Enterprises are attracted by the promise of growth, but a lack of networks can severely hinder business development.
The hub of the global economy is increasingly moving south. In fact, by the year 2100, the part of the world we refer to as the West will be home to less than 10% of the world population. Economic growth in Africa and Asia has not only raised hopes for the better distribution of wealth to some of the poorest people in the world but also growing concerns about our planet’s ecological capacity. In the best case scenario, economic growth and social development will go hand in hand.
However, markets in many developing countries can still be characterized in terms of unmet needs and a lack of fundamental assets. And particularly in Africa, competition is still not fierce, which makes entering the market now more attractive. In many African countries, economic development has traditionally been tied to the cost of raw materials. However, this trend is starting to change.
Over the last couple of years, Finland too has seen a rise in the connections between growth and development impacts. The Finnish Ministry for Foreign Affairs has in tandem with the Finnish Funding Agency for Innovation (TEKES) established the Business with Impact programme, which is intended to fund innovative business ventures that promote sustainable development in developing countries.
Aalto’s guide combines funding opportunities with success factors
‘Even though many programmes have been instigated and there is enough drive in the early stages, Finnish companies have experienced relatively poor business success in developing markets, especially with regard to working with people with limited resources. It’s precisely for this reason that we wanted our guide to combine information on the support currently available, especially in relation to the funding available for developing markets, and the success factors we’ve identified,’ says Professor Minna Halme, who leads the research into low-income markets at Aalto University.
‘We can no longer sit and wait for markets in Africa to become more organised in line with our ideals. Indeed, it is arguably the West’s responsibility to learn new methods of operation in order to succeed in collaboration with the vast majority of the world’s population. Establishing partnerships with local companies hungry for success is a good path to follow,’ says the author of the guide, Sini Suomalainen from Aalto University.
How to Innovate in Developing Markets (guide, pdf).
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Aalto University School of Business has conducted research on low-income markets since 2006. The point of departure was the need to identify ways in which business ventures can increase well-being and ecological innovation in these areas. Forging links between innovation, business, and development aid organisations is central to the research activities.