual property laws and surety of enforcement
- Pro-market economic, tax and regulatory policies
- Well-functioning administrative, legal and judicial systems
- Federal, state and local industrial policies—especially those targeted at “clusters”
Although Latin American ranks low on the 2015 Global Innovation Index–Chile is #1 in Latin American but #42 overall–it is the second most entrepreneurial region in the world, according to the World Bank. Its Internet and mobile density is higher than the world average.
Although covered only minimally in the North American and European media, every nation in Latin America–and the Caribbeaan–is home to start-up activities. To illustrate, Dev.F (Mexico) brings software development techniques to that nation; Platzi (Colombia) provides an online learning platform for IT and programming courses; HubUnitec (Honduras), Impact Hub (Guatemala), and Atom House (Colombia) provide co-working and meeting spaces for young techies; and initiatives like Laboratoria (Peru), Epic Queen, and WomenWhoCode assist female start-up entrepreneurs to achieve success.
As for financing start-ups, here, too a myriad of resources such as Venture Club (Panama), Kaszek Ventures, Guadalajara Angel Investors, and Ideame, a crowdsourcing financing platform.
Successful ecosystems of innovation result from the synergy created by universities, R&D centers, talented human capital, investors (venture capitalists and angel investors), professional associations, and the private sector and government working to achieve sustainable competitiveness.
While 2017 will usher in another lackluster year for the region in terms of economic performance, with only a few countries achieving notable success, the rapidly emerging ecosystem of innovation will continue unabated and provide limitless opportunities for both technology- and non-technology entrepreneurs across the region.
Jerry Haar is a business professor at Florida International University and a global fellow of the Woodrow Wilson International Center for Scholars in Washington, D.C. He also holds non-resident appointments at Georgetown and Harvard. His latest book is Innovation in Emerging Markets.
Twitter is a free microblogging social network that enables users to post short messages viewed by other subscribers. “Tweets” of 140 characters or less are sent and received from computers and other mobile devices. Facebook is the most popular social networking service. Facebook gets most of its revenue from advertising, and firms use the site to promote their products and services. In 2011, Facebook launched a new portal for marketers and creative agencies to help them develop brand promotions. Hi5.com is giving Facebook a run for its money. The social networking site has become the world’s third most trafficked, thanks to a focus on Spanish-speaking countries.
Social media have evolved through Web 2.0, a term that describes a new wave of Internet innovation that enables users to publish and exchange content. More consumers are using social media to obtain information that influences their buying decisions. By creating brand presence in social media, marketers boost people’s tendency to imbue products r activities with “personality” or other characteristics they can identify with.
Social media are making a particularly big impact in charitable fundraising, a field that benefits enormously from international marketing. For example, the British charity Oxfam expanded its social media to better engage audiences online. Oxfam recruited a digital specialist to lead the expansion. Video content is preferred because of its emotional impact, moving people to donate at levels that reading a blog or Twitter message cannot. Oxfam is ramping up its Facebook sites and launching a web TV channel. To date, it has 716,000 followers on Twitter, its Facebook site has 253,000 likes and it has over 6,000 subscribers on YouTube.
Charities used social media to conduct fundraising for the Haiti earthquake in 2010. Twitter, Facebook, and other sites made it easier for charities to communicate. The Red Cross uses such media to augment traditional fundraising methods, such as direct mail, email, and telephone. Social media are less effective for contacting older donors, so it makes sense to use a variety of communications methods. Orphan charity SOS Children’s Villages prefers social media because of its cost effectiveness over more traditional methods. The charity posts videos on YouTube and makes ample use of Facebook, Hi5, and Twitter. For many charitable organizations, social media are the most effective approach for maximizing returns for the amount of time and money spent on fundraising.
Though email and websites are still considered the most important communication tool for non-profits, a recent study reports that social media is growing 3x faster than email. Additionally, Hubspot’s survey of small to medium non-profits in the US cite the top following social networks used by non-profits:
- Facebook (98%)
- Twitter (~70%)
- LinkedIn (~55%)
- YouTube (~45%)
Social media has given us new opportunities to engage donors and raise funds. Charities and non-profits should take advantage of this.
This is an excerpt from the book by: Michael R. Czinkota, Ilkka A. Ronkainen. International Marketing 10th Ed (USA: Cengage, 2013), pg 563.
Vietnam is currently one of Southeast Asia’s fastest growing economies. But that has not always been the case. When it unified in 1975, it struggled to find its feet. But when elements of market forces and enterprise were introduced and the stock exchange was opened, the country began to find its feet. Since then, foreign investment has grown. The United States is now one of Vietnam’s main trading partners.
More recently, the popularity of the Internet has brought about many changes. Vietnam’s Internet penetration is one of the highest in Southeast Asia at 44% of the country’s 90 million population. Much of the growth is attributed to smartphones, which are used by more than a third of the population. With very affordable mobile data rates at just $3 a gigabyte, Vietnam has now joined the Internet bandwagon. The impact is huge. Active social media accounts rose 41% this year. Vietnam’s active Facebook users are now at 30 million, an increase of 8.5 million since 2012. It is the most popular site being used by 21% of the population according to a survey conducted by We Are Social. Google+ has 13% and Twitter 8%.
There had been initial attempts to limit Internet freedom by the government. A few years ago, Vietnam’s government launched its own social media site to compete with Facebook. Dubbed Go.vn, it required users to use their real names and register with their government-issued numbers. Not many “friended” the government. Vietnam also used to block Facebook but Prime Minister Nguyen Tan Dung has decided to hit the “like” button saying that it can help small businesses to find new customers. Since then, several cabinet members have created their own pages and state-run broadcasters have begun uploading videos on Youtube. Despite a growing list of regulations, the government’s more open attitude towards the Internet has been quite effective. Online sales by business to consumers in Vietnam totaled an estimated $2.2 billion in 2013. They are estimated to reach $4 billion in 2015.
E-commerce and online trade have especially benefitted from the government’s efforts to promote Internet usage. Shopping websites such as Lazada and Sendo are mushrooming. Thegioididong, a leading IT retailer posted sales of $47.6 million in the first half of 2014. That was a growth of 300 percent. A recent survey by the Ministry of Industry and Trade’s E-commerce and Information Technology Department found that 58 percent of the Internet population shop online and spend an average of $145.
With the Internet boom and a growing middle class, there are a lot of business opportunities especially for foreign companies. Big global players such as Alibaba and Amazon have begun to build their presence in the country. Internet companies that want to expand to Asia should definitely not overlook Vietnam.
18 years ago, I wrote fervently about the imperative of more data deletion in the Journal of International Business Studies: “The growing risk of information overload is likely to lead to the emergence of a new industry concentrated on the reduction of knowledge… Due to rising concerns in the information dissemination area, the role of privacy experts and mechanisms designed to withhold information will also be on the increase”
After six years of testing, Google finally announced the option of “undo send” in its Gmail service. However, rumors of deletion capability are vastly exaggerated. Instead of actually “deleting” the email after sending it, the new “undo send” function just provides a time delay ranging from 5 to 30 seconds before sending out the email. Once the send button has been clicked, nothing can be “undone” after that time delay . Even now, if you accidentally send sensitive bank information to a total stranger, you still have to get a court order before Google can unsend an email full of sensitive data that mistakenly arrived in the inbox of a wrong person.
We don’t have the slightest doubt that big data technology has played an irreplaceable role in letting economies boom. Google, for example, has collected data from Gmap in mobile phones to report accurate instant traffic information. IBM’s Watson Supercomputer collects all medical journals and clinical cases and makes them available to doctors.
After Hillary Clinton’s email scandal, many people prefer a delay to a delete function in order to maintain accurate records. But for privacy’s sake, deletion may be essential. It can take a long time for laws to catch up with modern crimes.
Too many data can also disable people’s decision making capacity. Dr. Ron Friedman, a social psychologist on the science of workplace excellence conducted research on how more information influences people’s decision making. We used to think that more information leads to smarter decisions. However, when data are missing, we tend to overestimate their value.
Increasingly, we can build our understanding based on data derived from applications. We will be able to compare the use of air-conditioning in Shanghai to that in Berlin. A Smart Factory can offer solutions and services to consumers in different and changing conditions. Key obstacles are the reality of messy information and the problem of getting rid of useless data.