Emerging Markets Leaders: From Scale to Innovation

Executive Summary

Emerging markets (EMs) have historically been associated with commodity exports and low-cost manufacturing. Those characteristics remain relevant in parts of the investable universe, but the sources of competitive advantage have broadened materially.

Today, a growing number of EM companies compete through technology leadership, advanced manufacturing, scientific know-how and business-model innovation, alongside more traditional strengths in scale, resources and cost. These capabilities allow EM companies to build internationally relevant franchises and, in some cases, shape the industries in which they operate.

For investors, this broadens the opportunity set beyond traditional EM exposures, creating access to companies with globally relevant capabilities and competitive advantages.

Technology Expertise: A Visible EM Advantage

Several of the largest companies in EMs occupy strategically important positions in the global technology supply chain. Their competitive strength increasingly reflects technological complexity, intellectual property, manufacturing know-how and strategic positioning. These companies do not compete based on manufacturing scale alone.

Much of the hardware underpinning artificial intelligence is produced by companies based in EMs. Asian businesses play central roles across the semiconductor value chain, including data-centre infrastructure, memory, connectivity, advanced packaging and third-party foundry services.

EM firms now account for nearly 90% of the global pure-play semiconductor foundry market, highlighting how some of the world’s most valuable technologies depend on capabilities developed in EMs.¹ The leadership also extends to memory, particularly high-bandwidth memory. In the second quarter of 2026, South Korean companies accounted for more than 80% of this market.²

This evolution is not confined to the digital economy. Across industries, EM companies are increasingly influencing some of the world’s most important structural trends.

Powering the Electrification Revolution

These trends include electrification, as the global demand for power continues to rise. This has created a surge in demand for related infrastructure, including electric vehicles and energy storage batteries. Founded as a rechargeable-battery manufacturer, one Chinese automaker entered the automotive market in 2003 and has since built deep capabilities across battery chemistry, power electronics and vehicle manufacturing. In 2025, it sold 4.6 million new-energy vehicles globally, including more than one million units overseas.³

The company’s vertically integrated model gives it greater control over key components, including batteries, electric motors and electronic controls. This can support faster product development cycles, closer coordination of system design and a greater ability to capture value across the supply chain.

The company has developed into a major global participant in electric vehicles, batteries and energy-storage systems. Its progress illustrates how EM businesses can increasingly export the technologies that support broad industrial change—in this case, the transition towards electrification.

Enabling Biologics Innovation

The shift towards more complex biologic medicines and higher outsourcing has increased the importance of specialised partners that can support drug development, clinical manufacturing and commercial-scale production. A China-based biologics contract research, development and manufacturing organisation (CRDMO) has built an integrated platform spanning these activities, supporting customers from early-stage development through commercialisation.

Today, the company is a leading biologics CRDMO with over 1,000 integrated projects.⁴ The company supports a broad and increasingly complex mix of modalities through proprietary technology platforms and processes and scaled digital capabilities that aim to shorten development timelines, improve productivity and lower manufacturing costs.

The company’s development reflects a broader evolution: EM firms are increasingly creating value through scientific expertise, technological capability and operational execution, rather than manufacturing scale alone.

Exporting a Shared-Value Insurance Model

Innovation in EMs is not limited to physical products or industrial technology. A leading South African financial services group has developed a “shared-value” approach through its science-based behaviour-change platform, which seeks to align incentives between insurers and customers by rewarding healthier behaviour.

The model has expanded internationally through partnerships with insurers across multiple markets. The company is also applying related principles in banking, linking certain customer behaviours with financial rewards.

This example highlights another route to global relevance: the export of a repeatable business model. When supported by data, customer engagement and distribution partnerships, such models can create durable advantages that are difficult to replicate quickly. The global reach of this “shared-value” approach is showcased in the picture below.

Conclusion: The New Geography of Corporate Leadership

These examples point to a broader evolution in the geography of corporate leadership. EM companies are increasingly competing through capabilities that can be difficult to replicate, including technological expertise, specialised manufacturing, scientific know-how, scale, data and network effects.

For investors, the implication is important. Businesses that convert these capabilities into durable competitive advantages may be able to sustain attractive returns on capital and retain pricing power over time. The new generation of EM leaders therefore look very different from those of the past: not merely beneficiaries of global structural trends, but companies increasingly helping to build and enable them.