At first glance, China, which is known for large, often inefficient state-owned enterprises, might appear an unlikely source of fresh management thinking. Yet Chinese companies have a lot to teach the world about today's business imperatives: responsiveness, improvisation, flexibility, and speed. To cope with their turbulent environment, the Chinese have developed those capabilities and learned to build everything--from skilled recruits to suppliers to capital sources--from scratch. They manage very differently, too: Eschewing Western-style matrix organizations, they favor flat, loose structures that allow them to jump on new opportunities and expand quickly. They roll out new products constantly and localize offerings with a vengeance. They're also adept at nonmarket strategies, particularly navigating local politics and relationships with the state. Indeed, China's entrepreneurial companies may well be the vanguard of an era in which the ability to adapt quickly, navigate messy environments, and use unproven talent yields a global competitive advantage.

Emerging economies are often thought of as environmental laggards; they're perceived to be focused more on addressing poverty than on protecting the planet. But when the Boston Consulting Group and the World Economic Forum went looking for the best sustainable business practices in the developing world, their researchers uncovered many visionary enterprises that defied that stereotype. These organizations show that in markets where resource depletion is most keenly felt, conservation efforts can be a wellspring of innovation--and a source of competitive advantage. Some of these enterprises pursue sustainability out of pragmatism; some out of idealism. But all have consistently generated above-average (and in some cases, astounding) growth rates and profit margins. They've achieved them by following one or more of three general approaches: (1) taking a long view and investing in initially more-expensive sustainable operating methods that eventually lead to dramatically lower costs and higher yields; (2) bootstrapping--making small adjustments that generate big savings, which then fund purchases of advanced technologies; and (3) extending their sustainability efforts to the operations of their customers and suppliers (and in the process, devising new business models). Collectively, these companies demonstrate that there need be no trade-off between sustainability and financial performance. Rather, the pursuit of sustainability can be a powerful path to reinvention for all.

In the 20th century, Japanese multinationals established themselves as powerhouse exporters in developed markets. Names like Sony, Toyota, and Honda became commonplace. But in this century, growth in developed markets has slowed: Goldman Sachs forecasts that these markets will grow at an average annual rate of 2% until 2020, whereas the BRIC economies are expected to grow at an average annual rate of nearly 7%. To prosper now, Japanese companies must win in developing markets--which they're failing to do. They face four key challenges: distaste for the middle and low-end segments of the market; aversion to mergers and acquisitions; reluctance to commit--financially and organizationally--in emerging markets; and a failure to properly allocate talent. Two Japanese multinationals stand out for their success in overcoming the challenges: Unicharm, a manufacturer of personal-care products, and Daikin, one of the world's largest air-conditioning manufacturers. This article explains what they've done.

It's well known that China has been working to spur domestic consumption. But it's making faster progress than many outsiders realize; for example, China is already the first or second largest market in a number of important consumer categories. Here are some trends Western multinationals should be aware of, along with advice on how to better position themselves so that they don't get left behind.