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Question

The passage given below is followed by four alternate summaries. Choose the option that best captures the essence of the passage.

Developing countries are becoming hotbeds of business innovation in much the same way as Japan did from the 1950s onwards. They are reinventing systems of production and distribution, and experimenting with entirely new business models. Why are countries that were until recently associated with cheap hands now becoming leaders in innovation? Driven by a mixture of ambition and fear they are relentlessly climbing up the value chain. Emerging-market champions have not only proved highly competitive in their own backyards, they are also going global themselves.

Choose the option that best captures the essence of the passage.

This question was previously asked in
CAT 2021 Question Paper with Solution (28-Nov-2021) (Slot-3)
The correct answer is

Competition has driven emerging economies, once suppliers of cheap labour, to become innovators of business models that have enabled them to move up the value chain and go global.

The passage says developing countries, once known for cheap labour, now innovate in production, distribution and business models; driven by ambition and fear they climb the value chain, compete strongly at home and are going global.

The summary about competition driving emerging economies, once suppliers of cheap labour, to innovate business models, move up the value chain and go global keeps every element.

The summary about worldwide innovation challenging developed countries shifts the focus away from the emerging economies themselves. The summary about innovations helping emerging economies compete with countries they once supplied adds a relationship the passage does not state and misses the global expansion. The summary about developing countries being forced to innovate to stay competitive domestically ignores their move abroad.

Hence, Competition has driven emerging economies, once suppliers of cheap labour, to become innovators of business models that have enabled them to move up the value chain and go global.

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