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4 Opportunities of Working in Frontier Markets

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Frontier markets are fascinating places to operate in. They offer tremendous gains but of course come with equivalent risks. Last week I highlighted the Risks of Operating in Frontier Markets, specifically:

  • Lack of Governance
  • Inadequate and Emerging Infrastructure
  • Resource Availability and Capability
  • Living in Fear

And also the key characteristics which define them including:

  • Large populations
  • Favorable demographics with a relatively young average age
  • A fast growing middle class
  • A lower but much faster growing GDP than traditional emerging markets

So are the risks worth it? Having been around in frontier market for the past 17 years I answer this question with a resounding YES. Here are my 4 reasons for why I have stuck around, made Asia my home and lived through bomb blasts, floods, unforgettable parties and tremendous change.

  • Growth – This is the electric current that drives everything in frontier markets. Anything you touch has the potential to turn into the next big thing. Everybody is looking for betterment: for themselves, their families and their companies. There’s a palpable excitement and energy in the air. China is the best example of this. I was there between ’97 and ’99 when its growth was still in the acceleration phase. I remember that at the time, 80% of all high rise cranes in the world were in China – now that’s growth. It was all about how to grow, make it bigger and better. Discussions were not how you could get 10 or even 20% return on your investments. People wouldn’t even consider an investment unless they could profit with more than 40%.  Everything was about growth and improvement – it had a buzz and energy that can’t be replicated.

Although not a frontier market anymore, the satellite picture below shows the change in Dubai between 2000 and 2010. There’s no developed market which could imaging growth like this.

Dubai - Satellite Image
Dubai – Satellite Image, 2000 vs 2010

  • Forward Looking As everything moves forward in overdrive people don’t have time to look back over their shoulders and reminisce about the past. I loved Vietnam for that. Work and life in the early 2000’s was electric and the Vietnamese despite all their suffering at the hand of the American’s during the American War (as they call it in Vietnam) never held a grudge against the Americans or any westerners for that matter. They just focused on what the future would bring, were keenly interested in learning, developing and readying themselves for it. And look at where they are now – in twenty years (since the early Doi Moi years) they have become one of the feared Asian Tigers.
  • Everything Is Possible Every year I go home I’m so happy that I don’t have to work there. The standard answer I get on my questions on whether something can be done is given verbatim from a Standard Operating Procedure Manual and normally involves 3 weeks of waiting, a significant outlay of money and/or a variation on the answer ‘sorry but that is not possible’. On the other hand, in frontier markets everything is possible and things get done in a relatively short amount of time. I have organised employee events where conference halls were transformed into Gladiator inspired Arena’s or F1 copied race tracks for 1600 people within a matter of 2 weeks. Turn around times are within hours and you can meet any senior executive or government official, with the right introduction of course, within days.
  • Make an Impact Due to its phase of development a frontier market by definition is a place where small actions can have huge impacts.  People regularly raise a relatively low amount of money whether it be rupee, dong or shilling and support a whole school for $15,000 / year. Abdul Satter Edhi, a Pakistani philanthropist, now leads the worlds largest voluntary ambulance service with 1800 vehicles from a 2-bedroom apartment. You don’t have to look far in frontier markets to make an impact –  teach people, build infrastructure, provide health care services, provide clean water or build an active social society. Again everything is possible.

I know that many people will disagree that anything is possible in frontier markets but with the right connections, imagination, flexibility and charm I positively believe it is. Next week I’m going  to discuss how to be a successful leader in frontier markets.

I’ve been working in frontier markets for the opportunities and have seen the risks as a normal but exciting consequence of operating here. What is your reason?

Photo Credit: h.koppdelaney via Compfight cc

Author: Paul Keijzer

Paul Keijzer is an innovative business leader and HR professional with more than 40 years of experience. He is the CEO of The Talent Games & Engage Consulting, a sough-after speaker and renowned name in the HR technology space. Been an official member of the Forbes Business Council 2020 and still contributes his thought leadership insights on various online platforms.

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