You may ask what freedom has to do with international marketing. Freedom is about options. If there is no alternative, there is no freedom. A true alternative provides the opportunity to make a decision, to exercise virtue. In the blaze of the klieg lights, it is easy to make the “right’’ decision. at is not an exercise in virtue, because real alternatives arr effectively removed. e true selection among alternatives takes place in the darkness of night when nobody is looking.
“God created the world, the rest was made in China,” sings Lourd de Veyra. The concern about the Asian factory has lingered for decades. Overlooked has been its gradual strategic transformation from imitator to integrator, or even innovator.
Will China overtake the U.S. and become the new No.1 economy of the world? This anxiety seems as misplaced as earlier forecasts such as Japan’s economy surpassing the U.S. by 2000.
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.