Reverse Innovation
Abstract: Traditionally, innovations found their way from developed to emerging markets in the form of less-sophisticated products at lower prices. The numbers of examples that work the other way around are increasing. It is more and more the case that innovation “trickles up” from emerging to developed nations. GE Chairman Jeffrey calls this tendency “reverse innovation”. Which means to say that since developing and emerging countries have become big and sophisticated markets a growing number of Western companies make use of cheap R&D and low-cost manufacturing in these regions and start innovating locally for the domestic market. Afterwards they introduce the innovations to their Western home markets.
Driver
Social
So far people in developing countries are still underserved by Western companies and therefore often have to look for themselves for innovative solutions that are affordable and fit their specific needs. Slowly companies in developing regions are now becoming aware of these market opportunities and try to adapt their innovation strategies (Bottom-of-the-Pyramid-Solutions)
Economic / Industrial
Asia is expected to be the global powerhouse of economic growth in the future. Especially Asian companies have caught up in many areas and are about to overtake Western player in a lot of market segments and will develop a large amount of new ideas.
Political
Especially Chinese and Indian Governments spent large sums on R&D and promote the foundation of innovation cluster. Furthermore officials support companies to acquire Western knowledge.
Indication
Change in current innovation patterns
Western scientists and consumer will have to accept that they might loose their leading position in innovation. This shift to the East could lead to less financial capabilities in Western economies for innovation. As enterprises become more global networked, the share of scientists from developing countries will also increase and influence innovation processes.
Source
Internet