strategy+business Winter 2013 : Page 71

B E S T B U S I N E S S B O O K S 2 0 13 / G L O B A L I Z AT I O N governments to solve. In Egypt, RecycloBekia has de-veloped a successful business around the recycling of computer components, which the company plans to in-troduce throughout the Middle East. But it’s the global players that should be of most interest to established MNCs trying to understand the fast-changing competitive lineup. In the healthcare arena, for example, Lebanon’s Cardio Diagnostics has designed a lightweight device with heart-monitoring sensors that regularly send signals to a dedicated moni-toring center. In contrast to the cumbersome, wired de-vices that are usually used for one or two days in the United States, Cardio Diagnostics’ devices are used for six weeks or more, and they offer improved monitoring via intelligent algorithms. Schroeder thinks that we will see Middle East startups offering similarly innovative solutions that could be scaled throughout the region and beyond in at least three other areas: mobile communications, on the basis of the nearly 100 percent mobile penetration We are seeing hotbeds of entrepre-neurial activity in emerging economies, where the great global competitors of the future are being incubated. and rapid adoption of smartphones in the region; solar-powered electricity, which, for example, could be used to cost-effectively tap into the world’s largest untapped body of fresh water, which lies beneath the Egyptian– Libyan desert; and social networking, through these en-trepreneurs’ intimate knowledge of their local markets and the consumer-facing platforms that would work best in the region. Unlike the authors of the other best business books on globalization, Schroeder makes little attempt to pro-vide a diagnostic framework to explain what he sees on the ground. Instead, he provides a highly engaging ac-count of his encounters with one Middle East entrepre-neur after another, and, in doing so, is convincing in his argument that we should not overlook the entrepre-neurial spirit of the Middle East, and other emerging economies, as we try to anticipate where the competi-tive thrusts of tomorrow may originate. The effect of these new competitors—from large enterprises pursuing global brand breakouts to the rough diamonds to the startups—on established MNCs from developed markets will no doubt be profound. The incumbents will have to not only develop new markets for their products and services in emerging economies, but also simultaneously defend their global leadership positions against increasingly formidable competitors. Further, they’ll have to do so in a vastly more complex political and business environment, as, contrary to the conventional wisdom, economic convergence will not necessarily lead to cultural or political convergence, any more than the “death of distance” means that the world has suddenly become flat. Most MNCs have only just begun to develop the organizational capabilities they’ll need to meet this chal-lenge. For example, merely a handful have shifted sig-nificant innovation resources to one or more emerging markets to acquire the frugal engineering capabilities required for developing the low-cost products demand-ed by local customers. Fewer still have mastered manag-ing their emerging market distribution channels, part-nering with local players, and successfully navigating the often treacherous politi-cal waters of emerging mar-kets. Most importantly, few MNCs have developed truly global mind-sets, mainly because the leadership ranks of most of them continue to be dominated by execu-tives from their home countries, with all the predictable global blind spots and misunderstandings this entails. But as this year’s best business books on globalization vividly illustrate, they will soon be dealing with a flood of new competitors—ready or not. + John Jullens john.jullens@booz.com is a partner with Booz & Company based in Shanghai. He co-leads the firm’s engineered products and services prac-tice in Greater China. He blogs at strategy-business.com/ John-Jullens and at www.johnjullens.com. best books 2013 globalization 71

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