Why emerging markets are winning the cyberspace race

In his State of the Union address on Tuesday, President Obama called America a nation of Facebook and Google, citing that, when it came to sparking the creativity and imagination, Americans do it better than anyone else.

However, Obama, an avid enthusiast of leveraging social media on a political platform, may have his optimism level set a bit too high this time. To quote Obama:

“Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.”

President Obama’s address, while strongly emphasizing economic growth and job creation, also hinted at the need to dominate the enormously complex sphere of influence that encapsulates millions of lives through data streams, social networking and mobile markets. “This is our generation’s Sputnik moment,” he further says, a quote that received thousands of references on Twitter.

Yet, without raining meteors on anyone’s parade, America may find itself taking small steps where other giants have already been bounding and leaping, despite the level of enthusiasm from Obama.

I am of course referring to the convergence of emerging markets into the technology cybersphere (Note: I say cybersphere mainly because it encapsulates the entirety of the information age including the mobile, social and digital paradigms as opposed to the convoluted and often misinterpreted internet).

Emerging markets, the BRIC countries as well as Indonesia, South Africa, Mexico, Taiwan and more, while still heavily influenced by the dominant American brands, have exponentially tilted the cyber growth scale in their favour. These countries dominate in every online sector imaginable including consumer, mobile, social, media and gaming.

One has only to look at the top five brand statistics coming off one these countries to note how the mobile influence completely overshadows their American and European counterparts. A BSG press report which analyzes the total shareholder return of countries in a five year period from 2005-2009 provides some further insight: Of the 126 countries analyzed, 81 are based in emerging economies – 64% of the total. The report further estimates over 1.2 billion internet users within the BRIC sector by the year 2015.

Internet statistics highlight the percentage of internet users within emerging markets with Asia, Africa, South America and the Middle East showing a staggering growth within a short period of time despite unfavourable regional and political climates and social drawbacks which have limited the penetration and accessibility to online mediums.

Observe the corporations that provide the backbone for these markets and you will find that they have adjusted with the times, being influenced as well as influential. Take China and India for example, where the majority of cyberactivity occurs via mobile devices, companies such as Zynga and BuzzCity‘s mobile gaming development far exceeds the console gaming sector.

The same can be said of online messaging and social media with Tencent’s QQ in China, Google’s Orkut in Brazil and India, Odnoklassniki and VKontakte in Russia and of course Facebook and Twitter across all of them.

In terms of web advertising, it is estimated that China will become the third largest ad market behind the U.S. and Japan this year, displacing Germany.

The statistics around the emerging markets convergence are not simply impressive eye candy for marketers and investors. They also serve to indicate the shift in economic focus and trends across the world, exemplifying the current digital sphere and its predicted global growth. In summary, as we move into the age of wireless, 3G and 4G connectivity, it makes perfect sense that most of our internet growth will continue to be from emerging economies.

It is an irrefutable fact the cybersphere has evolved and grown within emerging markets and will continue to do so. America may be a nation of Facebook and Google and may have influence across the globe but in the great race for the online cyber landscapes, they are one step behind.

This time around, Sputnik, not Apollo, won.



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