CAT 2021 Question Paper | VARC Slot 1

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Question 23 : 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.

Explanatory Answer

The main idea of the given paragraph is that driven by ambition and fear, developing countries are becoming leaders in innovation and are highly competitive both domestically and globally. Option C touches upon all key ideas of the paragraph.
Option A states that developing countries have invented new business models solely to remain competitive domestically. This is incorrect.
Option B is true but is not as comprehensive a summary as option C.
Option D states that production and distribution models are going through innovations 'worldwide'. The paragraph given only talks about developing countries innovating and transforming.

The 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.'

Choice C is the correct answer.

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