This document discusses two defining trends for the next economic era: the acceleration of multi-polar globalization and the transformative potential of newly mature information technologies. It summarizes that economic power is increasingly diffused across more countries and regions, with emerging markets accounting for over half of global output. It also discusses how information technologies like cloud computing are enabling new forms of business models and market-making forces. The document advocates that companies must move beyond global connectedness to proactively orchestrate opportunities from these new trends through strategies like gaining deeper customer insights and developing wide networks.

1. From global connection
to global orchestration
Future business models for high performance
where technology and the multi-polar world meet

2. Contents
Foreword ................................................................... 1
Executive summary................................................ 2
Methodology............................................................ 5
The multi-polar world ........................................... 6
After the storm:
Two defining trends of the next era ................. 8
The new market-making forces ......................... 12
Mastering orchestration ....................................... 17
Implications for government .............................. 22
Last word .................................................................. 24
Case studies ............................................................. 25
Sources ...................................................................... 30

3. Foreword Ten years ago, the world entered a
period in which globalization would
come of age. It was to be an evolution
the new market-making forces at
work. For companies and markets,
the implications of these forces, even
in both substance and form. The in embryonic form, are profound.
rise of emerging markets planted
new economic flags, diffusing and Organizations have a great
rebalancing economic power across opportunity to harness these forces
ever more countries and regions. to their advantage to optimize, extend
At the same time, globalization or even transform their business
morphed from being a chiefly one- models. Locating and orchestrating
way phenomenon—with exports and the right global connections outside
labor flowing from East to West— the organization become, perhaps
into an indisputably multidirectional paradoxically, the key to achieving an
and interdependent contest for ever closer focus on the competitive
consumers, resources, capital, talent essence of the business. Excellence
and innovation. The economic map in networks, relationships and data-
became truly multi-polar, the world driven insight will be required. Some
larger in geographic scope yet smaller of the necessary responses may seem
in economic distance. counterintuitive. Throwing open
Mark Foster the doors of the company will not
The past two years, though, will be come naturally. Broadening the field
Group Chief Executive remembered less for trends than for of dialogue takes time and effort;
events. The attention of business customer insight requires work. Yet
Global Markets and
and political leaders everywhere was these investments will help define
Management Consulting rightly absorbed by combating the competitive advantage for the future.
worst effects of the financial crisis
and economic downturn. Now, as Accenture’s multi-polar world research
the dust thrown up by the global program was launched in 2006 to
downturn begins to settle, business help companies and public-sector
leaders and policymakers are starting organizations striving to achieve
to focus once more on the longer- high performance respond to the
term influences shaping tomorrow’s changes in the world’s economies.
economy. The advent of a new decade Our aspiration for this report, the
is a natural time to take stock of fourth in the series, is that it will
the interplay of the forces in global spur organizations to move beyond
economics and their implications for straightforward connectedness toward
business and government. an effective global orchestration of
powerful new economic possibilities
Two trends that feature prominently that increasingly lie beyond the
in my conversations with business traditional frontiers of the enterprise
and government leaders are and fully harness the potential of
the acceleration of multi-polar pervasive new technology waves.
globalization and the transformative
potential of newly mature information
technologies—including cloud, mobile
and collaborative computing. These
two trends have not only continued
apace during the downturn, but have
drawn added strength and speed from
it, spurred by the intensifying quest for Mark Foster
efficiency, competitiveness and new
Group Chief Executive
customers across the world.
Global Markets and
Less well known is how IT and the Management Consulting
multi-polar world are also enabling
individuals and enterprises to connect
and communicate in order to create
value in new and different ways. Our
research has sought to look beyond
the daily headlines about social
networking, blogging and crowd-
sourcing to reveal and understand
1

4. Executive summary
After the storm: two of emerging-market companies in the By reducing barriers—such as access
Fortune Global 500—a leading ranking to markets, upfront investment,
defining trends for the of the world’s largest companies—has and economies of scale—IT and the
next era risen from 20 in 1995 to 91 in 2009. multi-polar world are intensifying
competition. New entrants from
As the world emerges from a period At the same time, a number of emerging markets, free of legacy
of economic torpor, attention is information technologies are maturing. systems and processes, can access
refocusing on two long-term trends The levels of access, cost, standards, pay-per-use business infrastructure.
whose continued rise has been openness, reliability and ease of use Niche players anywhere in the world
obscured by the recent turmoil: of both hardware and communication can build competitive cost bases
the changing shape of globalization capabilities have developed to the and cut new paths to market. New
and the maturing of information point at which software can be readily consumers, better connected and
technology (IT). used to combine them to newly better informed than ever, are entering
powerful effect in business and social the global marketplace.
The rise of a multi-polar world
settings. The coming together of cloud
economy—in which economic power
services, collaborative computing,
and activity are increasingly diffused
mobile communications and other
across geographic borders—continues
technologies creates new options for
apace. The recovery now under
businesses in all regions. In particular,
way is demonstrating the resilience
in responding to and reinforcing
of emerging markets. Developing
growth in emerging markets, IT adds
economies already account for more
weight to the shift toward economic
than half of world output. They
multi-polarity.
have not only weathered the crisis
better than developed economies,
but they are also helping to power
the global recovery, generating the
bulk of expected growth in the global
economy in 2010. The confident rise of
emerging economies is mirrored in the
corporate arena. Indeed, the number
2

5. Six new market-making • New businesses that use IT • Technology is unleashing consumer-
to build new bridges between to-consumer content as like-minded
forces producers and customers are individuals share information and
Yet it is not simply a story of emerging. From rural banking to opinion about products and services—
competition becoming more intense: collaborative apps platforms, these often in an open and global forum
competition itself is changing. The intermediary players are harnessing where the objective is not profit,
intertwining of IT and the multi-polar new technology to make markets but an increase in the knowledge or
world has made a number of new in places where geographic or economic welfare of participants.
economic relationships possible for the economic distance had previously Shifting market power away from
first time. This sets the stage for doing held supply and demand apart. producers toward consumers, this
business in completely new ways—not force has implications for reputation,
• Changes in the capability, reach
by simply connecting across the multi- quality, the meaning of brand and,
and cost of IT are enabling new forms
polar world but by orchestrating the where content can be digitized, for the
of business-to-business commerce.
six new market-making forces that survival of entire industries.
Thanks to cloud computing and the
Accenture's research identified: myriad business models it and other • IT is allowing consumers to
• Co-production between companies technologies make possible, even participate in peer-to-peer markets
and their customers or suppliers is for niche providers, companies have for the cooperative production of
blurring traditional boundaries within greater access—fast, across borders, goods and services in tandem with
industry value chains. Innovation and and often at variable cost—to efficient other consumers. Often driven by a
product design are two areas in which and industrialized functions to support desire to unlock new efficiency or
enterprises are using new technologies a more focused core. effectiveness in a product or service,
to tap into the collaborative input peer-to-peer players can quickly
of a growing number of stakeholders open up new market space while also
around the world. reducing the power of alternative
providers. For example, international
peer-to-peer microfinance platforms
are challenging assumptions about
lending to small entrepreneurs in high-
growth economies.
3

6. • Individuals are collaborating Optimization: Achieving operational Second, they develop deep and
electronically to engage in cooperative excellence in current business wide networks with consumers,
consumption. Social computing can activities. New information entrepreneurs and other businesses.
make it easy for consumers to signal and collaboration tools can By opening themselves up to the
their group buying intentions—and also enhance the quality of products ecosystem, high-performance
to increase that collective bargaining and services, improve customer businesses will draw strength beyond
power by advertising the offer and service and reduce costs. the sum of their parts. By connecting
enlarging the cluster of committed to consumers through social
Extension: Developing current
customers. This “team buying” alters computing and advanced analytics,
business in new areas. Companies
the dynamics of discounting and of they will undertake an open dialogue
can harness new technologies
product tailoring. that directs product and service
to extend existing business
enhancement while building loyalty. By
These new market-making forces, models into additional, or
opening up to external entrepreneurs
and the full range of IT developments completely new, industries.
and businesses, they can co-opt the
they draw on, have big implications. Transformation: Growing new experience and capabilities of others
Businesses will have to operate in a business in new areas. Companies can to develop new, innovative solutions
much more complex ecosystem, where deploy IT to build new business models at low cost. And by divesting some
customers, suppliers, competitors for entry into previously unreachable— in-house functions to external service
and other producers are increasingly or even unimagined—markets. providers, such as cloud owners and
interconnected and interdependent. horizontal service providers, they can
The new forces heighten a number The instruments of increase efficiency and reduce costs.
of business challenges, including
the management of networks of orchestration
third parties, competition from new Orchestrating market-making forces
market entrants, and the protection of is a complex undertaking. It requires
proprietary information and data. They an understanding of how these forces
also present significant opportunities are spawning new business models.
that were not previously available, For the majority of businesses, the
including working more efficiently, question will be: where to start?
collaborating in new ways with Our research has identified two
business partners, and reaching new hallmarks of success that will be
markets or customer groups. increasingly important to underpinning
a company’s competitive performance.
In the government sphere, too, the Understanding these practices offers a
market-making forces offer an guide to businesses seeking to emulate
opportunity to improve public-service and excel against the competition.
value and policy effectiveness, as well
as the prospect of innovative solutions First, they actively seek greater
to social challenges—ranging from insight. Tomorrow’s high-performance
energy usage to security—within and businesses will exhibit unusually high
across national borders. levels of business intelligence, putting
in place infrastructure with which they
Mastering orchestration can constantly amass and analyze
data to glean valuable insight. Their
Strikingly, only 11 percent of business
leaders will regularly communicate
leaders we surveyed believe that
the importance of round-the-clock
their companies are significantly
alertness, displaying advanced
advanced in their strategic response
levels of awareness themselves
to the disruptive business environment
and gearing their organizations’
brought about by the intersection
talent-development programs
of the multi-polar world and
accordingly. In an age when open-
developments in IT. For businesses
source information services have
looking to harness the changed
made everyone an "expert," there is
ecosystem to their advantage, the
enormous potential for competitive
imperative is to move beyond global
advantage by employing advanced
connectedness toward a more
tools for capturing data and analyzing
proactive, continuously managed
it to produce rich, timely, actionable
global orchestration of the new
insights. A passion for data-driven
market-making forces that are now
continuous improvement will become
available. A number of businesses,
a fundamental tenet of a high-
both traditional and new, are already
performance organization’s culture.
doing so to unlock core business
improvement in three areas:
4

7. Methodology
This report is based on two major The 420 survey participants are all The respondents’ companies represent
strands of research. First, we analyzed senior business leaders. Close to one- a wide range of annual revenues,
the interaction between information third (32 percent) are chief executives, from less than US$50 million
technologies and globalization, drawing presidents or managing directors; (32 percent of respondents) to
on a range of secondary data sources, 30 percent are other C-level more than US$10 billion (18 percent
our extensive experience working executives; and 30 percent are senior of respondents). More than half of
with clients in each of these areas vice presidents, vice presidents the respondents (54 percent) work
and the groundbreaking work of the or directors. Respondents are for companies that have been in
Accenture Technology Labs. Second, distributed across 30 industry business for more than 20 years.
we commissioned the Economist sectors, including financial services,
Intelligence Unit (EIU) to conduct a electronics, high technology,
survey to identify how companies consumer goods, professional
are evaluating and responding services, chemicals, energy, utilities,
to developments in information telecommunications, automotive,
technology and globalization. retail, and media & entertainment.
The fieldwork for the EIU survey was Thirty-one percent of respondents are
conducted in October and November from companies primarily based in the
2009. The survey asked respondents Asia-Pacific region: 30 percent are
which global developments and IT- from North America; and 26 percent
related trends would have the greatest are from Western Europe. Other
impact on the business environment, respondents come from the Middle
which IT-related opportunities and East, Africa, Latin America and Eastern
threats their companies faced and Europe. Approximately one-third of
what strategies they were planning companies have physical operations
to implement in response to those in more than 20 countries, while 18
opportunities and threats. percent have physical operations only
in their home markets.
5

8. The multi-polar world
Accenture uses the term “multi-polar world—new consumers, talent, Talent
world” to describe the diffusion innovation, resource sustainability, While many Western economies
of global economic power across and capital—that multinational are grappling with the effects of
a widening range of regions and businesses can harness for short-term contracting workforces and shortages
countries, with that diffusion flexibility and long-term growth. of specialized skills, emerging-
accelerated by information technology, These dimensions, which span market workforces are set to expand
greater economic openness, and emerging and developed economies, dramatically. In the decade to 2020,
the growing size and reach of constitute the arena in which the working-age population of
multinational companies. companies now need to compete. emerging economies is expected to
increase by more than 500 million,
While many of the new poles of New consumers compared with an increase of only
economic activity are in the “Big 6” Many emerging markets continue 3.7 million in developed economies.1
emerging economies—Brazil, China, to enjoy impressive growth in
India, Mexico, Russia and South consumer spending, bolstered by Innovation
Korea—increasingly they include long-term fundamentals such as Innovation is no longer the exclusive
next-wave locations such as Egypt, population growth, rising incomes province of developed markets.
Nigeria and Turkey. Together with the and an emerging middle class of A combination of investment,
more-established centers of economic consumers who aspire to developed- education and a strategic policy
activity, these rapidly emerging world standards of living. IT offers focus on new technologies has
economies are radically reshaping businesses new ways to reach and spurred the development of new
the economic geography in which serve these emerging customers clusters of innovation in emerging
businesses must operate. and to craft innovative business economies. Witness the rise of
models that uncover otherwise nanotechnologies and biotech in
Accenture first explored the latent pools of demand. Beijing, digital media and genomics
characteristics and drivers of in Seoul, biofuels in Brazil and
this new phase of globalization automotive technologies in Poland.
in its 2007 study, The Rise of the
Multi-Polar World. In that study
Accenture identified five increasingly
competitive and interdependent
dimensions to the multi-polar
6

9. Resource sustainability The canvas of the multi-polar world and consistently different ways. In
Because of global commodity also features a large and increasingly particular, the findings showed that
markets and optimized supply chains, diverse cast of public and private companies need to:
companies feel the effects of volatility players operating alongside and
Create geographic options—
in prices or supply movements more competing with traditional, developed-
proactively and continually look
quickly than ever. At the same time, market multinationals. Chief among
outward to sense their environment
they face the prospect of a world with these are the emerging-market
and make focused choices about where
dwindling fossil-fuel resources—and multinationals, which have become
to compete and whom to engage.
increasing obligations to preserve increasingly prominent as they
natural resources. The challenge is expand their international activities. Be authentically local—embed
to find the right balance of supply These companies were the subject of themselves with full commitment in
security, price stability, efficiency Accenture’s second multi-polar world their chosen markets, weaving their
gains and environmental sustainability. study, in 2008, titled The Rise of the operations into the fabric of local
Emerging-Market Multinational. business and society.
Capital
In the third multi-polar world study, Network the organization—create
Pools of capital are increasingly visible
in 2009, titled Strategies for achieving organizations that are permeable, both
in the emerging world—not only in
high performance in a multi-polar internally and externally, enabling
nascent capital markets but also
world: Global choices for global flows of ideas, people and industry
via new players such as emerging-
challenges, Accenture studied how leading practices to the right places at
market multinationals and sovereign
high-performance businesses had the right time.
wealth funds. With approximately
US$3.9 trillion in assets under been evolving their strategies in
management in 2008, sovereign response to the multi-polar world.
wealth funds—state-backed entities The research found that high-
that invest surplus foreign reserves performance businesses conceive of
overseas—dwarf private equity and and execute their strategies in new
could reach US$8 trillion by 2015,
according to some estimates.2
7

10. After the storm:
Two defining trends of the next era
When the dust created by the The shift to a multi-polar • Emerging markets are expected to
recession has settled, it may not be generate the bulk of the growth in the
an exaggeration to view multi-polar world is accelerating world economy in 2010;4
globalization and new information For some time now, businesses have • Emerging markets attract a larger
technology developments as the two found themselves operating in a share of foreign direct investment
defining trends of the era ahead. world where economic power and than developed markets, and drive
Powerful individually, each augments possibility are increasingly diffused an increasing share of outward
and enhances the other. Their interplay across geographic borders, especially investment flows;5 and
is setting the stage for substantial to emerging markets—a process that
changes in how businesses see and Accenture terms the rise of the multi- • The six largest emerging economies
interact with the world around polar world (see “The multi-polar (the “B6”)—Brazil, China, India, Mexico,
them—in how they orchestrate their world”). In the depths of the downturn, Russia and South Korea—are on a path
interactions with other entities rather it was easy to wonder whether this to grow by 5.1 percent in 2010.6
than simply connecting with them. shift to emerging markets had stalled.
Levels of risk aversion rose sharply and This rebalancing of economic activity
Among business leaders worldwide, investors and businesses withdrew features not only the B6; it is evident
there is a palpable sense that capital, often to shore up core also in the next wave of emerging
significant change is afoot. Forty-one businesses at home. But the nascent economies, among them Indonesia,
percent of executives believe new recovery is now demonstrating the Malaysia, Nigeria, Thailand and Turkey.
players from emerging markets to be resilience of emerging markets. Much of this growth results from
one of the two developments that Developing economies have not only emerging-market businesses that have
will have the most impact on business weathered the crisis better than continued their onward march amid
over the next five years, according to developed economies, but they are also global recession. Indeed, the number
Accenture’s survey; 35 percent pointed helping to power the global recovery: of emerging-market companies in the
to new technology capabilities Fortune Global 500—a leading ranking
(see Figure 1). • In 2009, for the first time, emerging of the world’s largest companies—has
markets accounted for half of the more than quadrupled in less than
global economy;3 15 years, from 20 in 1995 to 91
in 2009.7
8

11. Figure 1: Trends in emerging markets and new information technologies are the most-
cited developments impacting businesses over the next five years
In your view, which two of the following developments will have the most significant impact on
your business over the next five years? (Select two)
Growth in size and reach of new players from 41%
emerging markets
Increase in the capabilities of new information 35%
technologies
Slower economic growth in developed markets 27%
Emergence of a changed corporate finance
24%
landscape
Greater involvement of government in 23%
markets/business
Greater access to customers globally 20%
Greater access to inputs (resources, talent, ideas)
12%
from international markets
Climate change and the policy/regulatory 12%
responses to it
Rising security threats 5%
Emerging-market companies have While the multi-polar world increases Software has been the essential
tended to fare well during the the scale of the business landscape catalyst in this revolution. It has
recession, partly owing to strong local and introduces new competitors, brought together hardware and
growth but also to highly competitive developments in IT are creating new connective infrastructure to apply
cost structures and a long history of connections and new possibilities technologies to real-world problems,
serving customers at low (or multiple) for businesses to achieve high needs and wants—both in business
price points. For example, Indian performance around the globe. and social spheres. Businesses
conglomerate Godrej has created are now increasingly using a wide
a new type of refrigerator priced The continuing IT revolution variety of newer technologies
between US$65 and US$75; using to meet their objectives. These
solid-state technology instead of a While the attention of policymakers range from pure hardware such
compressor, the unit is lightweight and business leaders has been focused as cloud-based servers or remote
and can cool 30 liters of food.8 on the biggest economic upheaval of sensors, and communications
Similarly, China’s Zhongxing Medical the past 50 years, the rapid march of technologies such as mobile and
has transformed the domestic information technologies has gone broadband, to complex software-
radiography market in the past largely unnoticed. During this time, driven technologies such as social
decade by creating a technology that information technologies have reached computing and advanced analytics.
renders X-ray images in digital form, new levels of maturation in terms of
bypassing the traditional lengthy access, cost, openness, standards, Yet IT can be only as relevant as the
and expensive chemical process. By reliability and usability. This is true content it holds, transmits or serves
2009, the company had a 50 percent both of IT hardware—including servers, up. This period of IT maturation
share of the Chinese market—despite PCs, smartphones and sensors—and coincides with increasing levels
40 percent price cuts by developed- of communication technologies, with of digitization—the availability of
market competitors.9 mobile and broadband connectivity content in electronic form. Not only
nearly ubiquitous in the developed are books, music and news all online,
world and increasingly common across but increasingly so are taxes, medical
much of the developing world. records and bank deposits. And in the
future, remote sensors will allow a raft
of physical objects to interact with
people—and each other.
9

12. Figure 2: New developments and capabilities in IT Remote sensors—These create
new ways to track goods across
the supply chain and to obtain
information about product usage.
Predicting They are an important element in
information the development of “smart grids”
that integrate households and power
grids in ways that increase energy
efficiency and reduce energy use.
Analytics
Advanced analytics—This is the
Moving Analyzing
information information
extensive use of data, statistical
Collaborative analysis, explanatory and predictive
computing models, and fact-based management
Mobile
tools to drive decisions and
actions.10 Businesses can harvest
Cloud
computing greater insight and competitive
advantage from the mass of data
Sensors
accumulated in the course of
IT developments producing and selling to customers
or operating plants and equipment.
Sensing Processing
information IT capabilities information
These developments in IT are not only
changing the options available to
businesses, but are also accelerating
the move toward a multi-polar world.
IT-powered multi-polarity
IT continues to make the world
feel smaller to organizations. As
the availability, affordability and
The business impact of a client process clouds. The emergence power of IT continue to increase,
selection of current technologies of cloud providers serving many geographic distance becomes less
different companies will promote relevant for today’s multinationals.
So what will the transformation in the greater standardization and Bangalore can be as convenient
power of information technologies industrialization of business processes, as Boston, Seoul as accessible as
mean for business? Earlier phases yielding significant scale efficiencies Seattle. Cost-effective and powerful
of the IT revolution enabled us to and allowing the optimization of IT IT makes it possible to closely monitor
move and process information, functions across the entire cloud. a manufacturing plant in Vietnam or
powered by computer processing to track components across a global
cycles, dependable and sophisticated Collaborative (social) computing— supply chain. The Internet instantly
software, and networking capabilities. This encompasses a wide variety of links suppliers directly to billions of
Recent developments are enabling IT technology tools that allow real-time potential customers across the world.
to sense, analyze and even predict networking and collaboration among The growing global middle class,
information, creating new capabilities users, both at home and increasingly more and more reachable through
in the generation and application of in the workplace. It facilitates the the Internet and mobile phones,
business insight (see Figure 2). creation of online communities of offers businesses the prospect of
interest that companies can tap into reaching millions of new consumers
Cloud computing—This provides to source ideas, test products and with greater discretionary spending
businesses with access to computing services, and market new offerings. power (see Figures 3, 4 and 5).
power, software and process Mobile technology, in particular, has
management functions from a remote Advances in mobile technologies— been crucial in increasing access
third-party provider, enabling them These technologies are now coming to markets, particularly among the
to pay “per use” and avoid the need into their own, not just for personal world’s poorest. Mobile phones, for
to own significant infrastructure communication, but also for remote example, allow farmers to access
themselves. Types of cloud services telemetry. Mobile technologies allow live market prices for their produce,
include IT infrastructure (access to businesses to reach customers at any and they bring banking services to
hardware and servers), platforms time wherever they are, tailor services remote areas for the first time. A
(development environments for to the customer’s exact location and recent Accenture survey of consumers
applications), applications (accessed sell to previously unreachable markets. revealed that those in emerging
through Web browsers) and multi- markets are more than twice as
10

13. likely as those in developed markets Figure 3: Growth in Internet connectivity
to buy and use consumer IT—such Percentage of the population using the Internet
as Web-enabled mobile phones, 80
smartphones and netbooks—in
2010.11 Advances in IT also allow 70
companies to access the increasingly 60
sophisticated workforces of the
50
emerging world, meaning that ever-
more-complex tasks can be carried 40
out across virtual global networks.
30
The new capabilities of IT have 20
the potential to benefit the
10
competitiveness of emerging-market
multinationals. Using IT, they can 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
leapfrog to create cheaper, more
Developed economies Emerging economies
flexible business processes without
the concerns of legacy IT that confront Source: International Telecommunications Union, 2009; Accenture analysis
their developed-market counterparts.
It is no wonder that, between 2010
and 2013, IT spending is forecast to Figure 4: Growth in use of mobile telephones
grow 5.8 percent per year in emerging Total number of mobile cellular subscriptions in the world (in billions)
markets compared with 3.6 percent in 4.5
developed markets.12
4.0
IT and the multi-polar world 3.5
have enlarged the business 3.0
ecosystem 2.5
77%
2.0 74%
Taken together, the rise of the multi- 71%
polar world and the maturation of IT 1.5
67%
are changing the nature of competition 62%
1.0 57%
53%
and the nature of stakeholder 41%
47%
0.5 36% 33% 29% 26% 23%
interactions. The ecosystem in which 59% 53% 47% 43% 38%
64%
businesses have traditionally operated 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
has enlarged and become more
Developed economies Emerging economies
complex: more competition, more
stakeholders, more customers, spread Source: International Telecommunications Union, 2009
across more geographic boundaries.
As the following chapter explains,
the two trends are also combining to Figure 5: Growth of the middle class
generate new ways of creating value
Number of households (in millions) with annual incomes greater than US$5,000
among stakeholders—with important (at constant prices and at purchasing power parity)
consequences for businesses.
800
700
600
500
400
300
200
100
0
1999 2004 2009 2014f
Developed economies Emerging economies
Source: EIU
11

14. The new market-making forces
The business ecosystem is now Figure 6: A perspective of ecosystem disruption
populated by more stakeholders and
competitors, complicating the terrain 6a. Traditional view of the business ecosystem
for companies around the world.
However, a further reality is dawning:
the nature of competition itself is B2B B2C End-consumers
changing. Accenture has identified companies companies
how the intertwining of IT maturation
and the rise of the multi-polar world
are generating six forces that are
creating new market potential
6b. New market-making forces are creating a more complex business ecosystem
(see Figure 6). These forces are leading
to novel configurations of capital,
talent and resources that open up
1 1 4
B2B B2C
more efficient forms of production; companies companies
End-consumers
unlock new products and services;
introduce new business models; and 3 6 5
open more components of the value
2 2 2
chain to collaborative execution.
Intermediaries
Co-production between firms and Consumer-to-consumer content sharing
1 their customers and suppliers
4
Using IT to create new bridges Peer-to-peer markets operating outside
2 between producers and customers
5 the traditional value chain
New forms of B2B commerce, Cooperative consumption by groups of
3 including the emergence of specialist 6 end-consumers
“horizontal” players
12

15. Here is a review of the six new market- Some new companies take this idea
making forces: to its logical extreme and have
built their business models entirely
Co-production on harnessing the experience of
external individuals. Marketocracy, an
More and more companies are investment-management and research
harnessing their customers’ ideas, firm, manages mutual funds based
tastes and productive powers. Danish on the top performers from more
toy maker Lego has launched an online than 100,000 model portfolios run by
customization platform—its Design amateur investors.17
byME site—where enthusiasts assemble
components for their own designs, There are strong indications that
which Lego then makes available to business leaders are starting to take
other customers.13 Dell launched its customer co-production seriously.
IdeaStorm site to tap into the ideas of Half of the business leaders responding
the global community of Dell users; to to Accenture’s survey think that
date, the company has implemented greater collaboration with customers
hundreds of the 12,000-plus ideas (for example, crowdsourcing of design
suggested at the site.14 Companies can or innovation) will have a significant or
also use such communities as tools very significant impact on competition
to reach out into the marketplace. in their industries over the next five
Lancashire Tea generated publicity, years (see Figure 7).
as well as useful input, when it asked
its fans on Facebook to help choose
its new packaging designs.15 Estée
Lauder invites bloggers to its perfume
launches to help generate online buzz
around new fragrances.16
Figure 7: Impact on competition of long-term IT-related trends
What impact will each of the following long-term IT-related trends have on competition in your industry over the next five years?
Emergence of new, faster or more flexible business
15% 47% 25% 11% 2%
processes
Greater consumer connectivity (e.g. via mobile, 20% 39% 25% 11% 4%
broadband)
Greater returns from applying insights about
12% 46% 27% 12% 2%
customer behavior/preferences
Growth in the bargaining power of more knowledgeable
16% 41% 29% 10% 3%
consumers
Greater collaboration with customers
13% 37% 29% 17% 3%
(e.g. crowdsourcing design or innovation)
Increased ease, or lower cost, of expansion into new
9% 35% 34% 19% 3%
markets or regions
Emergence of new business models (e.g. "freemium" 13% 30% 27% 22% 6%
online news, open-source software)
Increased ease, or lower cost, of market entry for new
11% 30% 30% 23% 5%
players
Declining time advantage of being first to market 9% 24% 39% 21% 6%
0 10 20 30 40 50 60 70 80 90 100
Very significant Significant Moderate Limited None Don’t know
13

16. New bridges between Other examples include Apple’s iPhone These developments present
apps, which provide a new revenue particular opportunities for small
producers and customers stream for Apple and a creative and companies, which can now take
Information technologies are being entrepreneurial outlet for others, advantage of the benefits of scale
used to enlarge markets. Two and Amazon’s “Marketplace,” which previously enjoyed only by large
examples: selling mobile phone offers small businesses the chance to businesses. Larger businesses are
banking services in rural areas of reach large audiences while increasing under further pressure as smaller
emerging markets, as Kuwait-based the variety of products for sale on rivals are increasingly able to source
mobile telecommunications company Amazon’s site. standardized business services
Zain does in partnership with Citibank from third-party cloud providers
in East Africa, and providing higher Information technologies also allow (such as Salesforce.com) with little
education online to students across companies to serve a much wider upfront investment and without
the world, a model that the University variety of tastes and needs. The having to manage an IT legacy.
of Massachusetts uses to reach most well-known example is how
students in China. e-commerce is helping businesses Consumer-to-consumer
reach the “long tail” of niche
Most senior executives grasp the markets.19 At Apple’s iTunes Store, content
potential for disruption—and sense for instance, consumers can purchase Information technology has helped
the opportunity. Nearly sixty percent more than 10 million songs across overcome the asymmetry in knowledge
of respondents overall said that every genre of music. Similarly, that has traditionally given sellers
greater consumer connectivity retailers and individuals can find large the upper hand. In this new phase
would have a significant or very international audiences for their often of consumer-to-consumer (C2C)
significant impact on competition niche wares using eBay’s marketplace. activity, participants are sharing
in their industries over the next five information in open, global online
years (see Figure 7). Interestingly, New forms of business-to- forums. Initially taking the form of
the response was more emphatic reviews of products and services, this
among executives at companies
business commerce
activity now increasingly encompasses
based primarily in emerging markets, Historically, business-to-business (B2B) the mobilization of communities
with 68 percent of respondents companies supplied raw materials, to support, discuss or take action
in those markets, compared with semi-finished and wholesale goods and about a product, service or project.
56 percent in developed markets, services and, more recently, B2B grew
saying that greater consumer to include outsourcing as companies For example, on TripAdvisor’s
connectivity would significantly realized the cost advantage of using website, individuals rate and talk
affect competition in their industries specialists to undertake more of their about their experiences in hotels
over the next five years. non-core activities. Now, outsourcing and restaurants around the world,
is moving deeper into activities shifting the balance of market
Companies can also harness value by once considered core as technology power from the hospitality sector
acting as intermediaries and offering changes the cost basis of those toward the traveler.20 The Now Smell
services that facilitate the productive activities—and the ease and exactness This blog brings together perfume
activities of others. InnoCentive was with which companies can interact enthusiasts to review scents and is
the first global Internet-based hub with their outsourcing providers. an opinion former in the industry.21
designed to help connect “seekers”— This is creating a fundamental change
those with challenging research New specialized services are becoming in the way consumers choose what
problems—with “solvers”—individuals possible as cloud computing and to buy as they rely increasingly
who devise creative solutions to related technologies enable the on information written by peers
these problems. InnoCentive itself aggregation of small, individually online rather than on brand history,
does not generate solutions; rather, uneconomic pockets of demand marketing or published specialists,
it brings together individuals, for business services in areas such for example in consumer reports.
companies, academic institutions as procurement, human resources
and public-sector and non-profit and data analysis. Amazon, known At the same time, new IT efficiencies
organizations that collectively for its online retail presence, and price points are enabling
represent more than 200,000 of now offers e-commerce and consumers to share more ideas and
the world's brightest minds.18 warehousing services. Li & Fung, information. Some of this is just for
previously a trading company, now recreation or entertainment: tweets
provides sophisticated procurement of news articles or YouTube videos
solutions (for more detail, see are typical. Often, sharing takes the
"Case studies: Li & Fung"). form of blogs, many of which provide
insight into a particular topic. They
range from the mainstream to the
niche, such as The London Review of
Breakfasts. These tools help individuals
14

17. keep their networks up to date with Peer-to-peer markets Cooperative consumption
the latest trends in their areas of
interest, and can provide companies IT has enabled the creation of Social networking tools and other
with opportunities to tap into groups models of international production technology developments allow
of interested customers. However, the based on cooperative interactions customers to increase their bargaining
speed of dissemination of information among individuals rather than power further through “team buying,”
has a downside: bad news can spread traditional sources of experience where a group comes together online
very quickly, and there are real risks of and trust. Witness the ascendancy to negotiate a discount on a product
companies facing serious brand issues of Wikipedia, or the success of or service.
from one bad review—which might peer-to-peer lending, especially
in providing credit to areas of the Historically, consumer cooperatives
even be written by a competitor.
developing world where conventional were organized to keep prices fair
PatientsLikeMe shows how the model banking services are scarce. and reduce monopolistic behavior.
of C2C dialogue has the potential As markets became broader-based
to transform the health care and The new capabilities of IT and the and better regulated, there was less
pharmaceutical industries. Patients rise of the multi-polar world give need for such models of consumption.
with complicated medical problems more power to groups of individual Recently, thanks to IT, the trend has
share information with others with producers; in some cases, they remove taken off again. Shanghai-based
similar conditions at PatientsLikeMe’s the need for traditional intermediaries Liba.com, founded in 2003 and selling
site, arming each other with the or guardians of trust. Groups of like- everything from paint to ceiling lamps,
information needed to engage in minded individuals can now easily had 1.6 million members within five
informed dialogue with their doctors “cluster” to reduce their reliance on years, with 300,000 unique visitors
and creating samples to test new established companies and have more a day on its site and some 30,000
therapies in large self-organized choice over how goods and services transactions a month during group-
standardized trials.22 are produced. These communities are buying events in Beijing, Shanghai,
not necessarily driven by pure profit Guangzhou and elsewhere.27
Individuals’ ability and appetite to motives; one example is the Linux
generate and distribute their outputs, operating system, which was created In North America, Groupon is a young
often seemingly without a profit and is sustained by developers working US company performing the same
motive, is in turn rendering that output for free using open-source software.23 function.28 It brings together offers
free at the point of consumption. of discounts from local businesses
Music, news, opinion, food recipes: Increasingly, peer-to-peer networks and invites members to register their
in all these areas, content sharing provide services outside the interest; if enough people register
threatens established business models, boundaries of the established on a given day, the offer comes into
as demonstrated by the growth of corporation. For example, in online effect. The advantages of this model
unsigned bands sharing music on groups such as TechArena Community, are that it focuses customers’ minds,
MySpace, the pressures faced by the individuals seek and offer each other lets them know exactly what they
newspaper industry, and the closure of experience on how to operate and are getting, and then encourages
Gourmet and other magazines. upgrade their computers.24 Zopa.com, interested individuals to advertise the
a marketplace where individuals lend deal to their networks. Earlier team-
Overall, C2C communities can money to other individuals, creates buying models were less effective
heighten consumers’ expectations of an alternative to banks for borrowers because they relied on waiting for a
companies, potentially reducing their and a new form of investment for critical mass of customers to express
ability to create or control their market individual lenders.25 Peer-to-peer an interest in a product before
and investor messages and changing production is likely to extend beyond negotiation on discounts could begin.
pricing models in a number of the intangible world of ideas, money
industries. Many business leaders are and information to communities that Opportunities and
aware of the challenge: Accenture’s produce products. Access to low-
survey reveals that 57 percent cost production in emerging markets challenges in the changed
of executives think the growing continues to broaden; producing ecosystem
bargaining power of knowledgeable physical goods at home will be
While some of the new market-
consumers will significantly affect increasingly possible with the arrival
making forces may still be embryonic,
competition in their industries over the of affordable 3-D “printers”.26
each has substantive implications
next five years (see Figure 7). Leaders for businesses. Most dramatically,
of businesses based in emerging competitors or new entrants—
markets are especially concerned, sometimes not driven by a profit
with 67 percent expressing this view, motive—can harness the new forces
compared with 52 percent from in ways that risk subverting existing
developed markets. business models, and potentially
transforming whole industries. For
example, insurance risk assessment
could be upended by the combination
15

18. of location-based technologies, Figure 8: Businesses see management of complex networks as the most significant
freely available neighborhood data challenge raised by future developments in IT
and analytics software. In health For your company, which of these business challenges will be most heightened by the impact
care, social computing may create of IT developments over the next five years? (Select two)
new options for drug trials—as well
Managing complex networks of suppliers, 37%
as a growing reliance by patients business partners and customers
on the Internet for medical advice.
Nor will government and regulation Protecting proprietary information and data 28%
be immune from these forces (see
Competition for technologically and analytically
“Implications for government”). skilled employees
27%
Executives expect new IT-driven Competition from new market entrants 25%
business capabilities to have a major
impact on competition in their Ability of data-rich large players to dominate
23%
the market
industries over the next five years. For
Diminished ability of the company to protect its
example, 62 percent of respondents brand(s) (e.g. due to such developments as online 18%
to Accenture’s survey thought the consumer ratings, blogs, recommendation engines)
emergence of new, faster or more Increasingly complex regulations for the
12%
flexible business processes would have management of data
a significant impact on competition
Increasing consumer concern over data privacy 10%
(see Figure 7). Nearly sixty percent of
business leaders thought the same of
greater consumer connectivity, and Insufficient Internet connectivity 9%
58 percent pointed to the greater
returns resulting from applying Increasing levels of cybercrime 7%
insights about customer preferences.
Other 1%
The changed ecosystem will create
challenges, but also opportunities for Don't know 1%
achieving high performance. Among
the challenges, companies will need
to manage more complex networks
of suppliers, business partners and Figure 9: Business leaders see IT-related opportunities to improve company performance
in multiple areas
customers; protect proprietary
information and data; compete for Which of the following IT-related opportunities do you see as most relevant to improving
technologically and analytically your company’s performance over the next five years? (Select two)
skilled employees; and respond to More efficient ways of working (e.g. online training,
competition from new market entrants team collaboration across borders, office-less 32%
companies)
(the four challenges most cited by
New possibilities to collaborate with other players in
executives in our survey; see Figure 8). the value chain
26%
On opportunities, the business leaders Reaching new customer groups 24%
we surveyed saw potential to drive
performance across many parts of Entering new markets 24%
the enterprise, from creating more
efficient ways of global working, and Better sourcing and analyzing of data 21%
collaborating internally and externally,
to reaching new customer groups Involvement of customers in innovation or
20%
and entering new markets (the four production processes
opportunities most cited by executives Customizing products and services more easily 18%
in our survey; see Figure 9).
Sourcing of ideas through "open" or collaborative
In short, companies have the innovation with third parties (e.g. online communities, 15%
universities, "open source" communities)
opportunity to do things differently,
harnessing the new market-making Integrating more complex supply chains 12%
forces to drive high performance.
Greater competition among suppliers 8%
Other 1%
Don’t know 0%
16

19. Mastering orchestration
New information technologies and Figure 10: Few businesses are advanced in their responses to new, technology-enabled
the multi-polar world have combined opportunities and challenges
to create turbulence in industry
To what extent do you feel your company is prepared to deal with the opportunities
structures. Although business leaders and challenges you identified?
see many opportunities and challenges
ahead, few are well prepared: We are significantly advanced in our strategic
11%
response
Accenture’s research has found that
only 11 percent of business executives We have taken a number of steps in our strategic 49%
believe that their companies are response, but still have some way to go
significantly advanced in their We understand the implications and risks, but
30%
strategic response (see Figure 10). have not made significant changes to strategy yet
We have yet to prepare for these issues in a
The challenge for businesses seeking systematic way 8%
to achieve high performance is to
We do not feel the need to change our strategy in
move from a period of building global response—the company is sufficiently prepared
1%
connections to one in which those
connections are actively managed Don’t know 1%
in new and different ways. In the
changed ecosystem, a broader suite
of technological and geographic
options is available. Orchestrating
those connections and relationships
requires harnessing the six market-
making forces in order to realize the
potential for growth and value creation.
Public-sector organizations have similar
opportunities to deliver policy and
services more efficiently and effectively
(see “Implications for government”).
17

20. Figure 11: IT is seen as critical in helping business orchestrate global operations previously, it would have taken seven
and a half weeks to deploy them
When it comes to managing a global business, to which of the following challenges will IT most help you to internally.31 (For more detail on Lilly’s
respond over the next five years? (Select two) strategy, see “Case studies: Eli Lilly
and Company.”) In realizing these
Reaching customers globally/entering new markets 50% benefits, Lilly’s experience reflects
the results of our business leader
Encouraging collaboration between employees in
different countries
44% survey: 44 percent of respondents
saw IT as helping them most with
Managing an international workforce 30% encouraging collaboration between
employees; 30 percent, managing an
Harnessing innovation from overseas sources 22% international workforce (see Figure 11).
In order to reach customers
Improving access to lower-cost suppliers 18%
globally—the most common challenge
Improving the environmental sustainability of identified by business leaders (see
11%
global operations Figure 11)—computer giant Dell began
using Twitter. Users can sign up to
Sourcing capital globally 10% follow Dell, receiving messages about
discounted products as well as links
Improving access to natural-resource inputs 4% to purchase products or to forward
the information on to others. Because
Other 3% of its choice to open up to consumers
on Twitter, Dell saw US$3 million in
Don't know 4% additional sales in 2007 and 2008.
In 2009, the cumulative sales figure
rose to US$6.5 million, as the number
of users following Dell on Twitter
climbed to 1.5 million. Dell has seen
some of the strongest growth in
Twitter-related sales come from
emerging markets, where broadband
What are the opportunities the quality of products and services
penetration is rising and adoption
(for example, by acting upon customer
for high performance? feedback on blogs), deepening
of social media is strong among
consumers. Dell’s Brazil operation, for
Accenture’s research has identified existing revenue streams (using social
example, has generated US$800,000
three principal ways in which networks), improving collaboration
in just eight months of activity
organizations are realizing between employees (through more
through its local Twitter account.32
opportunities for achieving high efficient communication tools) and
performance in the changed reducing overhead costs (using
Extension: Developing current
ecosystem: optimization, extension cloud computing). Moreover, the
and transformation. maturation and near-ubiquity business in new areas
of information technologies
Companies can also harness IT to
Optimization: Achieving means that most businesses can
extend their business models into
operational excellence in current very easily harness them.
adjacent industries or markets. Google
business activities Eli Lilly and Company, for example, offers a good example. The company
is using cloud computing to optimize earns the bulk of its revenues from
For most businesses, achieving
its business. With pressure growing Internet advertising, which made
excellence in execution is a perennial
to cut fixed IT costs without up 97 percent of its 2008 revenues
priority. In times of recession, it is
compromising IT service levels during of US$22 billion.33 But now, to tap
a key differentiator.29 Optimization
the recession, the pharmaceuticals into a new market of Web users, the
affords businesses the potential
company began working with an company has developed Google Wave,
to continue doing what they do,
application cloud provider to grant a social computing platform that
just better—with lower costs and
computing capabilities to its global will allow users to collaborate and
increased revenues. IT’s role in
network of scientists. As a result, its communicate using richly formatted
enabling this is not in question, but
scientists can conduct more effective text, photos, videos, maps and
cloud computing, mobile computing
and efficient molecular modeling more.34 Although free at the point of
and other technologies, separately
or risk-analysis calculations across consumption, this product extends
and in combination, can push that
countries and regions.30 Lilly can the company’s business model by
contribution to another level. They
now have new computer servers getting more people to navigate its
afford new players a range of
up and running in three minutes; Web pages. Similarly, Google’s free
opportunities, including enhancing
mobile-phone navigation service,
18

21. which streams live traffic updates revenues from Safaricom’s data- They continuously seek greater
to handsets running on its Android services business segment (which insight
operating system, is also envisaged includes M-PESA, text messaging
as a future ad-supported service.35 and Internet services). Data services To better understand their global
accounted for 18 percent of communities of consumers and
ICICI Bank in India has used Safaricom’s total revenues in 2008—an stay ahead of the competition,
technology to extend its business into increase of more than 50 percent from companies can use analytics
adjacent geographic and IT-enabled 2007—and are likely to contribute an technologies to drive decisions
markets—markets that were previously even higher proportion in the future.38 and actions. Good data analysis
unreachable. In 2001, the company can help businesses understand
launched its Non Resident Indian Smaller companies are also using IT to and manage their performance.
(NRI) banking service, which uses disrupt industry dynamics, developing
Web-based and wireless platforms business models that could become Collect the right data—with the right
to provide the Indian diaspora the industry standards. For example, infrastructure
community with e-banking services. prior to Zipcar’s arrival, the choices Forty-two percent of company
Money transfers are its core offering for those who needed a vehicle were executives told Accenture that
to NRIs, but the product range has to buy, lease or rent. But Zipcar has obtaining more and better data
evolved to include savings and deposit established a new model: an IT- will be a strategic priority for their
products, structured investment enabled car-sharing service. Zipcar organizations over the next five years
options, mortgages, insurance and provides on-demand access to vehicles (see Figure 12). A key to achieving
equity-linked products. ICICI has using high-speed Internet, mobile this is to establish the right analytical
also introduced a number of product broadband and GPS technology. Users infrastructure. Many companies,
variations which appeal to different register online to reserve vehicles, such as online DVD rental service
market segments. For example, its and with the use of a “Zipcard,” they Netflix, have incorporated business
“NRI Edge” is targeted at affluent can access, unlock and lock, and intelligence technologies from the
NRIs seeking a range of priority return their vehicles.39 Alternatively, outset.43 Netflix uses recommendation
services and exclusive privileges, while customers can use a mobile app algorithms to predict the movies its
a card-based remittance account to find, reserve, access—or even customers will be interested in seeing.
allows its customers to draw down sound the horn of—a Zipcar vehicle. Consumers’ movie recommendations
NRI money transfers at ATMs in Customers can purchase services in are a key to understanding their
India.36 With the NRI service serving increments of as little as an hour.40 preferences—and ultimately a pointer
its clients as far apart as Canada and Since the US-based company was to the number of films they will
the Middle East, ICICI has extended founded in 2000, it has opened offices purchase. Netflix regularly upgrades
its business model into entirely new in Canada and the United Kingdom. its technology infrastructure through
geographic—and virtual—territory While it is still relatively small, Zipcar open-source channels.44 A recent
(for more on ICICI’s strategy, see has 80 percent of the car-sharing improvement to its algorithm came
“Case studies: ICICI Bank”). market, has grown its user base to from a dispersed team of global
270,000 and expects to have 2 million researchers based in Austria, Canada,
Transformation: Growing new users by 2014.41 By using technology Israel and the United States.45
business in new areas to work globally, this company is
transforming industries: in 2009, Create insight from the data
IT can help develop entirely car-rental company Hertz launched its
new business models that serve Simply collecting data is not enough.
own car-sharing service in Europe and Deriving actionable insight from
markets that had previously been North America.42
unreachable—or even unimagined. the data is the critical next step.
It can also help reshape industry Indeed, Accenture’s research shows
dynamics by setting new standards
The instruments of that it is becoming more important
that others have to follow. orchestration to develop better data-analysis
capabilities. Thirty-nine percent of
How can businesses set about the business leaders we surveyed
Safaricom, a mobile network operator
realizing the opportunities presented expect that investing in better data-
in Kenya, is using IT to develop a
by the changed ecosystem? What analysis capabilities will form a part
new business model and tap into a
are the capabilities they can develop of their strategies for responding to
new market. The company’s M-PESA
to position themselves for effective the emerging challenges—such as
service, launched in 2007, offers
global orchestration and high greater competition from data-rich
customers a way to transfer money
performance? Accenture’s research companies—over the next five years
anywhere in the country or to make
has identified two broad hallmarks (see Figure 12).
payments—for instance, school fees
of success that will be increasingly
and taxi fares.37 Essentially, Safaricom
important to underpinning a
has transformed its business model
company’s competitive performance:
by serving an entirely new market
first, relentlessly gathering, analyzing
in Kenya: mobile banking. In 2008,
and using data; and second, developing
the increase in demand for M-PESA
a broader network of relationships
contributed to a 94 percent rise in
with stakeholders.
19