innovative solutions [electronic resource] what designers need to know for today's emerging markets

INNOVATIVE SOLUTIONS What Designers Need to Know for Today’s Emerging Markets... INNOVATIVE SOLUTIONS What Designers Need to Know for Today’s Emerging MarketsEDITED BYAPALA LAHIRI CHAVAN

INNOVATIVE SOLUTIONS What Designers Need to Know for Today’s Emerging Markets

INNOVATIVE SOLUTIONS What Designers Need to Know for Today’s Emerging Markets

EDITED BYAPALA LAHIRI CHAVAN

GIRISH V PRABHU

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Library of Congress Cataloging‑in‑Publication Data

Innovative solutions : what designers need to know for today’s emerging markets /

editors, Apala Lahiri Chavan and Girish V Prabhu.

p cm.

“A CRC title.”

Includes bibliographical references and index.

ISBN 978-1-4398-1049-1 (alk paper)

1 New products 2 User-centered system design 3 Cross-cultural studies I

Chavan, Apala Lahiri II Prabhu, Girish V

Preface vii

Editors xiii

Authors xv

1 An Introduction to Emerging Markets 1

Warren Greving 2 Key Themes of Working in Emerging Markets 15

Apala Lahiri Chavan 3 Aspects of Innovation: Research and Technology 49

Beena Prabhu and Sarit Arora 4 Usage Ecosystems: Dynamics of Emerging Markets 61

Girish V Prabhu 5 Understanding Users in Emerging Markets: What’s Different? 79

Apala Lahiri Chavan 6 Case Studies 91

7 Interviews 197

Index 229

Building.up.years.of.experience.as.user.experience.specialists.has.prepared.us.only.for.the.tip.of.the.iceberg.when.we.enter.the.challenges.of.innova-tion.and.design.in.emerging.markets There.is.so.much.to.learn,.so.much.to.experiment.with,.so.much.to.rethink.whether.what.we.know.already.could.be.useful.in.designing.for.the.emerging.markets Although.many.of.us.have.done.projects.for.different.cultures,.they.were.mostly.relevant.to.the.world

we already lived in, the so-called “developed world” However, with the.emerging markets, there is still a lot to uncover in regard to methods we.use.to.gather.user.input,.the.processes.that.lead.us.to.creating.innovative products.and.services.and.tools.we.use.for.usability.evaluation We.see.this

as a journey, rather than a collection of experiences, that could lead us to.great.designs It.is.a.journey.that.will.be.enriched.with.the.new.perspectives,.ideas,.innovations,.and.tools.that.will.help.us.to.dig.into.deeper.ends.of.the.iceberg This.book.is.our.attempt.to.show.our.road.to.the.“riches”.of.new.ways.of.uncovering.opportunities.in.innovation.and.design.for.emerging.markets.Just.like.the.companies.who.have.established.market.shares.in.the.devel-oped.countries.face.a.new.challenge,.we.as.designers.share.the.excitement.and.the.pain.while.entering.the.emerging.markets We.already.know.that.the.usual.ways.of.designing.and.introducing.a.product.or.a.service.may.not.work.anymore.in.the.newly.opened.markets Not.only.do.the.cultural.differ-ences.play.a.major.role.in.what,.how,.and.why.customers.behave.the.way.they.do, but the existing technologies, distribution channels, wants and needs

of people become new elements to consider In this book, Human Factors.International.(HFI).in.India.describes.the.landscape.of.what designers.are.facing today in emerging markets, and discusses the unique methodolo-gies.they.developed.to.aid.designers.to.overcome.the.difficulties.faced.when.innovating.and.designing.in.emerging.markets

This.book.incorporates.research.and.practice.to.provide.a.comprehensive.look at the elements of what is needed to be knowledgeable and creative.when innovating and designing for emerging markets Human Factors.International.in.India.and.a.selected.group.of.professionals.who.have.done.pioneering.work.in.the.emerging.markets.make.this.a.unique.book.due.to.its.contributors:.local.designers.and.researchers.providing.insights.directly.from.the.depths.of.India,.China.and.other.parts.of.the.world We.provide.an.in-depth.look.at.user.research.methods.in.emerging.markets.and.under-served.communities We.show.how.ecosystems.mapping.could.be.a.great.tool.to.define.the.elements.impacting.innovation.and.design.decisions We.discuss.methodologies.to.develop.solution.spaces.based.on.the.output.from.user.research.studies We.provide.case.studies.from.around.the.world.to.bring.perspective.on.how.the.landscape.of.innovation.and.design.differs.from.the

viii Preface

design.in.the.“developed.world” These.case.studies.and.design.examples provide us insights on how to avoid pitfalls in innovating and designing.outside.of.our.comfort.zone.that.we.were.living.in.the.past.decades We.bring.the.voice.of.the.researchers.and.designers.providing.insights.directly.from.the.depths.of.innovation.and.design.for.emerging.markets

ties.in.the.emerging.markets,.whether.it.is.BRIC,.MBRIC.or.the.BISA.group.of.emerging.countries Through.his.experience.in.setting.up.research.labs.in.three.of.the.four.BRIC.countries.(India,.China.and.Russia),.Warren.Greving.highlights the key economic and research trends in emerging markets Drawing.upon.the.historical.backgrounds.of.these.nations.and.cultures,.he.highlights.the.ways.to.be.“surprised”.and.asks.the.designers.to.keep.their.eyes.open.to.identify.the.contexts.of.emerging.markets.as.not.one.unified.entity With.examples.from.India,.he.goes.further.to.emphasize.how.each.of.these.emerging.markets.are.not.homogeneous.in.any.way

In.the.introductory.chapter.we.talk.about.the.similarities.and.dissimilari-In the second chapter, Key Themes of Working in Emerging Markets,.Apala.Lahiri.Chavan.analyses.the.four.key.themes.of.working.in.emerg-

ing markets These themes are culture, people, technology and transition

Innovators and designers need to have enough data points, even before.embarking on any emerging market work, to understand how similar or.different.the.specific.emerging.market.is.from.the.country.they.belong.to.and.are.familiar.with In.addition,.the.fact.that.the.emerging.markets.are.not.necessarily.similar.cultural.entities The.people.who.comprise.emerg-ing.markets.are.also.different.because.of.their.unique.demographic,.social.and.cultural.context Technology.is.one.of.the.main.“game.changers”.for.the.emerging markets The extremely positive attitude about technology has.often.resulted.in.the.emerging.markets.being.able.to.leapfrog.in.the.area

of technology adoption and usage This can often be an unexpected prise.and.hence.less.than.optimally.leveraged.by.designers.coming.from.the.developed/mature.economies And.finally,.the.fast.pace.of.change.in.the.emerging markets and the resultant transitionary nature of society poses.unique.challenges.and.opportunities

sur-The third chapter, Aspects of Innovation: Research and Technology,.emphasizes.the.role.for.user.research.in.understanding.needs.and.wants

tural.practices,.but.at.the.same.time.a.clear.shift.in.practices.and.beliefs.is.also.seen Consumers.are.aspiring.for.better.products,.and.they.want.these.today!.However,.the.models.and.the.trends.for.technology.adoption.in.the.emerging.markets.are.not.the.same.as.in.the.developed.markets This.dif-ference.can.be.attributed.to.sociocultural.differences,.ecosystem.differences.and the changes in macroeconomics that have influenced the emerging markets.significantly With.carefully.selected.examples.from.Brazil,.China.and.India,.Beena.Prabhu.and.Sarit.Arora.have.created.a.case.for.why.a.deeper.understanding.of.user.needs.in.emerging.markets.could.lead.to.appropriate.products.and.services Gaining.a.deep.understanding.of.users.will.enable

At some.level,.the.consumers.in.these.markets.are.rooted.in.their.socio.cul-designers.and.innovators.to.come.up.with.products.and.ideas.that.will.be.successful and will have a positive impact on the lives of the users It is crucial.that.user.research.be.designed.in.such.a.way.that.it.not.only uncovers.insights.about.the.users.but.also.about.the.ecosystem.that.the.user.lives.in.and.is.influenced.by Every.market.is.different,.and.the.emerging.markets.are.more.so.because.of.the.changes.that.have.transpired.in.the.past.10.years.and.have.influenced.their.consumers Looking.at.these.markets.through.the.right.lenses,.and.using.the.appropriate.methods.to.understand.the.fabric.of.each.market.will.help.multinationals.in.their.quest.to.penetrate.them.and.be.successful.in.delivering.“killer”.products.and.services.

Usage.Ecosystems:.Dynamics.of.Emerging.Markets,.the.fourth.chapter.,.covers the importance of understanding the ecosystem and its needs Building.on.existing.research.on.business.ecosystems,.Girish.Prabhu.makes

a case for needs analysis of the entire ecosystem We call the resulting

.analysis.and.understanding.the.usage ecosystem.as.this.provides.designers.

a.deeper.understanding.about.the.interdependence.of.various.stakeholders.from.a.usage.perspective With.two.live.examples,.one.in.the.K-12.education.system.and.another.in.high.frequency.(mom-and-pop).retail,.we.bring.to.the.forefront.the.key.advantages.of.this.approach.towards.developing.appropri-ate solutions We strongly feel that understanding of interdependence of.stakeholders.in.an.emerging.markets.ecosystem.becomes.more.crucial,.as.they.tend.to.be.less.homogenous.in.nature.compared.to.developed markets The.relationship.between.these.entities.is.also.very.much.more.flexible.and.fluid Culturally,.many.of.the.emerging.market.countries.value relationships.over.rules Hence.entities.often.behave.in.different.ways.and.assume.differ-ent.characteristics.in.an.ecosystem.where.they.need.to.“be”.as.the.relation-ship.dictates.in.a.specific.situation Secondly,.the.state.of.infrastructure.and.technology.in.the.emerging.markets.is.leapfrogging.so.rapidly.that.the.very.profile.of.the.entities.undergoes.rapid.transformation This.in.turn.drives.the.need.for.utmost.flexibility.in.relationships.between.entities.in.the.eco-system Designers need to be aware of the specifics of emerging market.ecosystems.in.order.to.spot.opportunities.for.design.that.would.not.exist.in.developed.market.ecosystems In.the.K-12.education ecosystem,.interde-pendence.of.students,.parents.and.teachers.from.a.holistic.education.per-spective.led.to.identification.of.needs.that.are.supportive.of.each.other.as.well.as.conflicting These.insights.allowed.the.innovators.to.identify.a.solu-tion.that.provides.an.optimal.level.of.success.to.the.key.end.user.without

risking the other stakeholder’s values In the high frequency retail solution,.

understanding.of.ecosystem.stakeholders’.needs.allowed.the.innovators.to.identify.a.solution.that.could.possibly.create.a.return.on.investment.(RoI).for.the.HFR storeowners In.a.nutshell,.by.picking.out.the.stakeholders.that.have.the.greatest.interdependencies.and.the.most.profound.effects.on.the.key stakeholders,.the.innovation.team.can.develop.out-of-the.box.solutions.In.the.next.chapter,.Understanding.Users.in.Emerging.Markets—What’s.Different?, Apala covers methods that the designers could use to make

x Preface

users.in.these.countries.express.their.unarticulated.needs,.often.in.front

of strange foreigners! Many methods developed in the West for data.gathering.from.the.user.(in-depth.interviews,.focus.groups,.think-aloud.protocols, etc.) do not always work well in non-Western cultures Stark.differences.in.communication.styles.between.these.cultures.mandate.that.these methods need to be adapted It is extremely important to under-stand.the.root.cause.of.hesitancy.in.communication And.these.roots.and.enablers can be different as we move between countries or even across.a.river.within.a.country.(as.is.often.the.case.in.many.emerging.market.countries) With.a.deep.understanding.of.and.sensitivity.to.the.triggers.that.enable.communication.within.a.culture,.HFI.has.developed.multiple.methods.ranging.from.the.Bollywood.method.for.usability.testing.to.the.Funky Facilitator method for data gathering to Jungian archetype folk.probes for interview enhancements to the Bizarre-Bazaar method for.comparison.of.alternative.concepts It.is.imperative.to.develop.methods.that.help.us.address.not.just.the.different.communication.pain.points.in.different.cultures.but.also.the.issue.of.there.being.different.content.in.the.unconscious,.in.different.cultures One.method.to.retrieve.content.from.the.unconscious.may.not,.therefore,.work.universally.well.in.all.cultures If.we.want.to.succeed.in.expanding.our.reach.to.new.markets,.then.we.can.no.longer.ignore.the.billion.users.in.emerging.markets.who.are.today.in.search.of.methods.that.will.help.them.articulate.their.needs.and.make.their.voices.heard This.chapter.explains.each.of.these.methods.that.HFI.has.developed

ple.case.studies.and.interviews The.case.studies.in.this.section.are.not.only.drawn.from.our.own.work.with.various.clients,.but.also.from.user.experience.and.innovation.researchers.across.the.globe We.have.case.studies from.our.own.work.with.HP.Labs,.Nokia.and.Haier,.and.from.Philips,.Intel,.A.Piece.of.Pie,.University.of.Malaysia.and.Bangladesh’s.Development.Research.Network Many.experienced.innovators.from.these.organizations.such.as.Joan.Vinyets.Rejón, Alvaro Diaz, Dr Alvin Yeo, Shekhar Borgaonkar, Ashwini Asokan,.Susan.Huotari,.Forhad.Uddin,.Mosharrof.Hossain,.Simona.Rocchi,.Unmesh.Kulkarni,.Sarit.Arora,.Rahul.Ajmera,.Mathivanan.Rajendran,.Mrinal.Kanti.Rai.and.Beena.Prabhu.have.contributed.to.the.case.studies

This.book.then.turns.a.corner.and.provides.real.life.examples.through.multi-vation and development areas such as Roopa Purushothaman, one of.the.authors.of.the.now.legendary.Goldman.Sachs.report.Dreaming.With.BRICs:.The.Path.to.2050,.and.Tapan.Parikh,.who.talks.about.his.work.in.the.developmental.sector Ram.Sehgal.in.India.describes.the.changes.in.the.field.of.advertising.in.India,.and.Steve.Portigal.speaks.about.the.role

The.interview.section.covers.conversations.with.key.dignitaries.in.inno-of designers in emerging markets in comparison to developed markets Dmitry.Volkov.from.Russia.and.Darelle.van.Gruenen.from.South.Africa.provide a fascinating perspective of the users and ecosystem in each of.these.emerging.nations

We hope that after having read the chapters in the preceding sections,.your journey through these case studies and interviews will provide you.deeper.insights.on.how.a.user-centred.innovation.and.design.approach.has.been.applied.in.practical.settings.

As.with.any.journey.we.designers.take,.we.know.how.to.be.flexible.and.creative This.flexibility.and.creativity.is.at.the.heart.of.this.book We.hope.that.we.have.been.able.to.provide.an.appreciation.and.understanding.of.the.complexity of innovation and design for emerging markets and also how.that.complexity.can.be.transformed.into.a.manageable,.understandable.and.actionable.world.of.opportunities

And,.finally,.we.wish.to.thank.all.those.who.have.contributed.to.making.this.book.possible Primary.among.them.is.Dr Nuray.Aykin,.whose.brain-child.this.book.is.and.without.whose.initiative,.this.book.would.not.have.seen.the.light.of.day We.thank.all.our.authors.and.interviewees.for.their.insightful.contributions We.appreciate.the.contribution.of.Praneet.Reddy.for.the.very.useful.and.timely.secondary.research.data.and.valuable.insights.on.China.from.Dr Jianming.Dong,.Xueming.Lang.and.Dr Suzanne.Thomas

Apala Lahiri Chavan.is.a.world-renowned.expert.

on cross-cultural design and contextual tion—the discipline of creating breakthrough.product.concepts.and.adapting.existing.products,.services and technologies to new markets HP.Labs, Adidas, Nokia, Sony Ericsson, NCR, and.Intel.are.just.a.few.of.the.companies.that.have.ben-efited from Apala’s innovative, pioneering tech-niques in this exciting and growing field Apala.and.her.CI.team.have.helped.designers,.marketers,.product managers and ethnographers apply her.innovative techniques to develop exciting new.concepts and products She systematically guides the ideation process to.uncover.subtle.patterns.in.ethnographic.and.market.data.to.reveal.exciting.breakthrough.ideas.that.can.drive.a.business.and.generate.more.revenue.and.profit Apala.has.developed.a.vast.array.of.data-gathering.techniques.that.help.understand.the.user.experience.in.a.variety.of.cultural.and.economic.environments She is a creative and dynamic speaker who has received.acclaim in the United States, Canada, Europe, India and China for her keynote.talks.on.contextual.innovation,.internationalization,.and.designing.for emerging markets Apala has published widely; her latest article in

innova-Interactions.magazine,.‘The.Washing.Machine.that.Ate.My.Sari’,.has.proved.to.be.immensely.popular

Apala has been with HFI since 1999 and is currently vice president of.Asia,.managing.offices.in.India,.China.and.Singapore An.award-winning.designer.(International.Audi.Design.Award),.Apala.has.led.teams.spanning.design,.development,.testing.and.deployment.of.products Apala.holds.an.M.Sc (with.distinction).in.interface.design.from.London.Guildhall.University.(now.University.of.North.London)

Apala has been associated with ACM as ACM SIGCHI’s vice chair for.local.chapters.in.the.past.and.is.currently.a.member.of.the.editorial.advisory

board.for.Interactions.magazine (apala@humanfactors.com)

xiv Editors

Girish V Prabhu.is.Director,.UBD.Innovation.

and Strategic Development at Srishti Labs Prior.to.this.assignment,.he.was.the.Asia.Chief.for.UX.Staff.and.Delivery.at.HFI Girish.has

20  years of experience in contextual tion,.new.product.and.business.development,.and.product.inter.nationalization Throughout.his career he has held various management.positions in new business development,.research and product commercialization at.Eastman Kodak, HP labs, and Intel He was.instrumental in implementing user-centred.design processes in multiple product areas He.has.the.unique.experience.of.taking.three.new ideas from early conceptualization to a.full-fledged new business He has published.referred.papers.in.international.journals.and.holds.14.U.S patents He.is.a.member.of.PDMA,.ACM-SIGCHI,.and.HFES He.holds.a.Ph.D and.M.S in.industrial.engineering.(human.factors).from.the.University.of.Buffalo,.New.York,.and.a.B.E in.mechanical.engineering.from.the.National.Institute.of.Engineering,.Mysore His research.interests.include.contextual.innovation,.business.models.for.sustainable.development.and.design.language.research.for.emerging.markets (girish_v_prabhu@yahoo.com)

Rahul Ajmera.is.principal.design.researcher.

at Human Factors International An trial designer by education, he graduated.from.the.National.Institute.of.Design,.India,.in.2003 A.Certified.Usability.Analyst,.he.has.been.working.at.Human.Factors.International.ever since As a part of his responsibility.there, he has handled several research proj-ects.with.HP.Labs.India Gesture.keyboard.is.one of those projects where he was actively.involved in all aspects of user and design.research (rahul@humanfactors.com)

indus-Sarit Arora is Executive Director, Human.

Factors International He has more than

10  years of experience in the area of user.experience.design.and.innovation He.has.a.bachelor’s.degree.in.engineering.from.Delhi.University and a master’s in industrial.design.from.the.National.Institute.of.Design,.Ahmadabad At HFI his responsibilities.include design and evaluation of products.and.software.applications,.client.interaction,.understanding.user’s.requirements,.leading.design.teams.and.teaching.user.experience.design and innovation courses to profes-sionals He employs contextual innovation.methodologies.to.identify.new.opportunities.and.discover.users.through.ethnographic studies to develop breakthrough and engaging products.and.services HFI.clients,.for.whom.he.has.helped.create.innovative.prod-ucts and services, include MIT media labs, Intel, HP, Baxter and Haier (sarit@humanfactors.com)

xvi Authors

Intel’s User Experience Group At the roads.of.research.and.design,.her.work.spans.from ethnographic and design research to.defining consumer experiences and product.features.for.Intel’s.digital.home.platforms.Her.primary.interests.lie.in.understanding.the role of design in different cultural set-tings.and.the.various.methodologies.that.are.required to translate specific cultural needs.into.tangible.manifestations.of.a.product.that.reflect.the.experience/interactions.users.wish.to.have.with.them At.the.opposite.end,.she.is.exploring.possibilities.for.developing.universal.principles.of.design.that.can.be.inspired.and.developed.from.looking.at.themes.within.specific.cultures (ashwini.asokan@intel.com)

cross-Shekhar Borgaonkar has a Ba.E degree in.

tions.and.Ph.D (IISc).focused.on.optimisation.techniques He.worked.in.a.number.of.indus-tries.before.starting.his.own.company.in.1998 His.stint.as.a.Human.Interface.designer.started.here where he invented an email device that.won.the.best.product.award.at.the.Bangalore.computer.show.in.2001

electronics,.M.Tech (IIT.KGP).in.communica-At HP Labs India, Borgaonkar currently.leads.a.team.that.focuses.on.affordable.access.devices Apart.from.Gesture.Keyboard,.he.with.his.team.has.worked.on.affordances.of.a.laptop.with.an.auxiliary.display,.a.device.for.language.agnostic.e-mail.and.a.calculator++.for.shopkeepers,.etc.,.among.other.projects He.is.currently.working.on.extending.the.functionality.of.a.mobile.phone.from.a.collaboration.perspective (sab@hp.com)

Alvaro Diaz.has.over.12.years.of.experience.as.

an industrial designer He specializes in.human.factors.analysis.and.research.analysis.for new products, performs design research.including.problem.analysis,.user.environment.analysis and usability testing He works as a.consultant.for.a.wide.variety.of.clients.in.Latin,.North.America.and.some.European.countries

in industries such as pharmaceuticals, health.care.and.consumer.products

Emerging countries is the focal point of Alvaro’s work and research Between 2006 and 2009, he presented some conferences in Argentina,.Canada, China, Colombia, Germany, Mexico and the United States Since.2002,.he.has.been.working.as.a.lecturer.at.the.University.of.Montreal.and.as.an.invited professor.at.El Bosque.University.

Alvaro attended Universities in Montreal, Milan and Bogota He holds

a bachelor’s degree in industrial design and a master of science degree.in.computer.aid.design.and.ergonomics.from.the.University.of.Montreal (alvaro@beedesign.ca)

Warren Greving.is.an.international.R&D.con-sultant Currently, as director of Srishti.International Labs, he is developing a new.innovation.centre.as.a.part.of.Srishti.School.of.Art,.Design.and.Technology,.Bangalore,.India This new centre focuses on assisting compa-nies during the early phase of innovation.using design thinking to effectively navigate.the breadth of new users, value propositions.and.business.models.in.high.growth.markets.like.India He.also.consults.on.the.challenges

of international R&D organizations working.in.the.global.mixture.of.developed.and.developing.markets.with.a.focus.on.the.U.S.,.India,.China.and.Russia From.2001.to.2008,.he.led.the.establishment.and.development.of.three.new.research.organizations.for.Hewlett-Packard.in.Bangalore,.Beijing.and.St Petersburg His.breadth.of.R&D.organizational.knowledge.was.developed.over.23.years.of.product.research.and.develop-ment.for.Hewlett-Packard His.primary.research.interest.is.the.interaction.between human culture, technology and new product development His.career.was.launched.from.the.combination.of.degrees.in.cross-cultural.com-munication, computer .science, mathematics and education He presently.works from Chennai, India, but has enjoyed living in Beijing, Bangalore,.California,.Hong.Kong,.Colorado.and.Taiwan (w.greving@yahoo.com)

Mosharrof Hossain is a Senior Programme.

Officer, D.Net (Development Research.Network),.Bangladesh He.is.coordinating.the.Pallitathya Bikash programme under which.the Info Lady project is being implemented Mr Hossain obtained his M.S.S degree in.sociology.in.2000 He.also.obtained.his.DYDW.(Diploma in Youth in Development Works).under.the.Commonwealth.Youth.Programme

xviii Authors

(CYP).from.the.University.of.Huddersfield,.the.United.Kingdom.and.BOU Hossain.has.a.background.in.ICT-oriented.project.planning.and.implemen-tation,.and.worked.on.a.project.under.the.Ministry.of.Women.and.Children.Affairs.as.an.assistant.programmer.(2004–2007) He.has.worked.on.a.com-puter.installation.for.the.Ministry.of.Food.and.Disaster.Management.(1997–2004) He  has also served at Channel F2 Events as a consultant (IT and.creative;.2007) (mosharraf@dnet.org.bd)

Susan Huotari.is.a.senior.project.manager.in.

Nokia’s music organization in Espoo,.Finland She has been working in the user.experience field since 1995 She has experi-ence in all phases of user experience and.product implementation for small technol-ogy.start-ups.to.large.companies.like.Nokia (susan.huotari@nokia.com)

She.has.actively.participated.in.mobile.device.and.service.user.interaction,.has.been.awarded.for.innovation,.and.is.the.recipient.of.a.multi-media.patent She.has.completed.many.design.research projects in numerous countries, usually for new product development Her.current.role.involves.developing.social.music.concepts.and.project-managing.them.to.implementation.with.constant.consumer.validation

with 19 years of experience in designing for.corporate, the social sector and government.agencies In.the.past,.Unmesh.has.worked.with.Philips.Design.as.a.senior.manager.and.Design.Matters Consulting as founder director He.has.led.new.business.initiatives.for.the.emerg-ing.markets.with.a.number.of.successful.local.and.global.projects He.specialises.in.advance.product planning, people focussed product.and design strategy, innovation process and.design.service.development.for.multiple.sectors.such.as.healthcare,.consumer.products, lighting, industrial equipment, telecom equipment and FMCG.packaging Unmesh is committed to sustainability and the process of.co-creation to deliver products and services that are relevant, simple and.ethical Unmesh.has.worked.on.social.innovation.projects.for.employment.generation,.craft.revival,.access.and.healthcare,.the.most.notable.one.being.the.“Philanthropy.by.Design”.program.of.Philips.Design He.was.a.part.of

Philips Design’s.global.creative.platform.for.sustainable.design Unmesh.is.a.visiting.faculty.at.premier.design.schools.in.India.and.has.guided.design.and.anthropology.students.from.European.and.Indian.design.schools He.holds.a.master’s degree in industrial design from the IDC, Indian Institute of.Technology, Mumbai, and an engineering degree from the Government.College.of.Engineering,.Aurangabad He.is.setting.up.a.creative.community.platform.for.social.innovation.and.sustainability—‘Co-Create’.

Currently, Unmesh is working as design leader for Asia for the Philips.Consumer Luminaire business in Shenzhen, China, focussing on home.lighting.solutions,.energy.efficiency.and.renewable.energy

His work has received recognition globally and he has participated in.global.forums.for.design:

• Conferences.and.papers:.“In.a.Planet.of.Our.Own”—International.Conference.on.Sustainable.Design,.IDC,.IIT.Mumbai;.IDSA.Annual.Conference.(2007.and.2008);.International.Conference.on.Sustainable.Village.Based.Development,.Colorado.State.University.(1994)

• Design awards: IDEA Award (2008); Red Dot Singapore Award.(2008);.INDEX:.Award.(2009);.UNESCO–Water.Digest.Award.(2008.and 2009); Central Silk Board of India Innovation Award (1996);.Chicago.Trade.Fair.Innovation.Award.(1992)

Technology Review.magazine’s.Humanitarian.of.the.Year.in.2007.for.his.work.in.bringing.accessible.mobile.services.to.microfinance.groups.in.rural.India (tparikh@gmail.com)

xx Authors

Steve Portigal is the principal of Portigal.

firm.in.the.San.Francisco.Bay.area.that.helps.organizations to discover and act on new.insights.about.their.customers.and.themselves Trained as a specialist in human–computer.interaction.(with.an.M.Sc from.the.University.of.Guelph.in.Canada),.Steve.founded.Portigal.Consulting in 2001 He writes regularly for.Core77 and the Portigal Consulting blog,

‘All  This ChittahChattah’ Steve is an avid.photo.grapher.who.has.created.a.Museum.of.Foreign.Grocery.Products.in.his.home (steve@portigal.com)

Beena Prabhu.is.a.group.lead.in.HFI’s.Bangalore.

office and works within HFI’s research labs She.has.been.working.in.the.consulting.field.for.the.past.15.years She.has.experience.in.design.research, conceptualization, project manage-ment.and.project.execution Her.area.of.focus.is.innovation,.consumer.profiling.and.cross.cul-tural.research Her.experience.spans.multiple.domains ranging from healthcare, education,.retail, and telecommunications to consumer.electronics Her.interests.are.user.research.and.innovation in the emerging markets She has.published papers in refereed journals and.international.conferences

She has been extensively involved in design research projects that have.spanned.over.multiple.domains.ranging.from.healthcare,.education,.retail,.and telecommunications to information technology The projects have.ranged.from.cross-cultural.studies,.ideation.and.conceptualization.for.new.product development, to landscape research and consumer profiling Her.responsibilities.at.HFI.include.management.of.design.research.projects.and.client.management (beena@humanfactors.com)

Research,.the.research.effort.of.Future.Capital.Holdings In her role, she covers macro and.thematic.issues.on.demographics,.income.and.consumption patterns The group’s last.research paper (‘The Next Urban Frontier:.Twenty.Cities.to.Watch’),.in.partnership.with.the National Council of Applied Economic.Research, analyzed spending, savings and.demographic patterns in 20 of India’s most.dynamic.urban.centres She.is.a.member.of.the.Prime.Minister’s.Advisory.Committee for JNNURM (Jawaharlal Nehru National Urban Renewal.Mission) She is also an Aspen Institute fellow, as part of their India.Leadership Initiative Previously, Roopa was a vice president and global.economist.at.Goldman.Sachs While.at.GS,.Roopa.co-authored.the.report

‘Dreaming.with.BRICs:.The.Path.to.2050’,.along.with.other.published.papers

on topics such as long-term growth in India, global trade, migration, women’s.employment.and.global.aging.and.consumption.patterns Roopa.holds.a.B.A. in.ethics,.politics.and.economics.and.international.studies.from.Yale University and an M.Sc in development studies from the London.School.of.Economics (roopa@fch.in)

Mrinal Kanti Rai is.a.Senior.User.Researcher,.

Human Factors International He has been.working.in.the.area.of.contextual.innovation.and persuasion engineering for more than

3 years

Encouraged by his passion for sociology,.new.age.media.and.persuasive.design,.he.con-stantly reinvents himself to meet new chal-lenges.at.his.work.place He.has.been.involved

in more that 100 PET-based interviews; viding strategic recommendations to design.persuasive.Web.sites.for.various clients.across.the.globe (mrinal.r@humanfactors.com)

pro-xxii Authors

Mathivanan Rajendran is a Senior Human.

Factors Specialist, HFI He has been ing.with.HFI.in.the.area.of.persuasion.engi-neering.since.2007 His.primary.responsibility.at.HFI.involves.providing.online.solutions.for.clients.across.multiple.domains.ranging.from.telecommunications and retail to financial.services by assisting them in designing for.persuasion,.emotion.and.trust.(PET)

consult-Mathivanan.is.a.Certified.Usability.Analyst.and.holds.a.master’s.degree.in.human factors.and.ergonomics.from.Virginia.Tech He.is.an.active.theatre.performer.and.has.acted.in.14.full.length.productions He made.his.debut.as.a.director.in.2009 (mathivanan.r@humanfactors.com)

Joan Vinyets Rejón, Ph.D., is partner and.

sultancy.firm.focused.on.innovation,.where.he.develops innovation projects for inter.national.companies He.holds.a.Ph.D in.social.commu-nication.from.the.University.Pompeu.Fabra.of.Barcelona,.a.degree.in.anthropology.from.the.University.of.Barcelona,.a.B.A (Hons).degree.in.design from the University of Southampton.and a .master’s in design from the Domus.Academy.of.Milano (joan@piecepie.com)

cofounder.of.A.Piece.of.Pie,.a.management.con-

Simona Rocchi.is.Senior.Director.of.Design-tion,.she.manages.the.global.creative.direction.of.various.sustainability-based.activities,.and.she oversees the development of design ser-vices targeting emerging and developing markets Her.work.in.emerging.and.develop-ing.markets.started.in.2002.when.she.was.also.appointed.chair.of.the.Philips-wide.Task.Force.on.New.Sustainable.Business.Initiative,.estab-lished.to.stimulate.innovation.projects.in.BOP.(base.of.the.economic.pyramid).markets.During that period, she contributed to the start-up of various Philips.healthcare and lifestyles BOP projects in India Her contribution was.spacing.from.the.definition.of.frameworks.to.conduct.contextual.research,

for-Sustainability,.Philips.Design In.this.posi-to the development of value cocreation approaches by partnering with.local .stakeholders Results of her most recent BOP activities have been

externally recognized via publications, conference speeches and design.awards,.such.as:

• Chapter.for.the.Sustainability Challenges and Solutions at the Base of the

Pyramid.book,.2008

• Presentation.at.the.Sustainable.Innovations.at.the.Base.of.the.Pyramid.Conference,.Helsinki,.2008

• Interview.with.Business Week,.September.2008

• IDEA.Award.(IDSA.2008);.Red.Dot.Award.2008,.Singapore;.INDEX.Award.2009.(Chulha.stove.for.safe.and.healthy.indoor.cooking.in.rural.India)

He built his career in advertising over

40 years He.worked.with.J Walter.Thompson.for 29 years He was president of Contract.advertising,.a.fully-owned.subsidiary.of.JWT.for.16.years He.was.moved.to.Young.and.Rubicam.as.president.by.the.holding.company.WPP He.was.on.the.management.board.of.the.Asian.operation.for.5.years His.experience.spanned many product categories: FMCG (fast-moving consumer goods),.bikes.and.cars,.banking.and.insurance,.airlines.and.hotels He.has.written.two.books.on.advertising.and.has.contributed.over.150.articles.on.a.variety.of.subjects.to.Indian.newspapers.and.magazines

Currently.he.lives.in.Pondicherry He.is.a.part-time.marketing.consultant.with.Human.Factors.and.also.teaches.advertising.at.a.government.ladies’.college (ramrajsehgal@gmail.com)

Forhad Uddin is the Deputy Programme.

Director, D.Net (Development Research.Network) Mr Uddin completed his B.Sc in.fisheries in 2002 and M.S in fisheries and.marine resource technology in 2005 from.Khulna.University,.Bangladesh He.started.his.professional.career.at.D.Net.in.2004 Currently,.he.is.leading projects.titled.Empowering.People.through Improved Access to Livelihood.Information and Digital Livelihood Content

xxiv Authors

Development He.worked.with.a.number.of.action.research.projects.on.ICT.for.development During.the.professional.work,.he.has.developed.his.capac-ity on .programme management, project management, research manage-ment,.site.selection.methodology.for.telecentre.operation,.livelihood.content.development.methodology,.designing.training.session,.evaluation.of.devel-opment.projects.and.statistical.analysis Mr. Uddin.has.diversified.interests.that include rural development and planning, access to information and.knowledge for development, conservation and management of natural.resources.and.environmental.impact (forhad@dnet.org.bd)

Darelle van Greunen is a senior lecturer.

and.researcher.in.the.School.of.ICT,.Nelson.Mandela Metropolitan University in Port

She.is.also.contracted.as.a.senior.researcher.for.SAP.Research.in.Pretoria.and.is.respon-sible.for.the.user.experience.and.user.inter-face design components of all projects.executed.from.the.Pretoria.research.location Darelle holds degrees in computer science,.African languages, higher education and.computer.education She.completed.her.Ph.D in.computer.science.in.2009 The.title.of.her.thesis.is.‘A.Framework.for.the.User.Interface.Design of Business Process Management.Tools’ Darelle serves on the board of direc-tors.of.several.professional.IT.bodies.and.frequently.acts.as.keynote.speaker.at.national.and.international.conferences The.primary.focus.of.her.research

is that of user experience of user interfaces in developing countries (Darelle.vanGreunen@nmmu.ac.za)

As general director, Dmitry Volkov oversees.

the strategic growth and development of.IT-Online.Group.as.well.as.executive.manage-ment.of.its.international.projects The.leading.provider.to.the.internet.and.virtual.media.com-munities.includes.four.divisions:.UsabilityLAB,.CareerLAB, Careerist and PayOnlineSystems These.business.divisions.provide.a.broad-range.of.key.service.offerings.to.content.owners.and.individual.users.on.a.worldwide.basis Seeing.explosive growth within IT-Online’s business.group, Usability Lab has recently gained sig-nificant.momentum.and.recognition.as.a.premiere.source.for usability.design.and.testing.for.a.wide.range.of.projects,.both.online.as.well.as.in.the.general.global.consumer.and.business.market (d.volkov@it-online.ru)

Excellence for Rural Informatics, and an.associate professor on the faculty of the.Computer.Science.and.Information.Technol-ogy School, Universiti Malaysia Sarawak.(UNIMAS) He has expertise in the area of.information and communications technol-ogy for rural development (ICT4RD), and is.developing a community-centred methodol-ogy.for.building.software.for.rural.communi-ties In.addition.to.working.with.UNESCAP,.Alvin has also worked on the eBario Project which garnered numerous.awards including the Commonwealth CAPAM Innovation award, which.beat.112 inter.national.submissions.worldwide His.other.research.interests.include cultural effects on usability evaluation, and the use of ICTs in revitalising as well as maintaining the indigenous languages of Borneo (awyeo09@gmail.com)

Before.an.in.depth.examination.of.design.for.emerging.markets,.this.intro-My.journey.with.these.emerging.markets.goes.back.25.years In.the.early.1980s,.I.spent.4.years.working.in.Taiwan At.that.time,.even.though.it.and.the other Asian Tigers—South Korea, Hong Kong, and Singapore—were.not referred to as emerging markets, they were already pioneering rapid economic development through efficient, cost-effective exporting into the.global.supply.chain.of.developed.countries In.spite.of.that,.a.decade.later,.during.a.marketing.stint.in.Hong.Kong,.it.was.still.clear.that.the.sum.total.of.all.these.rapidly.growing.economies.was.not.large.enough.to.excite.multi-national business managers to target their.product development for these.markets;.they.were.just.too.small.even.in.the.aggregate.

I returned to Asia in 2001,.first.to.Bangalore,.India,.for.three.years.and.then.Beijing,.China,.for.five.more For.the.last.eight.years.I.have.been.liv-ing,.working.,.studying,.and.reflecting.on.what.is.happening.in.these.coun-tries.as.I developed high-tech.research.organizations The.transformation.of.these.countries.into.emerging.markets.is.now.clear These.countries,.in.the time from the 1980s to now, have gone from insignificant markets to.being.a.major.part.of.the.world.economy They.have.become.truly.emerging.markets,.with.strengths.as.both.consumers.and.producers As.we.approach.the.end.of.the.first.decade.of.the.new.millennium,.it.is.possible.to.see.where.these emerging markets have come from and understand how they will.continue to develop Now,.large.multinational.organizations.are.expected

ConTEnTS

Recent.Economic.History 2Key.Emerging.Market.Research.Threads 4Four.Large.Dissimilar.Countries—Brazil,.Russia,.India.and.China 6Demographic.Sampling.in.India 8The.Common.Characteristic.of.Emerging.Markets 10The.Excitement.Continues 13References 13

Emerging markets is an economic term It comprises a large collection of.countries.that.are.experiencing.very.rapid.economic.growth.by.their.expand-ing.participation.in.the.global.economic.system.of.free-market capitalism Recent.economic.history.provides.the.background.of.the.emerging.markets.since.their.economic.transformation.is.the.primary.reason.they.are.grouped.together Design, which takes seriously the context of these emerging markets,.will.play.a.significant.role.in.enabling.organizations.to.effectively.create, develop, and deliver new value in these markets Even though the.grouping.is.economic, a designer’s interest is.far broader.than economics This.introduction.puts.these.markets.into.perspective.and.provides.a.frame-work.that.can.guide.a.designer’s.journey.into.their.whole.context

Recent Economic History

est.in.recent.economic.history Over.the.last.15.years.we.have.moved.from.economic.crisis.to.economic.crisis—from.the.Asian.debt.crisis.to.the dotcom.bubble to the global housing price bubble and many others in between We.are.now.just.coming.out.of.what.is.understood.to.be.the.most.serious economic.crisis.since.the.1920s,.with.the.almost.complete.freeze.of.the.global.system.of.credit Within.this.economic.period.of.time.we.can.observe.the.rise.of.emerging.markets Debates.over.the.role.of.financial.aid.to.poor.nations.have.again.become.very.heated Economic.history.is.an.important.part.of.the.context.of.the.emerging.markets.that.we.will.examine.here.not.as.economists.but.as.observers.of.what.is.going.on.around.us

Living.and.working.in.the.emerging.market.area.has.increased.my.inter-First.we.will.look.at.what.is.generally.accepted.as.recent.economic.history We.will.stay.out.of.the.causes.and.effects.that.drive.the.diversity.of.opinions.in.the.debates.and.attempt.to.stay.with.what.I.suggest.is.common.understand-ing.of.the.events.that.get.us.to.the.current.state A.large number.of.economists,.prominent.among.them.being.Jeffrey.Sachs.and.Angus.Maddison,.have.high-lighted.the.data.on.the.growth.of.both.the.world.population.and.average.per

An Introduction to Emerging Markets 3

dire.warnings.from.population.scientists.that.were.issued.several.decades.ago More.consistent.with.those.negative.assessments.are.a.second.observa-tion.that.economists.make.from.this.data,.which.is.that.growth.has.not.been.uniform.across.the.globe;.it.is.faster.and.more.consistent.in.some.countries.than.others There.is.a.general.understanding.that.over.the.last.200.years.the.global.population.has.first.experienced.truly phenomenal.economic.growth.and.rising.standards.of.living,.and.second,.it has.developed.a.large.disparity.between.the.wealthiest.and.the.least.wealthy

The.explanation.of.why.this.has.happened.and.what.implications.it.has.are the source of the debate between many prominent individuals Yet.there.are.a.number.of.historical.developments.and.events.along.the.way.that.lead.to.the.current.economic.environment.of.developed.and.emerg-ing.market.countries The.first.is.the.scientific.and.industrial.revolution.that.started.roughly.in.the.nineteenth.century.and.has.accelerated.to.the.present The obvious result of that revolution has been technology that.has.increased.productivity.in.agriculture.and.industry Where.that.tech-nology has been available, there has been a dramatic increase in pros-perity and well being That prosperity has reinforced institutions that.support.its.development.and.create.a.favourable.environment.for.further.technological.advancement,.and.it.brings.large.sociological.change,.as.we.will.see.next

The.second.development.that.is.well.understood.has.been.the.growth.of.free.market.capitalism.and.trade From.our.vantage.point.we.have.come.to.accept.these.as.a.given.of.modern.life Yet.they.have.developed.along-side scientific.and.industrial.revolutions.in.the.last.200.years By.the.end.of.the.19th century,.the.world.was.experiencing.an.era.of.global.free market.capitalism and trade very similar to today’s globalization The fact that.the.technological.revolution.and.participation.in.trade.happened.faster.in.some.countries.than.others.clearly.contributes.to.macro.global.economic.growth and the disparity between those that benefited, which we have.observed.earlier

Finally,.in.the.last.100.years,.a.number.of.historical.events.have.occurred.that.have.contributed.and.led.to.developed.markets.and.emerging.markets At.the.turn.of.the.20th.century,.the.advent.of.World.War.II,.followed.by.the.severe, global economic depression in the early decades, interrupted eco-nomic.growth.in.much.of.the.newly.industrialized.world.and.placed.into.question.the.very.foundations.of.its.economic,.political.and.social systems.and.the.global.free.market Strong.opponents.of.free.market.capitalism.and.its institutions took over administration in a number of countries By  the.middle.of.the.century,.when.international.political.stability.returned,.there.were three different economic and political systems coexisting and com-peting for allegiance The first system was led by the United States and.Western.Europe,.representing.continuity.with.the.free.market.capitalism.of.the.19th century A.second.system,.centred.on.Russia,.its.Soviet.states.and.China,.was.defined.by.centralized.economic.planning.and.state.ownership

of.production,.placing.most.economic.decisions.with.the.state.as.opposed.to.individuals.within.open.markets A.third.system.formed.among.those.not.participating.in.the.first.two,.the.nonaligned.states,.primarily.represented.by.India This.system.isolated.itself.from.the.international.economic.scene,.striving to establish economic self sufficiently and independence within.national.boundaries.while.borrowing.some.features.of.the.first.two.

In the last decades of the twentieth century, the latter two economic systems suffered severe crises Not only did each fail to generate strong.economic growth and competitive increases in the standard of living.within their member countries, they encountered emergency situations.that.led.to.their.economic.systems.being.dissolved.and.dismantled China.began market reforms in the 1970s The USSR began to dissolve in the.late.1980s India.avoided.economic.collapse.in.the.early.1990s As.the.two systems dissolved, they introduced economic reforms that allowed their.members to enter the global system of free market capitalism, turning.them.into.emerging.markets During.the.same.period,.free.market.capital-ism.grew.in.strength.and.formed.the.foundation.of.a.newly.strengthened.global.free.market.economic.system The.countries.that.subscribed.to.that.system.reached.new.heights.of.economic.prosperity.and.are.now.referred.to.as.developed.markets

Following.from.these.events,.the.world.now.has.a.new.global.economic.order.that.includes.developed.and.emerging.markets This.era.of.the.global-ization.of.the.free.market.economic.system.has.presented.new.opportunities.for developed and emerging markets Initially, companies took advantage.of.the.low.cost.of.production.in.emerging.markets.to.lower.their.costs.by moving.their.investment.and.production.to.these.markets Over.a.fairly.short.period.of.time.this.investment.and.accompanying.trade.has.enriched.those.markets.to.the.point.where.their.rising.incomes.create.new.market.demand.and.opportunity As.they.catch.up.with.the.developed markets,.these.emerg-ing.markets.are.experiencing.rapid.economic.growth.and.increase.in.their.standard.of.living.similar.to.that.experienced.in.developed.markets.in.the.middle.of.the.last.century Not.only.do.they.grow.but.they.grow.faster.rela-tive.to.developed.markets Relevant.to.such.growth.are.the.new.products.and.services.that.provide.the.motivation.for.the.design.focus.on.these.emerging.markets This.stage.was.preceded.by.the.economic.and.historical.events.of.the.last.200.years

Key Emerging Market Research Threads

acterising.emerging.markets In.October.2003,.two.economists.at.Goldman.Sachs,.Dominic.Wilson.and.Roopa.Purushothaman,.published.a.paper.titled

We.will.now.look.at.three.threads.of.research.that.are.important.to.char-An Introduction to Emerging Markets 5

current.growth.rates.of.Brazil,.Russia,.India.and.China.applied.consistently.over.the.next.five.decades,.their.combined.economies.would.be.larger.than.the.combined.economies.of.the.current.six.largest.developed.countries They.supported.this.with.projections.of.current.economic.growth.data, making.the somewhat tenuous assumption that each of these countries would successfully continue to support an environment that would enable those.growth.rates.to.continue

This.idea.has.gained.wide.attention.and.helped.promote.the.use.of.the.term

around.the.implications.of.this.trend The.paper.is.well.worth reading.and.covers.in.detail.how.these.emerging.markets.grow What.is.most.interesting.though is that this paper has been instrumental.in bringing these emerg-ing.markets.into.mainstream.business.planning Few.people.question.the.impact.or.importance.of.these.markets It.has.developed.people’s.thinking.about.how.important.these.emerging.market.countries.are.within.the.global.economic.system Such.change.has.contributed.to.the.increase.of.interest.in.BRIC.by.the.design.community

est socio-economic demographic, which is a significant portion of these.emerging markets, cannot support profitable businesses This poorest.socio-economic.group.is.the.bottom.of.the.pyramid,.or.BOP Individuals.at.the.BOP.earn.less.than.$2.a.day C.K Prahalad,.a.distinguished.professor

The.second.thread.challenges.a.perception.within.business.that.the.poor-of.business.management,.has.published.a.book,.The Fortune at the Bottom of

the Pyramid,.in.2005,.which.goes.in.depth.into.how.businesses.already.do

not.go.into.the.details.his.work,.but.it.has.huge.implications.for.the.design.community Today,.the.majority.of.designers.do.not.personally.come.from.the BOP and so lack the overlapping life experiences that can help them.understand the context of BOP users However, businesses are increas-ingly.motivated.to.develop.successful.models.for.BOP.and.are.engaging.the.design.community.on.the.BOP.challenge

The.last.thread.of.interest.challenges.another.common.perception It has.been.assumed.that.the.latest.information.and.communication.technologies.are.not.relevant.to.meeting.the.needs.of.those.at.the.BOP It.is.assumed.that.the.fundamental.needs.of.water,.food,.housing,.security,.health.care,.edu-cation.and.employment.require.basic.low-tech.solutions.and.that.high-tech.solutions are significantly less relevant or of lower priority The infor-mation and communication technologies for development .movement’s.(ICTD) research and practices have challenged this assumption The.wireless.communication.industry.is.probably.the.strongest.example.that.overturns.this.perception,.as.mobile.telephony.has.been.widely.deployed.around the world in all socio-economic segments There is significant.research that demonstrates societal development and economic growth.in.direct.relationship.to.mobile.telephony For the.design.community,.this

introduces.another.interesting.challenge—that.is,.groups.of.users.that.are.receiving technology without the usually assumed technological milieu.or continuity Yet.there.is.increasing.interest.by.development.agencies.to.utilize.these.technologies.to.support.growth.and.development.

Four Large Dissimilar Countries—

Brazil, Russia, India and China

The.emerging.markets.include.a.large.number.of.countries.around.the.globe.but.are.frequently.represented.by.the.largest.four—Brazil,.Russia,.India.and.China Jim.O’Neill,.chief.economist.at.Goldman.Sachs.who.coined.the.term.BRIC,.said.his.definition.of.what.countries.to.group.together.in.the.emerg-ing.market.bucket.was.‘To.become.a.BRIC,.my.definition.is.that.an.emerging.market.has.to.have.the.potential.to.be.already—or.in.the.next.decade—at

simply.economic.size,.there.is.little.reason.to.assume.that.they.are.similar.in.other.ways The.cultural,.political,.social.and.historical.difference.between.these countries is immense In the words of Philip Poole, global head of.emerging.markets.research.at.HSBC,.‘….the.BRICs.have.never.had.a.huge

To highlight the strength of this statement, let us examine these four.countries To.start.with,.consider.Russia,.a.country.whose.relationship.with.the.Western.world.has.frequently.changed.from.seeking.close.ties.to.distanc-ing.itself.from.it Geographically,.it.is.immense,.stretching.from.Europe.across.11.time.zones.to.the.Pacific Although.it.has.ethnic.diversity,.at.the.core.is.the.strong.Russian.people,.with.their.Slavic.ancestry Economically,.it.is.highly.dependent.on.extraction.industries.and.global.energy.markets It spent.eight.decades.organized.as.a.Marxist.communist.society.with.a centrally.planned.economy A.sizable.portion.of.its.relatively.small.population.of.180.million.people.is.concentrated.in.two.cities,.Moscow.and.St Petersburg The.Russian.Orthodox Church, which is a branch of Eastern Christendom, is a strong.political,.religious,.and.cultural.force The.economic.reforms.of.the.last.two.decades.have.at.times.caused.severe.economic.stress.for.its.citizens,.leaving.them.somewhat.less.enthusiastic.about.free.markets

We.can.contrast.this.with.the.case.of.China,.which.over.the.last.200.years.has.also.had.a.difficult.relationship.with.the.Western.world,.starting.with.conflicts.with.colonial.powers.and.continuing.through.a.period.of.isolation.following.the.establishment.of.the.People’s.Republic While.geographically.China is not small, its very large population of around 1.5 billion people.stretches its natural resources That population, predominantly urban, is.concentrated.over.about.one.third.of.the.country.along.the.eastern.seaboard

An Introduction to Emerging Markets 7

Relatively.speaking,.China.is.ethnically.very.homogenous,.with.about.92% of.the population.being.Han.Chinese It.has.had.a.closed-market.Soviet-style.planned.economy.for.a.relatively.short.two.decades.from.the.1950s.until.the.1970s.when.it.started.introducing.open.market.reforms Economically,.it.is.diverse.and.powerfully.positioned.as.one.of.the.largest.producers.contrib-uting.to.the.global.supply.system.of.manufactured.goods Although.it.has.one of the oldest continuous civilizations on earth, its religious traditions.have.been.strongly.subordinate.to.the.political.system.for.the.last.60.years In.sharp.contrast.to.the.USSR,.the.Chinese.experience.of.economic.liberaliza-tion.has.been.very.positive,.phenomenally.lifting.about.800.million.people.out.of.poverty.and.boosting.a.significant.number.of.people.into.the.category.of.the.world’s.richest

Turning.to.India,.we.see.a.country.that.is.significantly.different.on.many.dimensions.from.the.first.two As.a.colony.of.the.British.Empire,.India.has.been.strongly.impacted.by.its.relationship.with.the.West,.including.its.very.unique non-violent struggle for independence, which was deeply marred

by post-independence sectarian violence India’s very large population,.second.only.to.China’s,.is.still.predominantly.rural.and.is.very.uniformly.distributed.across.all.its.territory Its.population.is.extremely.diverse,.with.six different writing systems and 26 different spoken languages officially.recognised.by.the.government Post.independence,.for.30.years.India.had.a.very.unusual.combination.of.a.democratic.political.system.combined.with.a.state.planned.economy It.has.not.participated.strongly.in.global.manufac-turing.as.China.has.but.is.rather.strong.in.the.global.IT.services.industry Like.China,.its.civilization.has.a.long.history Yet,.in.sharp.contrast.to.China,.religion.has.a.dominant.role.in.all.aspects.of.contemporary.society.in.India Economically,.India.is.just.starting.to.see.the.benefits.of.integration.into.the.global.system,.although.large.parts.of.the.rural.population.have.yet.to.see.significant.benefit

Finally,.to.complete.the.contrasting.BRIC.tour,.we.look.at.Brazil,.the.only.country.of.the.four.that.is.in.the.American.continent.and.the.southern.hemi-sphere As.a.Portuguese.colony,.a.large.portion.of.its.cultural.and.histori-cal.roots.is.strongly.connected.with.continental.Europe The.ties.between.Brazil.and.the.Western.world.are.very.close.because.of.the.large.number.of.European.immigrants Geographically,.Brazil.is.large,.with.a.diverse.and.rich.natural.environment.split.between.tropical.and.temperate.regions It has.the.world’s largest.number of.unconnected.people, those outside.communica-tion.with.the.global.human.society The.larger.Brazilian.population.is.very.ethnically.diverse.because.of.its.immigration.patterns.from.many.parts.of.the.world Brazil’s.religious.institutions.come.from.the.Western.branch.of.Christendom.and.heavily.influence.its.society Brazil.has.significant.natural.resources,.which.includes.its.very.large.tropical.forest As.the.world’s.tenth.largest.economy,.it.is.a.major.regional.exporter

ing.markets From.the.point.of.view.of.a.designer,.they.cannot.be.treated.like

together.continues.to.be.more.of.a.surprise As.the.editors.of.The Economist.

commented.in.their.article.on.June.20,.2009,.‘Not.just.straw.men’,.it.should.not.be.a.surprise.when.they.(BRICs).met.politically.and.produced.very.little.significant.results.considering.‘how.disparate.they.are’.7.The.designer cannot.work.from.broad.generalizations.about.these.countries.but.must.explore.the.context.of.each Yet,.in.that.exploration,.the.economic.history.that.has.lumped.them.together.frames.some.common.characteristics.that.are valuable.guides.for.such.exploration

Demographic Sampling in India

Having considered how different these emerging markets are, before we.identify.some.similarities,.let.us.look.at.some.individuals,.which.will.illus-trate.both.the.need.to.do.user.studies.in.these.markets.as.well.as demonstrate.an.approach.to.identifying.profiles

First.consider.an.Indian.woman.who.was.a.participant.in.a.community.information.gathering.session.in.a.small.village.south.of.Bangalore.around.2002 This.village.is.less.than.40.km.from.Bangalore,.a.city.that.has.come.to.represent.the.global.IT.industry.for.India I.will.mention.here.some.facts

I  learned about the woman that surprised me Surprise is a very useful emotion.caused.by.things.that.are.outside.our.life.experience To.participate.in.this.meeting,.I,.an.American.living.in.India.some.12,000.miles.from.my.native.home,.had.driven.by.car.from.Bangalore.to.the.village

The.fact.that.surprised.me.most.illustrates.the.huge.contrast.between.the.woman’s.life.experience.and.mine She.had.never.been.to.Bangalore,.a.mere.40.km.away I.am.sure.it.was.as.difficult.for.her.to.comprehend.my.life.lived.12,000.miles.away.from.my.home.country.as.it.was.for.me.to.grasp.the.per-spective.of.someone.like.herself.who.had.never.traveled.the.40.km.to.the.nearest.large.city

Of.course,.when.considering.this.in.retrospect,.it.all.seems.very.obvious.and.slightly.trivial But.here.is.the.challenge Mobility.and.communication.technologies.bring.life-changing.experiences,.which.mask.perception This.is.certainly.an.extreme.case.since.I.represented.the.huge.distance.of.life.expe-rienced.in.an.international.career And.yet,.am.I.so.odd?.Certainly,.there.is.today.living.in.Bangalore.a.very.large.number.of.individuals.who.through.work.experiences.in.the.IT.industry.that.has.experienced.exactly.the.same.phenomenon It.is.interesting.to.consider.how.large.a.cultural.distance.that.mere.40.km.represents,.and.how.that.new.distance.has.been.created.by.the.unintended.consequences.of.technology Designers.working.in.the.emerging.market.setting.often.need.to.bridge.that.40.km

An Introduction to Emerging Markets 9

tance.from.myself,.now.let.us.consider.another.individual.whom.I.meet.in.Chennai, the fourth largest city in India Relatively speaking, Chennai is.a.very.old.city.with.a.long.history.of.foreign.involvement The.East.India.Company,.a.British.colonial.trading.company,.established.the.city.naming.it.Madras.more.than.350.years.ago As.a.trading.port.city.with.a.long.history.,.the people who live in Chennai are very familiar with the larger world Chennai.has.never.isolated.from.the.global.world.in.its.long.history

Having.considered.an.individual.with.a.very.large.social.economic.dis-I.met.an.individual.there.who.is.strongly.representative.of.the.new,.rapidly.growing middle class of the emerging markets He works as a landscape.engineer,.frequently.with.expatriate.clients.in.the.city His.children.attend.good.schools He.is.fluent.in.English,.the.language.of.aspiration.and.busi-ness.in.India Fortunately.for.me,.he.was.expertly.navigating.the.process.of.finding.and.renting.an.apartment.in.Chennai,.an.unfamiliar.task

Again, it is the surprising piece of information that illustrates the.challenge of understanding emerging markets The landscape engineer

in Chennai had frequently visited Bangalore and many other places in.India,.but.his.comment.to.me.was.that.he.had.never.been.on.an.airplane Airplane travel, an experience that had become so common in my life,.which I consider as suitable transportation for my weekly commute to.work, was completely outside his life experience He represents middle.class.India Of.course,.in.retrospect.again,.this.should.not.be.surprising His experience would not be that uncommon even among the middle.class.of.the.United.States Yet,.it.represents.well.the.speed.of.technological.change Air.travel.in.India.has.become.relatively.common.and.accessible.to.a.small.but.significant.percentage.of.Indians.who.live.alongside.many.people.in.the.middle.class.who.have.yet.to.experience.it Consider.the.dis-tance.that.technological.change.has.introduced.into.life.experiences.in.an.emerging.market

Finally,.having.looked.at.examples.from.a.lower.socio-economic.tier.and.a.middle.socio-economic.tier,.let.us.consider.a.different.surprise As.I.have.been establishing research labs in emerging market countries for the last.eight.years,.I.have.had.the.chance.to.hire.and.work.with.some.of.the.best.and.brightest,.the.elites.of.an.emerging.market In.a.country.like.India.or.China,.education.is.a.highly.valued.qualification,.as.it.has.been.for.many.decades.the.primary.means.of.social.and.economic.advancement In.countries.with.such.very.large.populations,.it.means.that.there.is.an.intense.competition.for.the.very.best.education For.those.of.us.from.countries.that.offer.universal.access.to.high.quality.education.and.for.which.there.are.many.other.means.of.social.and.economic.advancement,.such.intensity.is.difficult.to.imagine.In.Bangalore.there.is.one.institution.that.represents.the.apex.of.this.educa-tion,.the.Indian.Institute.of.Science This.graduate-level.institution.has.been

a centre of India’s advanced scientific community, defense industry and.information.technology We.were.excited.to.hire.a.person.from.its.faculty

When the day came for him to start work, again it was surprise that.illustrated.the.challenge This.highly.educated.research.professor.at.one.of.India’s.top.academic.institutions,.as.a.matter.of.course,.consulted.with.his.Hindu.priest.for.an.auspicious.date.and.hour.to.start.work.and.arranged.for.the.appropriate Hindu.ceremony.to.be.conducted.that.morning As.a.person.of.religious.faith.myself,.I.was.not.surprised.by.his.religious.devotion The.surprise was.the.deep.personal.involvement.of.the.religious.institution.in.a.life.event.which.for.me.was.completely.secular—determining.the.time.for.starting.a.professional,.high-tech,.research.position

This.illustrates,.at.the.deepest.level.of.one’s.worldview,.the.contrasts.in.life.experiences within and between emerging and developed markets From.the.professor’s.point.of.view.there.was.no.inconsistency.between.the.Hindu.religious.calendar.for.suitable,.auspicious.times.for.life.events.and.his.highly.accomplished.scientific.education For.me,.I.had.implicitly.assumed.that.the.secular,.pluralistic.separation.between.religion.and.science.that.dominates.the.Western.world.was.an.integral.and.inseparable.worldview.and.system.of.thought And.my.view.of.religion,.which.has.been.sanitized.by.the.rational.thought of the Renaissance and the Reformation of Christianity, was sur-prised.by.the.Indian.view.of.the.world.that.perceived.far.less.contradiction.between.scientific.thought.and.religious.piety

Designers in emerging markets face this type of strong cross-cultural.conflict between different cultural systems It is often not just the conflict.between East and West but between countries such as India and China,.between.socioeconomic.classes,.between.religious.traditions My.examples.here.have.been.drawn.from.India,.but.it.should.not.be.difficult.to.see.that.these.cross-cultural.conflicts.exist.in.all.of.the.emerging.markets.and.even.more.so.between.them

The Common Characteristic of Emerging Markets

standing,.the.effects.of.economic.change.followed.by.rapid.economic.growth.give.them.a.number.of.common.characteristics These.characteristics.provide.a.contextual.background.for.understanding.people’s.lives.in.those.countries For.the.designer these are valuable insights.that increase the.understand-ing.of.what.is.observed The.following.list.is.not.intended.to.be.complete.by.any.means.but.rather.a.starting.point.for.exploration That.exploration.is.part.of.the.challenge.for.the.designer as.he.or.she.creatively.goes.from.understanding to.the.implication.of.design

Although.these.emerging.markets.are.diverse.and.require.their.own.under-An Introduction to Emerging Markets 11

1 The.physical.infrastructure.of.these.countries.is.constantly changing Rates.of.construction.can.be.enormous At.different.times.China.has.come.close.to.spending.more.than.40%.of.its.GDP.on.infrastructure.investments, an incredible level of change These countries, as a.whole,.are.into.construction The.opportunity.for.design.contribu-tion.is.high.in.this.setting

2 Human.societies.in.these.emerging.markets.undergo.rapid.change New.professions.are.accessible.that.are.not.defined.or.constrained.by.existing.social.customs New.mobility.is.offered.to individuals

in society who previously were locked into traditional roles Individuals have more disposable income, increasing the lifestyle.choices available to them New forms of communication increase.contact.with.other.societies.and.different.ways.of.living The.oppor-tunity.for.adopting.and.experimenting.with.new.products.is.high 3 Rapid.change.means.that.each.generation.has.a.significantly.different.life.experience Expectations.and.worldviews.can.vary.significantly.from grandparents to parents to children Youth cultures become.more.dominant Generational-targeted.products.and.services.have.increased.potential

4 The general attitude toward technology in emerging markets is.positive.because.it.is.associated.with.rising.standards.of.living.and.economic growth Negative impacts of technology are frequently.ignored.or.tolerated Attempts.to.limit.technology.choice.to.prevent.negative.impact.is.not.necessarily.welcomed.or.appreciated The.per-ceived.right.to.individual.higher.standards.of.living.overrides.the.more.difficult-to-solve.societal.and.environmental.negative.impacts 5 The.vast.majority.of.users.of.technology.are.first-time,.first-generation.users They are not surrounded by a technologically supportive.milieu.that.can.be.leveraged.for.adoption This.lack.of.legacy.both.limits.and.frees.opportunity.for.design.choices The.intuition.of.the.user.that.is.based.on.implicit.knowledge.and.experience.is.different 6 The.value.propositions.and.use.models.of.technology.placed.in.new.contexts.can.be.significantly.different.from.those.of.other.contexts.in.developed markets As an example, the relative value of cell phone.communication.to.socially.restricted.individuals.such.as.those.in.a.con-servative.religious.society.can.be.significantly.higher New.forms.of.communication.can.provide.unexpected.empowerment.to.individuals 7 Lower.socio-economic.strata.and.those.at.the.BOP.have.needs.and.desires.from.all.tiers.of.the.Maslow.hierarchy Except.for.severely.marginalized.communities,.which.are.at.risk.of.survival,.needs.such

as entertainment, recreation and play are valued along with the.basic.necessities.of.life The.amount.of.disposable.income.changes.how.the.needs.are.met,.but.not.the.fundamental.needs

The characteristics identified in the foregoing list are generally true of.emerging markets and rapidly developing societies in the past as well as.the present The.following.are.some.characteristics,.which.I.will.argue.are.at.least.sharper.today.if.not.unique.to.the.current,.emerging.market.context Not.all.agree.with.this.assessment.

1 Economic.distances.within.the.markets.are.greater.now.than.in.the.previous.emerging.markets This.is.likely.to.be.true.because.of.easy.availability.and.adoption.of.the.very.latest.forms.of.technology.that.contribute to productivity The starting point of the peasant and.subsistence farmer has not changed, but the level of development.easily.attained.by.those.fully.integrated.into.the.developed.world.is.greater.and.more.quickly.achieved This.contrast.was.highlighted.in.earlier.demographic.examples

sons of quality of life and economic capability more .challenging What type of standard of living does an income of a thousand dollars.a.year.provide?.Purchasing.power.parity.and.measures.of.consumption.are.better.indicators.of.relative.well.being

2 The.interconnected.nature.of.the.globalised.world.makes.compari- 32 The.interconnected.nature.of.the.globalised.world.makes.compari-.2 The.interconnected.nature.of.the.globalised.world.makes.compari-.In2 The.interconnected.nature.of.the.globalised.world.makes.compari-.an2 The.interconnected.nature.of.the.globalised.world.makes.compari-.emerging2 The.interconnected.nature.of.the.globalised.world.makes.compari-.market,2 The.interconnected.nature.of.the.globalised.world.makes.compari-.the2 The.interconnected.nature.of.the.globalised.world.makes.compari-.adoption2 The.interconnected.nature.of.the.globalised.world.makes.compari-.of2 The.interconnected.nature.of.the.globalised.world.makes.compari-.a2 The.interconnected.nature.of.the.globalised.world.makes.compari-.free2 The.interconnected.nature.of.the.globalised.world.makes.compari-.market2 The.interconnected.nature.of.the.globalised.world.makes.compari-.capitalist2 The.interconnected.nature.of.the.globalised.world.makes.compari-.econ-omy.does.not.guarantee.the.adoption.of.other.institutions.such.as.representative.democracy.or.liberal.social.change It.is.possible.that.these.will.follow,.but.that.is.not.certain.from.today’s.vantage.point The.political.systems.of.the.BRIC.countries.vary.greatly.and.in.most.cases.with.little.indication.of.change

3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- 43 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ-.3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ-.The3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- demographics3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- of3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- emerging3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- markets3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- are3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- different3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- from3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ- those3 In.an.emerging.market,.the.adoption.of.a.free.market.capitalist.econ-.experienced.by.developed.countries.when.they.achieved.economic.growth In the case of China and India, their large populations.already.existed.at.the.time.that.growth.began The demographics.show large numbers of young people In the case of China, the.types of solutions adopted to address population size will have significant.impact.on.the.country’s.future China’s.one-child.policy

is creating a future-inverted economic dependency on a smaller.part.of.the.population

5 Innovation adoptions often leapfrogs and changes order in these.emerging markets The best example of this is the adoption of.mobile.phones.in.preference.to.landlines The.changing.technologi-cal.landscape.impacts.the.adoption.of.technology Superiorly.suited.new.technologies.can.be.as.easily.adopted.as.older.technologies.These characteristics should give the designer insight into what might be.different in emerging markets It is very likely that there are many more.characteristics.waiting.to.surprise.and.to.be.discovered

An Introduction to Emerging Markets 13

The Excitement Continues

Change.brings.opportunity The.global.world.economic.order.has.changed.rapidly with the integration and growth of emerging markets The BRIC.paper.by.Wilson.and.Purushothaman.suggests.that.this.trend.will.continue.for.the.next.40.years Within.those.emerging.markets,.change.is.the.constant.that.is.common.across.them The.virtuous.cycle.of.consumers.and.producers.has.been.expanded Newly.formed.companies.and.already.established.com-panies.are.creating.new.products.and.services.to.meet.the.needs.of.the.newly.enabled.consumers.that.are.eager.to.enjoy.new.standards.of.living Design.for.emerging.markets.is.at.the.heart.of.this.cycle.of.change

Change.brings.challenge.and.difficulty At.the.time.of.writing.this chapter,.the.world.is.just.slowly.coming.out.of.the.painful.global.financial.crisis.of.2008 On.the.surface,.that.crisis.is.about.overextended.financial.institutions.and.inflationary.price.bubbles.in.the.real.estate.sector.of.developed markets However, as it is examined over time, it is very likely that it will be seen.in.the.larger.context.of.major.global.economic.shifts At.the.very.least.the.new.interconnected.global.markets.magnified.the.effects The.exciting silver lining has been the resilience that emerging markets have shown in this crisis.and.the.new.role.they.are.playing.in.recovery

Living, working and participating in emerging markets is an exciting.opportunity.for.designers This.is.just.the.beginning.of.a.very.exciting.time.in.the.emerging.markets The.positive,.powerful.energy.of.a.very.large number.of.people.benefiting.from.economic.growth.is.palpable.on.the.streets.of.places.such.as.Bangalore,.Shanghai,.Moscow.and.Sao.Paolo

Enjoy.the.journey Explore.deeply Be.surprised

References

1 Maddison,.Angus.(2001) The World Economy—A Millenial Perspective OECD,.Paris 2 Prahalad,.C K (2006) The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits Wharton.School.Publishing,.Cambridge,.MA.

3 Sachs, J D (2005) The End of Poverty: Economic Possibilities for Our Time

Penguin.Press.

4 Wilson,.D and.R Purushottam.(October.2003) Dreaming.with.BRICs:.The.Path to.2050 Goldman.Sachs Global.Economics.Paper.No 99.