Is MINT the New BRIC?
In 2001 the British economist Jim O’Neil coined the term BRIC[1]. In an attempt to predict which countries in the world would be the growth drivers for the coming decades; the countries Brazil, Russia, India and China were chosen.
Governments in the western world embraced this acronym, which was easy to remember. They allocated tax funding to send trade delegations to the BRIC countries on guided tours and came back excited. More tax funding was allocated to form incentive plans for companies prepared to engage in business ventures in the BRIC countries.
Over the last years the fad has faded. We don’t hear much about the BRIC countries anymore.
Just recently Jim O’Neil came up with a new tasty cocktail of promising economies – the MINTs: Mexico, Indonesia, Nigeria and Turkey. Apparently they should hold the potential to make it to the G10 before 2050.
Here are some key figures for the MINT countries
Note: All numbers are from the CIA FactBook. The BECH Index for a country reflects the industrial and post-industrial demand capacity of the country and thus also reflects the share of global demand for IT related products and services. T: Trillion, B: Billion, M: Million
Perspectives for the software industry
What’s in store for the software industry in the MINT countries?
All the big software companies are already there. If the growth potential of the MINT is released, all the big software companies will automatically benefit. They will benefit because they are already established and connected, but they will also benefit because all the foreign investment into the MINT countries will carry their software with them.
When large corporations move into a territory to develop, manufacture and sell products and services they bring management skills and technology with them. They bring their experience and they continue their partner relationships. SAP, Microsoft, Oracle AutoDesk etc, will automatically benefit.
So what about all the small and midsized software companies? Should they rush to the MINT countries instead of focusing on their local growth opportunities? Should a Finish software company rather look to Nigeria with a 6,3% growth rate than to Sweden with a 1,2% growth rate, Norway with a 3% growth rate or Germany with only 0,7% growth rate?
No way!
Exactly as the BRIC countries so do, the MINT countries have their priorities well defined: It is about value creation inside the economies. Priority number one is job creation, priority number two is export and then infrastructure, education, healthcare and social welfare. None of these countries will make it easy to just sell something from abroad either directly or through a reseller. That’s not what their governments nor their populations need. They want foreign companies to make investments and put their local people on the payroll.
The MINT markets are primarily for the big guys. If you can piggy-back on some of the big guys, then will you have a fair chance of making inroads early.
Bech’s first law says: “Cost of sales increases exponentially with the distance to the foreign market.” This is universal for small and medium sized companies that do not yet have any international infrastructure (and the corresponding management skills) in place.
Unless there are some really compelling circumstances, a Finnish company is better off starting locally and gaining the strengths to deal with the investments in larger and faraway markets later.
MINT, MINT, MINT -> the MINT rush!
I assume we can expect a MINT rush. Very soon politicians, governments and the press in the western world will embrace this new direction. The term MINT is easy to remember and they all represent attractive and interesting travel destinations. Soon we will see an increase in the trade missions heading for these countries. We will all be invited to join and there will be tax funded incentives available if we do.
Think twice!
When all the opportunistic gold diggers head in a certain direction it may be a good time to walk in the opposite direction. Wealth comes in many forms and sometimes it is much better to make your money somewhere else and then convert it to gold later.
MINT: “Maybe I Need to Think” first?
