By John Moore, Special to

NEW YORK ( CNBC) -- As demand for technology rises in the larger emerging markets, U.S.-based companies will find more opportunities to export their products overseas.

But with innovation also on the rise in these regions, lower barriers to entry, and cultural factors that favor homegrown companies in some industries, the expanding consumer marketplace also creates challenges that could chip away at the United States' dominance of the technology industry.

Jeffrey Donlon, portfolio manager of the Manning & Napier Technology Series Fund, says several emerging markets are in the middle of a long-term shift from primarily export-driven to consumer-driven economies. That transition is driving the need for new technology companies to serve consumer demand.
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"Consumer-driven aspects of emerging market economies will become a larger percentage of their GDP," say Donlon. "A great example is travel. There's a lot of innovation occurring in China and India around the travel space that's technological, leveraging the Internet, data center, and IT systems-based technologies to create more efficiencies in that industry."

The ability to innovate is the key.

As Warrant Tennant, portfolio manager of the Invesco Technology Fund, points out, the United States has dominated the global tech sector because it's been the leader in innovation -- whether it's personal computers, software or the Internet.

Much of the advances in those areas, however, have dramatically driven down the cost of innovation in general.

"Five years ago, let's say the cost and knowledge base that was necessary to set up a medium-sized company up and running was $10 million to $20 million," Tennant explains. "Today, the cost is one-fifth to one-tenth of that. Because of the Internet, you don't necessarily need all the installed licensed software you needed before -- you can use software as a service. Before you had to have your own storage area network and have people who had the expertise to manage it. Today, you can lease space in a data center extremely cheaply and have them handle all of it for you."

Formulas for Success

The Internet has provided the biggest opportunity for new technology leaders in developing markets. As developing nations produce more technology consumers, the opportunities for online commerce and online advertising is on the rise. And companies involved in online commerce typically follow the lead established by U.S.-based companies.