The fture of innovation lies in emerging markets and in the so-called bottom of the socio-economic pyramid. Emerging markets such as Brazil, Russia, China and India increasingly account for a large part of global economic activity; by some estimates these markets will dominate the world economy by 2030. The so-called bottom of the socio economic pyramid—roughly speaking, those who live on less than $2 a day—accounts for a little over half the global population today: that is about 3.3 billion people in all. A majority of these people live in emerging markets.
So far, technological progress and the consumer revolution have largely passed these people by. Even domestic firms in emerging markets have ignored this large segment in their home countries, preferring to focus on the urban rich and the growing middle-class. But this trend will soon change. There is an increasing realisation that these masses of people are not a lost economic cause, but a huge source of opportunity for the future. Embracing them and bringing them within the ambit of the contemporary market system offers huge opportunities for firms, governments and the people themselves.
However, reaching these people and bringing them within the ambit of the global system will not be simple. In fact, it will require considerable innovation, and this innovation will often though not always require the use of new technology. What this innovation will certainly require, however, is designing new products and services around the special needs and lifestyles of the poor. Most importantly, such innovation will have to find ways to radically reduce costs. Consequently, the big challenge for firms will more often than not involve rethinking existing business models entirely; specifically, it will require radically overhauling the existing cost structures around which businesses operate.
This will not be easy. It will require the investment of significant amounts of time, money and labour. But this innovation will pay off handsomely. Not only will it bring the fruits of progress to a large part of the world that is currently denied this, but it will also potentially offer new products and services, at knock-down prices, for consumers in the rich world. If this form of innovation is truly successful, we might, for the first time in human history have one world, united by one set of economic values and benefits. The old ideal of justice for all, at least in an economic sense, may finally be within reach. The future of innovation promises to be exciting indeed. We cannot afford to have it fail.