Julian Lighton Talks about the Role of Cisco and Technology in the World's Emerging Markets

April 27, 2009

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Julian Lighton, Cisco Vice President of Strategy and Business Development for Emerging Markets

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Julian Lighton on the Cisco Strategy for Emerging Markets and the Trends other Regions Should Note

Right now is not a bad time to be a developing country.

While significant problems persist in many of the less-developed nations of the world, it is also the case that an increasing number are moving onto the world stage with rapid economic growth rates, impressive infrastructure build-outs and a thirst for public and private-sector innovation.

Often as not, technology is playing a major part in the transformation of these countries. In recognition of this fact, back in 2005 Cisco® created a whole new theater of operations—"Emerging Markets"—to serve the needs of the world's most-rapidly developing economies.

The theater covers Central Europe, Eastern Europe, Latin America, the Middle East, Africa and Russia and the Commonwealth of Independent States, all of which counts for two-thirds of the world's territory, 23 time zones, 21 official languages and more than 130 countries.

Clearly, such a large grouping of nations encompasses a significant amount of diversity, but there are also many common features among the countries across the theater.

To find out what these features are, and how technology in general and Cisco in particular can take advantage of them to help with country transformation, News@Cisco spoke to Julian Lighton, Cisco's Vice President of Strategy and Business Development for Emerging Markets.

What are the most important market transitions currently underway in Emerging Markets, and how should corporations and governments prepare for them?

Julian Lighton: There are really three major market transitions in Emerging Markets that have been happening for a number of years and that policy makers and the private sector need to be aware of.

The first is urbanization.

This has been taking place for 30 to 40 years in many countries, but the pace has increased in the last five years or so in most of our markets; 20 years ago, 70 percent of people lived outside of cities, but now that proportion has reversed—70 percent of people live in metropolitan areas.

For us and our customers, that means a massive concentration of gross domestic product (GDP) and information and communications technology (ICT) spend.

In the almost 130 countries across Emerging Markets, there are some 200 cities which account for around 50 percent of all GDP, 30 percent of the population and 75 percent of ICT spend.

The second transition is ICT infrastructure building.

If you take a city such as São Paulo, scarcely 29 percent of the population is covered by copper wire. For the rest, ICT connectivity has to be provided through other services, whether wireless or mobile.

Finally, there is the definition and delivery of value to citizens over that ICT infrastructure.

Whereas service providers have traditionally been used to providing simple services such as dial tones, consumers and businesses in emerging markets no longer want to pay for access, but rather want to pay for valuable services delivered over that access, and increasingly not on a monthly basis but on a usage basis.

How can technology help emerging markets to become more competitive?

Julian Lighton: I believe technology in itself is not a differentiator, it is an enabler. It has provided an enormous boost to productivity and creativity in developed countries and now that is happening in Emerging Markets, too.

Technology allows people to solve productivity issues and in doing that it frees up more time to deliver value. What we are seeing is that because emerging economies have never had this possibility before, they are looking at it with a fresh set of eyes.

In Emerging Markets we see an incredibly aggressive embracing of new technology and a willingness to use it to leapfrog generations of developed world solutions; however, there is also an enormous skills gap, so the types of technology that are most readily being adopted are either easy to deploy or service delivery-based.

That makes a big difference for producers and designers of technology because it tells you that the majority of people in a generation's time will want to buy things in a different way.

Which Emerging Market regions or countries does Cisco see the greatest growth potential in right now?

Julian Lighton: The American author and columnist Thomas L. Freidman says the world has been made flat by technology, but I think it has been made lumpy. In Emerging Markets, you have a clear difference between nations which are early adopters and those which are laggards.

Some of the real leading-edge countries include Qatar, Chile, Dubai and Poland.

On the laggard side there are those that are held back because service providers are owned by government, or where markets do not have much money to support innovation, such as sub-Saharan Africa, Brazil, Turkey and potentially South Africa.

Interestingly the technologies being embraced fastest across the board are video and mobility.

You have to have mobility because of a lack of wire-line infrastructure in most areas. And video is important because people do not want to deal with keyboards for work when they are used to dealing with each other face-to-face.