Reverse Innovation: Emerging markets to Developed markets

I was reading an article on the Economic Times on products that could go into the global market after the success in local markets.Until recently, innovation was thing of the west but it looks like that cycle may have just begun to change. Another thing I noticed was that these products belong to companies that already have a global presence and can afford to test the waters with confidence. Given that the global market is highly complex and competitive,it is not surprising that global players will be the one's to take the lead in this reverse innovation process.On the whole, this move will probably open the gates a to a whole lot of others products that vie for the global market.

The article draws attention to the fact that it is not just one sector but the list is a medley of products that will be launched globally.While the recession may be a bad thing for most people it may be a good market for low cost high value products developed for the emerging markets.

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source: http://economictimes.indiatimes.com/quickiearticleshow/7026202.cms

India - Globalization’s Poster Child

Many people in the world perceive India as the land of maharaja’s and elephant while others associate it with hunger and the derision’s of a developing country.Contrary to conventional wisdom, India has taken the center stage in the process of globalization. In the last ten years,the pace of globalization has accelerated at an unprecedented speed in this super charged sub continent. The Indian economy opened up in the early 90’s as a result of foreign trade deficit’s due to the gulf war and with pressure form the IMF , World Bank and other international organizations. This liberalization of the Indian economy led to the explosion of the global consumer goods and the television market. A wide range of Indian companies, from steel to cars, IT to Bollywood are setting themselves up as powerhouses of tomorrow’s global economy. It may be note worthy to mention that globalization is not new to India. During the period 1500- 1800 , India experienced it’s first phase of globalization attracting the Portugese, the Dutch and finally the English trading companies.From India’s vantage, the forces of globalization the second time around continue to intensify and accelerate.In this weeks blog for the sake of focus, I would like to predominantly elaborate on media globalization in India.

Television

Until 1991, Indian television and film constituted one of the world’s most protected media markets but deregulation transformed the media landscape. Fueled by the desires of advertisers to reach the newly open Indian market, the number of television channels grew from one state-run channel in 1991 to more than 70 cable channels in 1999. Access to television increased from less than 10% of the urban population in 1990 to nearly 75% by 1999 (Derne, 2005). Using the growth of the satellite television audience to their advantage, a number of Indian satellite based television services were launched between 1991 and 1994. With its huge numbers of potential consumers, India provides transnational media corporations with unrivalled opportunities — it is one of the fastest growing and potentially one of the biggest English language media  markets in the world.

The proliferation of satellite channels and foreign programming has put a great pressure on the Indian television programming industry. In the early 1990s, Indian television channels had their highest audience ratings within the region and forced foreign channels to adjust their programs so as to fit into the Indian national and local culture (Sonwalkar, 2001). The most successful channels were the one’s with most localized content.Patrick Cross, the managing director of the BBC World Service, said that his corporation had plans to introduce programs in Hindi (Mitra & Anjan, 2000, cited by Sonwalkar, 2001). This is the first time the BBC has shown interest in local language broadcasting outside the UK, although England has had an intimate and protracted relationship with the Indian subcontinent (Wang, 2008 ).

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India: Makings of Little Cultural/Media Imperialism? - P Sonwalkar - International Communication Gazette, 2001

Privatizing the airwaves: The impact of globalization on broadcasting in India - DK Thussu - Media Culture and Society, 1999 .

The Good Side of Globalization and Mass Media – KIVA

Companies have been operating without borders for a quite a while trying to hire the best talent or seeking the best idea’s, all in the best interest of making profit. Having only profit as their God, the multinational conglomerates, the most visible facet of globalization are destroying the rights and the livelihoods of peoples in the two-thirds world (Rajput, 2003). Women, especially those in developing countries seem to experience the adverse effects of globalization.

Women and Globalization

“Micro credit is a critical anti-poverty tool-a wise investment in human capital, when the poorest,

especially women, receive credit, they become economic actors with power. Power to improve not onlytheir own lives, but in a widening circle of impact, the lives of their families, their communities and their nations···”      Kofi Annan, Secretary General, United Nations.

The adverse impact of globalization upon women’s livelihood, employment, education, health, etc has been highlighted by numerous national and international reports. Lack of access to credit is a key barrier to economic development and growth in the informal sector in which women constitute an overwhelming majority. This has led to an increasing emphasis upon micro credit and microfinance for women as means for their empowerment (Rajput, 2003). In laymen’s term micro financing is the extension of credit or loan to people who do not have access to the traditional financial system.

It has been known that empowering one women can empower successive generations. This is where KIVA comes in. KIVA is a nonprofit organization that empowers individuals to lend to an entrepreneur across the globe. The organization has partnered with microfinance organizations and 82 % of the loans have been made to women. KIVA has combined microfinance with Internet and created a global community of people connected through lending. The organization takes great efforts to present the realities of microfinance by giving lenders the opportunity to learn about the borrower’s background and their personal story for seeking the loan.

How KIVA works

I stumbled upon KIVA around the same time last year and chose to help a member called Hannah, who lived in Ghana. Hannah, a 40 year old single mother of three children works very hard to be able to provide for her family. She lives with her school going children in a rented apartment in a fishing-dominated community called Axim in the western region of Ghana. Hannah trades in provisions and sells on a tabletop in front of her house. She has been in business for three years and sought a loan to procure goods in bulk. She sought a loan for $1,050 with the repayment term of 8 months. She works with a local field office in Ghana and with their help is able to provide information that is displayed on the KIVA website for potential lenders to see. In Hannah’s case, 38 lenders from countries like Japan, US, UK, Netherlands, Australia, Canada etc saw her profile and chose to help her by funding her $1,050 loan. In my opinion KIVA is a social enterprise that touts a simple business model, which just might make the world a true global village, in terms of connectivity and philanthropy.  

 

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Sources:

www.kiva.org

Rajput, P (2003). Women and Globalization: Is Microcredit the Answer?

www.socialedge.org

West Meets East

I briefly touched upon Cultural Imperialism, quite often known as ‘McDonaldisation’ and ‘Disneyfication’ in my last week’s post. Cultural Imperialism Theory states that Western nations dominate the media around the world which in return has a powerful effect on Third World Cultures by imposing on them Western views and therefore destroying their native cultures (Schiller, 1973). This summer I was in India after two years visiting my family and was taken aback by all the changes since my last visit. India has been on a roll in terms of absorbing western culture and products. I often tell my friends that the culture shock I experienced during my recent trip to India is worse than the culture shock I experienced eleven years ago when I came to the US. Mass media seems to play an active role in the ramifications of Cultural Imperialism.

Although as an exception to countries that are rapidly adapting modernity, China is one country that has opened its doors to westernization yet has chosen to resist the western media distribution. The media in China remains to be state controlled, thus minimizing the cultural impact of the west. There are more than sixty Internet regulations have been made by the People's Republic of China (PRC) government, and censorship systems are vigorously implemented by provincial branches of state-owned ISPs, business companies, and organizations (MacKinnon et al, 2006). The escalation of the government's effort to neutralize critical online opinion comes after a series of large anti-Japanese, anti-pollution, anti-corruption protests, and ethnic riots, many of which were organized or publicized using instant messaging services, chat rooms, and text messages (Wikipedia).

Shaadi.com (a likely example)

Dating or courtship may have been blasphemous in traditional Indian families some twenty years ago.The effects of modernization along with the added affordance of the internet and technology has changed the landscape of this age old traditional Indian culture. Shaadi.com is a modern twist on the age old tradition of arranged marriages in India. Shaadi.com, the world's largest matrimonial service, was launched in 1997 and has gone on to become one of the largest Internet companies in India. In the process, the company created an entirely new industry - online matchmaking. Today it has millions of members and records over 200 million page views per month (shaadi.com). Shaadi.com is similar to Match.com an online dating service in the US that was launched in 1995.

So why did things change? With the rise in the level of education and exposure to mass media the modern cosmopolitan male and female seek more in their partners than just family approval. The emergence of financially independent, career-oriented men and women, who are confident of taking their own decisions and crave to have a sense of individual achievement, has greatly contributed to the disintegration of this traditional culture. So, arranged marriages may eventually be a thing of the past to the next generation of Indian children.


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Rochona Majumdar’s Marriage and Modernity is an interesting read of the evolution of modern marriage practices in Bengal and India that challenges our most basic assumptions about the “traditionalism” of arranged marriage/joint families and demonstrates the fundamental and continuing “modernity” of both these institutions.

Digital Natives or Net Geners

In today’s world we are surrounded by them, they are referred to as the ‘net generation or ‘digital natives’. These digital natives are people who have spent their entire lives surrounded by computers, cell phones, digital music players and other gadgets of the digital age. The term “digital native” was coined by the technologist Marc Prensky who has written a series of articles on the topic. Prensky described the generation of young people born since 1980 as “digital natives” due to what he perceived as an innate confidence in using new technologies such as the internet, videogames, mobile telephony and “all the other toys and tools of the digital age” (Prenksy, 2001, p. 1). The culture of these digital natives is highlighted by characteristics such as constant connectivity, constant availability, and dependents of communication technologies for accessing information and interacting with others. These digital natives may prefer to read their news online than on paper, will instant message or text rather than talk over than phone and more often than not socialize online more than offline.

Technology is considered as one of the important entry points in providing messages to the digital natives. In addition, this young generation is exposed to culturally diverse television programs, movies and music through new technologies such as satellite television and the internet. As a result, the globalization of media has given rise to a “youth culture”, an emerging culture based on the melding of a number of different cultures shared via global media. As Keen (2007, p. xiii-xiv) contends:

MySpace and Facebook are creating a youth culture of digital narcissism, open-source knowledge sharing sites like Wikipedia are undermining the authority of teachers in the classroom; the YouTube generation are more interested in self-expression than in learning about the insider world; the cacophony of anonymous blogs and user-generated content is deafening today’s youth to the voices of informed experts and professional journalists; kids are so busy self-broadcasting themselves on social networks that they no longer consume the creative work of professional musicians, novelists, or filmmakers.

These concerns have prompted some commentators to point to the digital acceleration of “a culture of disrespect” between young people and formal institutions (Bugeja, 2006).It is evident that we are at the cross roads of globalization and web 2.0. The digital natives are seen as that part of the society that is likely to engage in cultural borrowing that is disruptive to the traditional cultural practices. Researchers from Denmark, France, and Israel found that as a result of the media-induced processes of globalization, young people in those countries have a preference for transnational fiction and movie material (particularly American “soapies”) as well as a new sense of transnational social space provided by the Internet (as cited in Gidley, 2002). Many perceive these developments as amounting to a form of specifically American cultural imperialism – as reflected in claims about the ‘McDonaldisation’ or ‘Disneyfication’ of the world (Ritzer, 2004 and Barber, 1996). While these may be concerns of some scholars there are others who tend to think that though digital technologies are associated with significant changes in the lives of young people and adults there is little reason to assume that serious and irrevocable disconnections are somehow resulting between young people and society(Selwyn, 2009).

Media, Global Culture and Hollywood

The term globalization has become somewhat of a cliché as it serves to explain a wide range of issues across various parts of the globe. Many scholars believe that globalization is slowly transforming local cultures into a new universal culture that may be based on the values and practices of modernity. This new global culture is essentially Western in character and exhibits characteristics such as individualism, rationalism and other values that are dominant in Western nations. The cultural dimension of globalization is also an obvious result of the tremendous increase and dominance of American media and entertainment products. The global flow of cultural media products means that cultural distinctions have become less powerful than the free flow of information and the spread of commercial programming (Katz, 2000). Also, modern media systems facilitate the convergence of national cultures though entertainment conglomerates who utilize global communications networks and digital technologies to distribute their products world-wide (Barnet and Cavanagh, 2001: 8). A prime example of cultural globalization with an American agenda would be the power of Hollywood and its movies in the global market.

According to research, US exports close to $8 billion worth of entertainment products each year.MTV is noted as one of the most spectacular global entertainment programming of the 1990s for reaching nearly 210 million TV households in seventy-one countries. Hollywood is not far behind, in 1995, 50.9 percent of Hollywood's total income came from international markets (40.7% in 1986, 41.8% in 1995) (Vogel, 1998). In 1999, the top four grossing movies at the international box office were Titanic, Jurassic Park, Star Wars: Phantom Menace, and Independence Day.4 Each of them made more money abroad than domestically, with Titanic earning more than twice as much overseas. This increase in domination of Hollywood movies across cultural spaces is cited as one of the most important factors for transforming cultural industries in other countries.

As a result, many countries now create policies to maintain control over their cultural content and to create a fostering environment for their own entertainment producers. In this context, France and Canada have known to be aggressive in implementing these policies but ironically American entertainment still dominates their markets. Seventy-five percent of the television watched every night in Canada is of foreign origin; four out of five magazines sold in Canada are foreign; foreign films take up 96% of screen time at Canadian theaters, and 70% of the content on Canadian radio stations is non-Canadian. Most of this foreign material hails from the U.S. Thus the current situation for global entertainment is conceptually complex yet culturally vibrant. As nations open up more and more, the spread of information and ideas increase and local markets in various countries are being flooded with foreign goods and concepts. Many economists/sociologists predict that this will lead to a "dumbing" down of individual cultures, and produce a new, global culture.

Is it safe to say that with the global expansion of US media companies comes the global expansion of US culture?

Transnational Media

Communication technology has long been considered as one of the driving forces of globalization.As boundaries dissolve the traditional role of media is being transformed as well. As a result of this, media are increasingly transnational in character. Through communication technologies and global media, people from different parts of the world are exposed to foreign idea’s, concepts and issues. Transnational media can be defined as the communication, information or entertainment that crosses international borders without the regulatory constraints normally associated with electronic media (Gher and Bharthapudi, 2004). Previously media systems were primarily national, but in the past few years a global commercial market seems to have emerged. Policies of deregulation,liberalization and privatization have been key in transforming the media landscape in most parts of the world. In addition falling costs of personal computing and networked communication has lowered the barrier of access to the previously unreachable audience.Thus multi national media conglomerates are essentially the products of deregulation, corporatization and digitization of communication. Besides,this new opening has caused dominant firms in the media industry to move across the planet at breakneck speed.

In this context, some of the world’s largest multi-media firms with diversified media holdings are - Time Warner, Disney, News Corp.,Bertelsmann, NBC, CBS and Viacom - and the largest Internet companies with diversified media holdings are- Google,Microsoft, Yahoo and Apple(Arsenault and Castells , 2008). It is important to note that most of these media giants are rooted in the west and pursue local partners and affiliates to create, customize and deliver content to the local audience.Two important rules for these global media players besides the scope to compete is the global arena is  to a) grow big so that the competition does not buy them out and b)diversify in categories such as film production, book publishing, music ,TV channels and networks. Ben Bagidikan, the author the book “ The Media Monopoly” has pointed out the ever shrinking list of dominant firms : 50 media firms in 1983 ;29 in 1987 ;23 in 1990 ; 10 in 1997 ; six in 2000; and five in 2004.

In addition, the diffusion of the Internet and wireless has played a central role in decentralizing the communication network.We are witnessing the rise of a new form of communication: mass self-communication, that is the communication processes taking place in a global web of horizontal communication networks that include the multi modal exchange of interactive messages and documents from many-to-many in chosen time (Arsenault and Castells , 2008). Besides, the rise of the Internet, satellite and wireless communications have reduced the traditional firewalls to reaching the audience. Also, according to Jenkins (2006), the convergence of culture and the divergence of platforms create new opportunities for media corporations because content that succeeds on one platform can be repackaged across others (p.19). It is also important to note that despite of the proliferation of blogs and other information sites, the main stream media firms continue to dominate the online market as well. Although, the global media networks do realize that user generated content is a fundamental component of the new global network of communication and are respectful to the specific cultures of this new media.).