Antoine van Agtmael: The Emerging Market Century

An excellent book stated Swensen about the transformation of third-world makets to emerging markets.


van Agtmael, A. (2007). The emerging markets century: How a new breed of world-class companies is overtaking the world. New York: Free Press.

A banker and investment manager, van Agtmael worked at Bankers Trust with companies in Iran, South Korea, Japan, Thailand, and other Asian countries. One lesson Agtmael learned from his travels, he summarized as "foreign investors would be better off hedging their bets by investing in a basket of markets in developing nations as opposed to a single one" (p. 3). The idea of portfolio investing in emerging markets continued as the unifying theme of the book and the belief that these economies will dominate the economic future.

The author reiterated reports from Goldman Sachs, projecting the growth of emerging markets, the BRICs (Brazil, Russia, India, and China). Agtmael wrote that these countries "will overtake the several largest industrialized countries, the G7 (United States, Japan, Germany, France, UK, Italy, and Canada) by 2040. With globalization as the stage on which the developed and emerging markets compete, emerging market companies have proved the ability to compete, export, and produce on a global level.

Agtmael discerned these stages of emerging market development: "wave 1 foreign direct investment in overseas plants, wave 2 outsourcing and offshoring, wave 3 peer-to-peer emerging world class competitors" (p. 19). From his experiences, he extracted nine lessons. "'Unbundle' an industry by taking advantage of 'legacy thinking' to create opportunities for newcomers; vertically integrate the supply chain by building on related expertise; be a chameleon; turn the outsourcing model upside down; follow a south-south strategy(stay local); solve the zip code problem by going global; use a veil of anonymity by aspiring to be the largest company no one has ever heard of; translate the classic Chinese Sun Tzu war strategy into focusing on a niche ignored by market leaders; offer cheap brainpower instead of cheap brawn power" (pp. 50-55). He examined a number of emerging markets that illustrated each of these attributes.