CAT 2021 Slot 1 — VARC Question 24
Directions for Summary: A paragraph is followed by four options which have summarized the passage in their own way. Pick the option that best summarizes 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.
Answer & solution
- A
Developing countries are being forced to invent new business models which challenge the old business models, so they can remain competitive domestically.
- B
Production and distribution models are going through rapid innovations worldwide as developed countries are being challenged by their earlier suppliers from the developing world.
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.
- D
Innovations in production and distribution are helping emerging economies compete with countries to which they once supplied cheap labour.
Easy
Para-summary. The paragraph makes three linked claims: (1) developing/emerging economies are now hotbeds of business innovation; (2) the driver is competition (ambition and fear) pushing them up the value chain; (3) they were once "cheap hands" but now compete and go global. The best summary keeps all three without inventing extra claims.
Option (a) — distorts. "Being forced to invent... so they can remain competitive domestically" understates the scope. The paragraph says they are going global, not merely staying competitive at home, and "forced" overstates the framing. Eliminated.
Option (b) — wrong focus. It centres on developed countries being "challenged" and worldwide innovation, shifting the subject away from the emerging economies' own rise up the value chain. Misplaced emphasis. Eliminated.
Option (c) — complete. "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." This captures the driver (competition), the "cheap hands to innovators" shift, the value-chain climb, and the global move — all in order. Best summary.
Option (d) — incomplete. It mentions innovation helping them compete with former buyers of their cheap labour, but drops the competition-as-driver point and the "going global" climax. Thinner than (c). Eliminated.
The correct answer is option (c).