Forming pools of talent

The use of technology in emerging markets has had some odd effects, but one of the most interesting aspects of recent developments has been the re-emergence of the city-state.

According to Julian Lighton, Cisco's vice-president of strategy and business development in emerging markets, if you look back at the trading networks of the Middle Ages, city-states usually developed when skilled people came together in particular cities, and developed talent pools in specific areas, or "distinctive competencies." That model is establishing itself once again.

"You're going to see the city-states identifying themselves by a peculiar set of competence," he says.

"They're going to provide, probably, an extremely liberal tax and economic environment. That's typically what you see in Dubai, and Singapore and Hong Kong, etcetera. I'm not talking social; I'm talking economic. In doing that, they're going to start aggregate talent."

In Dubai's case, Lighton says what the emirate has done is build expertise around real estate development and financial markets.

"Together with Hong Kong, these are the two most distinctive places you can go to find real estate developers," he said. "So you have these competency centres where everyone is going to have to go."

Vertical skills

The acquisition of talent isn't just a short-term effect either. If Dubai can build a big enough talent pool, that will give the emirate "a very deep set of significant vertical skills" that will make Dubai sustainable for years to come.

That all the city-states are developing in emerging markets and not in the developed world is significant, Lighton says.

None of these distinctive competencies that have been developed has anything to do with Europe or the United States, and more have leap-frogged or simply reinvented things the West was good at.

"When you look at the intelligent buildings in Dubai, when you look at the Burj, I don't think a western company could build that," Lighton said.

"They don't have the will to build that building today, and that is what I think you're seeing. That's what you're seeing in China, that's what you're seeing in Singapore, that's what you're seeing in Dubai. You're seeing a will, a competency, an aggregation of talent and an economic model that makes it compelling."

According to Lighton, the real beauty is that while Dubai and the other city-states have become successful due in part to the ICT infrastructure, that same infrastructure will allow them to stay competitive.

"You no longer have the limits of 'I have to go across that mountain' or 'I can only deal with the supply chains that are local.' None of those limits exist anymore. You can build anything anywhere, so it's really up to the distinctive competencies of the population."

The innovation that allowed Dubai to build competencies has also spilled over into the financial markets, Lighton says.

"I think what you're seeing is a melting pot of new types of ways of financial, new type of investing, new types of thinking about what finances should actually do, some of which actually has a very good social responsible side," he said.

The innovation in financial markets has resulted in innovations in security too.

The financial markets of Dubai, Qatar and Bahrain didn't wait around to be audited, but instead began developing the most secure systems possible for payments, transfer, etc and demonstrate that "they were are entirely clean to absolutely everybody".