Why Emerging Markets Don’t Need Elon Musk

 

by Bryan Mezue  |  HBR.org 

Elon Musk, the South Africa-born entrepreneur, recently unveiled his proposals for the Hyperloop, a groundbreaking high-speed transportation system. The technology community has become accustomed to Musk pushing the boundaries. His name is also attached to Paypal, SpaceX, Tesla and Solar City, and he is very rightly celebrated.
At the same time, South Africa is currently considering its own transport future and many African countries are much farther behind in transport infrastructure. The gap between Hyperloop and the state of infrastructure in the vast majority of developing countries is a demonstration of what economist William Janeway calls the Two Innovation Economies.On one side is the frontier economy, populated by highly skilled engineers pushing the boundaries of technology, and investors making highly risky bets on which new fields will take off. On the other side, where most of the world’s billions reside, is the follower economy which is characterized by solving problems that have already been solved elsewhere, but have not been adopted due to institutional or structural reasons. Here, investors often do not make bets on technology risk; they are more worried about political and implementation risk.

The frontier economy has unimaginable appeal to the skilled engineers and savvy entrepreneurs. It is sexy to work on the world’s most technically difficult problems at the bleeding edge. Top talent in the follower economy has to deal with messier problems, like poverty, lack of healthcare, lack of education, and unemployment. Instead of cutting-edge science, they have to spend time worrying about things like politics and economics (the dismal science).

As a result, many top-tier students in developing markets graduating from  READ MORE

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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

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