Summary Innovation in Emerging Markets 2025 - 2026
Lecture 1: Introduction/Nature of Emerging Markets/IEM Project Briefing
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press. Stuvia P.3
Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47 Stuvia P.5
Lecture 2: Responding to Institutional Voids: Strategies of Developed Market MNEs
Doh, J., Rodrigues, S., Saka-Helmhout, A. and Makhija, M. (2017). International
business responses to institutional voids, Journal of International Business Studies,
48: 293-307. Stuvia P.7
Mair, J. & Marti, I. (2009). Entrepreneurship in and around institutional voids: A case
study from Bangladesh, Journal of Business Venturing, 24: 419-435. Stuvia P.10
Rodrigues, S. B. & Child, J. (2023). The role of corporations in addressing non-market
institutional voids during the COVID-19 pandemic: The case of an emerging
economy, Journal of International Business Policy, 6: 115-132. Stuvia P.12
Stuvia P.... = referred to the summary of 2024 - 2025:
Samenvatting - Innovation in Emerging Markets (MAN-MIM408)
https://www.stuvia.com/nl-nl/doc/7561305/samenvatting-innovation-in-emerging-markets-
man-mim408
(This summary is not created by me!)
1
, Summary Innovation in Emerging Markets 2025 - 2026
Lecture 3: No literature
Lecture 4: Innovation by SMEs in Emerging and Developing Markets
Robson, P. J., Haugh, H. M. & Obeng, B. A. (2009). Entrepreneurship and innovation
in Ghana: Enterprising Africa. Small Business Economics, 32(3): 331-350. Stuvia P.17
Alvarez, S. A., & Barney, J. B. (2014). Entrepreneurial opportunities and poverty
alleviation. Entrepreneurship theory and practice, 38(1), 159-184.
Central claim
The paper argues that entrepreneurial activity does not always lead to economic growth in contexts of abject
poverty. Although development efforts have improved human capital, property rights protection, and access
to financial capital, the results have remained mixed because the wealth creation potential of entrepreneurial
opportunities varies. The authors’ main point is that poverty alleviation depends not simply on increasing
entrepreneurship, but on enabling the kinds of opportunities that can actually generate economic profits, job
creation, and sustained growth.
Definition of entrepreneurial opportunities
The paper defines entrepreneurial opportunities as situations in which competitive imperfections exist in
factor or product markets, making economic profit possible. Under perfect competition, no actor can generate
economic wealth, so opportunities only exist when competition is imperfect. The paper distinguishes three
opportunity types: self-employment opportunities, discovery opportunities, and creation opportunities.
These differ in their growth potential and in the kinds of human capital, property rights, and financial capital
needed to exploit them.
Core mechanism
The central mechanism of the paper is:
opportunity type → required human capital / property rights / financial capital → ability to form and
exploit the opportunity → level of wealth creation and economic growth
The authors argue that the institutional improvements made in poor contexts have mainly enabled self-
employment opportunities, which require relatively low skills and low capital but also have low growth
potential. By contrast, discovery opportunities and creation opportunities offer greater potential for
significant economic impact, yet they require more sophisticated supports that are still largely absent in abject
poverty settings.
Opportunity type 1: Self-employment opportunities
Self-employment opportunities exist in pre-existing markets or industries and involve clearly definable
market gaps. They are described as replication opportunities that are visible to almost everyone in an
economy. These opportunities require low levels of human capital, do not depend on alertness, and are usually
not scalable. They are rarely a source of employment beyond the founding entrepreneur, so their long-term
contribution to economic growth is limited. Examples given in the paper include goat-milking businesses,
grocery shops, rice paddy trading, and microretail stores.
The paper does acknowledge that self-employment may help poor individuals build basic business skills. For
example, the process of getting a microloan, managing inventory, repaying debt, and running a simple business
can strengthen basic human capital. However, these ventures still tend to have low long-term profitability,
limited barriers to entry, and weak job creation effects.
Microfinance and the self-employment problem
2
, Summary Innovation in Emerging Markets 2025 - 2026
The paper treats microfinance as useful but structurally limited. Microfinance provides capital where traditional
finance is unavailable and often relies on social monitoring rather than formal collateral. Yet it is mainly
designed to fund small, observable ventures with limited business scope. This means it tends to support self-
employment opportunities rather than wealth-creating discovery or creation opportunities.
The authors’ mechanism here is important: because these ventures are easy to imitate and require little
specialized skill, many people enter the same line of business. As entry increases, supply exceeds demand,
profits fall, and economic wealth is competed away. This is why the paper argues that microfinance can
unintentionally produce oversupply, debt pressure, and limited growth. The Grameen Bank example illustrates
this pattern, since a large share of loans was concentrated in repetitive activities such as livestock, rice trading,
and grocery shops.
Opportunity type 2: Discovery opportunities
Discovery opportunities are formed by exogenous shocks to a market or industry, such as changes in
technology, government policy, or demographics. These opportunities exist independently of the entrepreneur,
but they can only be observed by some individuals. Their exploitation depends on alertness, general human
capital, and often deep industry or market experience. They are more scalable than self-employment
opportunities and can generate significant economic profit, but they are also risky because once discovered they
may be quickly imitated.
The paper’s example is Sibusiso, the mechanic in South Africa who recognized an opportunity to repair and
certify “cockroach taxis.” His success depended on training, industry-specific knowledge, and the ability to spot
a gap that others could not exploit easily. This shows the growth potential of discovery opportunities, but also
why the abjectly poor usually cannot exploit them: they often lack the education, technical skills, financial
access, and formal protections needed to move quickly and defend their profits.
Opportunity type 3: Creation opportunities
Creation opportunities do not fully exist in advance. They emerge through experimentation and learning, and
are produced through interaction between the entrepreneur and the surrounding environment. The paper presents
this as a process in which entrepreneurs begin without complete knowledge, test ideas, adapt repeatedly, and
gradually form an opportunity. Because the opportunity itself is created through action, the knowledge needed to
exploit it often does not exist before the entrepreneurial process begins.
A key concept here is co-creation. The paper explains that customers, suppliers, and other stakeholders
participate in defining and creating value. This makes creation opportunities path-dependent, emergent, and
often harder to imitate. The process itself may become a barrier to imitation because competitors cannot easily
reproduce the learning that produced the opportunity. For that reason, creation opportunities have the strongest
potential for long-term/sustainable inimitability.
The paper uses Muhammed Yunus and the formation of Grameen Bank as an example of a creation
opportunity. Yunus did not begin with a fixed business model; he learned through repeated adaptation and built
a new organizational form through experience. This illustrates the paper’s point that learning happens in the
process of forming the opportunity.
Human capital
The paper argues that human capital is essential, but its relevant form differs by opportunity type. Self-
employment opportunities require relatively low levels of education and business skill. Discovery
opportunities require both general human capital and specific industry or market knowledge, plus alertness.
Creation opportunities require some general human capital at the outset, but additional skills are developed
during the opportunity formation process itself. In that sense, creation opportunities are especially connected to
path-dependent learning.
Property rights protection
3
Lecture 1: Introduction/Nature of Emerging Markets/IEM Project Briefing
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press. Stuvia P.3
Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47 Stuvia P.5
Lecture 2: Responding to Institutional Voids: Strategies of Developed Market MNEs
Doh, J., Rodrigues, S., Saka-Helmhout, A. and Makhija, M. (2017). International
business responses to institutional voids, Journal of International Business Studies,
48: 293-307. Stuvia P.7
Mair, J. & Marti, I. (2009). Entrepreneurship in and around institutional voids: A case
study from Bangladesh, Journal of Business Venturing, 24: 419-435. Stuvia P.10
Rodrigues, S. B. & Child, J. (2023). The role of corporations in addressing non-market
institutional voids during the COVID-19 pandemic: The case of an emerging
economy, Journal of International Business Policy, 6: 115-132. Stuvia P.12
Stuvia P.... = referred to the summary of 2024 - 2025:
Samenvatting - Innovation in Emerging Markets (MAN-MIM408)
https://www.stuvia.com/nl-nl/doc/7561305/samenvatting-innovation-in-emerging-markets-
man-mim408
(This summary is not created by me!)
1
, Summary Innovation in Emerging Markets 2025 - 2026
Lecture 3: No literature
Lecture 4: Innovation by SMEs in Emerging and Developing Markets
Robson, P. J., Haugh, H. M. & Obeng, B. A. (2009). Entrepreneurship and innovation
in Ghana: Enterprising Africa. Small Business Economics, 32(3): 331-350. Stuvia P.17
Alvarez, S. A., & Barney, J. B. (2014). Entrepreneurial opportunities and poverty
alleviation. Entrepreneurship theory and practice, 38(1), 159-184.
Central claim
The paper argues that entrepreneurial activity does not always lead to economic growth in contexts of abject
poverty. Although development efforts have improved human capital, property rights protection, and access
to financial capital, the results have remained mixed because the wealth creation potential of entrepreneurial
opportunities varies. The authors’ main point is that poverty alleviation depends not simply on increasing
entrepreneurship, but on enabling the kinds of opportunities that can actually generate economic profits, job
creation, and sustained growth.
Definition of entrepreneurial opportunities
The paper defines entrepreneurial opportunities as situations in which competitive imperfections exist in
factor or product markets, making economic profit possible. Under perfect competition, no actor can generate
economic wealth, so opportunities only exist when competition is imperfect. The paper distinguishes three
opportunity types: self-employment opportunities, discovery opportunities, and creation opportunities.
These differ in their growth potential and in the kinds of human capital, property rights, and financial capital
needed to exploit them.
Core mechanism
The central mechanism of the paper is:
opportunity type → required human capital / property rights / financial capital → ability to form and
exploit the opportunity → level of wealth creation and economic growth
The authors argue that the institutional improvements made in poor contexts have mainly enabled self-
employment opportunities, which require relatively low skills and low capital but also have low growth
potential. By contrast, discovery opportunities and creation opportunities offer greater potential for
significant economic impact, yet they require more sophisticated supports that are still largely absent in abject
poverty settings.
Opportunity type 1: Self-employment opportunities
Self-employment opportunities exist in pre-existing markets or industries and involve clearly definable
market gaps. They are described as replication opportunities that are visible to almost everyone in an
economy. These opportunities require low levels of human capital, do not depend on alertness, and are usually
not scalable. They are rarely a source of employment beyond the founding entrepreneur, so their long-term
contribution to economic growth is limited. Examples given in the paper include goat-milking businesses,
grocery shops, rice paddy trading, and microretail stores.
The paper does acknowledge that self-employment may help poor individuals build basic business skills. For
example, the process of getting a microloan, managing inventory, repaying debt, and running a simple business
can strengthen basic human capital. However, these ventures still tend to have low long-term profitability,
limited barriers to entry, and weak job creation effects.
Microfinance and the self-employment problem
2
, Summary Innovation in Emerging Markets 2025 - 2026
The paper treats microfinance as useful but structurally limited. Microfinance provides capital where traditional
finance is unavailable and often relies on social monitoring rather than formal collateral. Yet it is mainly
designed to fund small, observable ventures with limited business scope. This means it tends to support self-
employment opportunities rather than wealth-creating discovery or creation opportunities.
The authors’ mechanism here is important: because these ventures are easy to imitate and require little
specialized skill, many people enter the same line of business. As entry increases, supply exceeds demand,
profits fall, and economic wealth is competed away. This is why the paper argues that microfinance can
unintentionally produce oversupply, debt pressure, and limited growth. The Grameen Bank example illustrates
this pattern, since a large share of loans was concentrated in repetitive activities such as livestock, rice trading,
and grocery shops.
Opportunity type 2: Discovery opportunities
Discovery opportunities are formed by exogenous shocks to a market or industry, such as changes in
technology, government policy, or demographics. These opportunities exist independently of the entrepreneur,
but they can only be observed by some individuals. Their exploitation depends on alertness, general human
capital, and often deep industry or market experience. They are more scalable than self-employment
opportunities and can generate significant economic profit, but they are also risky because once discovered they
may be quickly imitated.
The paper’s example is Sibusiso, the mechanic in South Africa who recognized an opportunity to repair and
certify “cockroach taxis.” His success depended on training, industry-specific knowledge, and the ability to spot
a gap that others could not exploit easily. This shows the growth potential of discovery opportunities, but also
why the abjectly poor usually cannot exploit them: they often lack the education, technical skills, financial
access, and formal protections needed to move quickly and defend their profits.
Opportunity type 3: Creation opportunities
Creation opportunities do not fully exist in advance. They emerge through experimentation and learning, and
are produced through interaction between the entrepreneur and the surrounding environment. The paper presents
this as a process in which entrepreneurs begin without complete knowledge, test ideas, adapt repeatedly, and
gradually form an opportunity. Because the opportunity itself is created through action, the knowledge needed to
exploit it often does not exist before the entrepreneurial process begins.
A key concept here is co-creation. The paper explains that customers, suppliers, and other stakeholders
participate in defining and creating value. This makes creation opportunities path-dependent, emergent, and
often harder to imitate. The process itself may become a barrier to imitation because competitors cannot easily
reproduce the learning that produced the opportunity. For that reason, creation opportunities have the strongest
potential for long-term/sustainable inimitability.
The paper uses Muhammed Yunus and the formation of Grameen Bank as an example of a creation
opportunity. Yunus did not begin with a fixed business model; he learned through repeated adaptation and built
a new organizational form through experience. This illustrates the paper’s point that learning happens in the
process of forming the opportunity.
Human capital
The paper argues that human capital is essential, but its relevant form differs by opportunity type. Self-
employment opportunities require relatively low levels of education and business skill. Discovery
opportunities require both general human capital and specific industry or market knowledge, plus alertness.
Creation opportunities require some general human capital at the outset, but additional skills are developed
during the opportunity formation process itself. In that sense, creation opportunities are especially connected to
path-dependent learning.
Property rights protection
3
