Editor’s Note: Thanks to a partnership with Dalhousie’s Rowe School of Business, this submission marks the first in a series of articles on emerging markets. Have a perspective to share on emerging markets? Email Now@SaltWire.com.
It’s been five years since the Now or Never: An Urgent Call to Action for Nova Scotians report was released. The report emphasized the dire situation and was unequivocal in telling Nova Scotians (you could lump Atlantic Canadians in here, too) that we need to innovate and evolve in how we do business.
In the years since, we have seen a push for local entrepreneurship initiatives — an example of this is the craft brewery and cidery start-ups that seem to be popping up everywhere, from rural to city-scapes–keeping people ‘buzzingly’ happy.
As technology and globalization shrink our world, there is another opportunity unfolding for Atlantic Canadian businesses––it’s emerging markets.
Over the next four months, a cohort of 12 students from Dalhousie’s Rowe School of Business will be studying the concept of an emerging market and deciding for themselves what exactly constitutes an emerging market. To really refine our opinion, we’ll even travel to an emerging market.
Through this unique course offering, students from three different programs — Corporate Residency MBA, Commerce, and Management — will collaborate with the shared goal of unfolding the potential of doing business in an emerging market and consulting with local businesses to expose opportunities for expansion.
For the next four months, teams of three will publish a monthly article in Now Atlantic to keep readers up to date on our findings and observations.
So, what’s an emerging market?
There is no agreed upon definition of an “emerging market” — which is debated heavily by academics, leading to much confusion and disagreement around the topic. For instance, there is disagreement within the academic dialogue in relation to the classification of China as a developed or emerging market. These long debates beg the question: what qualities define an emerging market? The emerging market designation is given to economies with characteristics of more developed markets; however, these markets are usually underdeveloped and growing in nature. An emerging market could have been viewed as a developed market in the past or can already be transforming into a more developed market. This latter point is where some of the grey area of the emerging market debate comes from.
Shifting demands, growing interest in global business
Emerging markets around the world are attracting companies of all sizes. Organizations increasingly rely on outsourcing production and sourcing raw materials within these types of economies to benefit from commercial advantages.
With more than half of global economic growth driven by emerging markets, this shows how businesses are continuing to explore this option. Countries like India, China, and Indonesia are examples of markets with shifting demands and growing interest in international products and services. However, the term “emerging markets” is thrown around a lot and at times is considered just a buzzword.
A deeper dive finds Atlantic Canadian opportunity
Before fully understanding the emerging markets label, we need to go deeper. These growing international markets are good news for Atlantic Canadian industries, especially as we become more active on the international stage. Nova Scotia is known for its small businesses — imagine the opportunities within the global community to become a major player, and not just in Canada.
Nova Scotian industries such as fisheries (cod, lobster, crab, tuna, oysters), ocean technology (ventures coming out of COVE and in Creative Destruction Lab-Atlantic), and frozen fruits and nuts (blueberries, apples) are already well-known on the international stage in developed countries. Businesses within these specified industries can take advantage of the growth potential in these somewhat untapped emerging markets to grow its operations. As per the Food and Agriculture Organization of the United Nations (FAO) in an article titled GLOBEFISH - Analysis and Information on World Fish Trade, there are changing dynamics in the lobster trading patterns between America and China due to the recent trade war.
According to the FAO, the ensuing 25 per cent tariff on American lobster due to this trade war has created a market opportunity for Atlantic Canadian lobster fisherman. Juxtaposing the expected growth of lobster demand in China (due to lobster consumption increasing within the Chinese diet) with this void in the Chinese market creates an incredibly lucrative opportunity for Atlantic Canada fisherman.
These prominent industries in Atlantic Canada are attracting more demand in markets across the globe not only due to changes in tastes, but also due to growing awareness for health and sustainability.
A trend that’s here to stay
People around the world are more educated around topics such as the environment and renewable energy, the importance of sustainable agriculture, and personal health.
This expansion of education and knowledge across the world aligns with the many Atlantic Canadian organizations within the nutrition and green technology categories.
Asia is an example of somewhere starting to realize the value of putting the right foods in your body and its importance on long-term health. With more education and awareness around products with high sugar content such as soft drinks, or the health benefits of wild-caught seafood and crustaceans, people around the world are realizing the benefit of changing diets.
This health-conscious wave is a trend that Atlantic Canadian organizations are starting to take advantage of to expand operations. With these lifestyle changes occurring in Asia, and with a population of approximately 4.6 billion people right now, the opportunity for local companies to move into this space and acquiring a portion of the market share has the potential to be incredibly lucrative.
Business challenges and what to do
Despite the financial advantages and increasing market demand in emerging markets, conducting business in these economies comes with increased inherent risks.
It is imperative leaders exploring business in these economies generate policies and safeguards around risks associated to exchange rates, intellectual property, language barriers, and political instability. Organizations can mitigate some of these risks associated with conducting business internationally by understanding consumer behaviours in the target location and gaining cross-cultural knowledge.
By understanding the market in which an organization is entering, the business can learn whether there is a potential product market fit between the product and consumers in the target country. If there is no product-market fit, then these risks are easily avoidable.
Performing a market and industry analysis for our business partners will be part of our project to ultimately determine the feasibility of expanding an Atlantic Canadian business internationally.
As Forest Gump said, life is like a box of chocolates, you never know what you’re going to get... so as Atlantic Canadians there is much for us to explore in global opportunities. We never know what’s out there until we step forward and take a bite into the possibilities of emerging markets — it could be sweet!