The conclusion that emerging markets can achieve an accelerated economic growth, through the help of new technology transfer and the resulting innovations, is nothing new to many research studies. In fact, these emerging economies from middle-income countries are slowly taking over the old technology hailed in developed countries and creating their own, globally recognized innovations, thanks to their access of today’s newest technologies.
One perfect example is how Kenya, dubbed as “the cradle of Africa’s technological innovation”, has successfully launched a large-scale mobile money transfer system. The concept was meant to answer to the demand of the Kenyan citizens who do not have a bank account.
The system allows a large number of the country’s population to remit funds to their friends and family. Even if it was just a small venture by a domestic mobile network operator, it rapidly grew in popularity, recording a 25% contribution to Kenya’s GDP. Its success story inspired other countries in Africa, Asia, and even Europe to adopt the same system.
There are other similar instances in which developing markets caught the attention of their developed counterparts. India’s Grameen Danone came up with a cost-effective system that allowed the production of yogurt even at small-scale plants. The system eliminated the need for freezer storage and transportation costs – and developing countries big in the yogurt industry were quick to accept the same process.
What contributed to the success of these innovations, even coming from humble beginnings can be summarized in one word: leapfrogging.
In definition, it is the concept that countries that have poor technological economic and development can easily move forward by adopting new technologies and developing modern innovations without the need to go through intermediary steps. In other words, their economies are like blank canvases that can easily be turned into a revolutionary masterpiece.