Nowadays, the world is being globalized.; Globalized or open economy is the one which has liberalized the trade and capital movement (Thorbecke et al 2003, p.154). Thorbecke et al also noted that openness through trade, foreign direct investment and financial market increase the flow of good and capital across the national borders (ibid. p.156). Consequently, most countries participate in international trade as their economies are opened to compete with others. The most affected by this competition are the emergent industries.
Emergent or infant industry is a nuance of industries in their earliest stage of development/growth (Tribe 2000, p.31). Emergent industries can be divided into two groups; : absolute emergent is a new industry which does not exist elsewhere, usually is technology intensive and are predominant in developed countries (Castel-Branco 2002, p.46); and relative emergent industries are often new in the countries of origin, usually developing countries, but in other countries, such as industrialized world, they are already mature or develop (Castel-Branco 2002, p.48). The termsDefinitions of developing economy, under developed or less developed are used to describe countries that are economically backward and that need enhancement of living condition (Sen 1988 p.11).
The essay will analyze the challenges of emergent firms in a context of globalized and underdeveloped world. Because of the narrow scope, the essay will only be discussing three challenges, namely, technology capability, industries reputation and availability capital for investment. Firstly, it will discuss the problems related to technology capability. Secondly, it will examine the role of reputation for emergent industries in national and international society. Thirdly, it will study the influence of capital for investment on emergent industries. Finally, it will state that a better manner to overcome these challenges is through government’s rule to protect these industries.
The first challenge is the access to technology and technological changes. Therefore, tThe capability to access technology affects competitiveness of the industries of less develop world. According to Lall and Pietrobelli (2002, p.1) with the liberalization of trade more activities are being exposed to competition, so the countries have to improve access to technology to continue to prosper and exist in the international market. The problem is, despite the most advances technical knowledge and scientific progress of develop countries are available (Mountjoy 2007, p.81),; the underdeveloped world can not afford it. Moreover, the infant industries in developing countries have to access technology and learn quickly how to use it otherwise they fail in competing with the already established industries (Hewitt, Johnson and Wield 1999, p.14; and Lall and Pietrobelli 2002, p.79).
Furthermore, some industries can have easy access to technology but the human capacities are not up to deal with...