A growing number of companies are finding that developing low-cost innovations to meet the needs of customers in emerging companies can later be leveraged into disruptive innovations for their most competitive markets in rich countries. Low income countries represent the next big wave of innovation, predicts Greg Satell.
As innovation leaders in industry gather to discuss the front and back end of innovation in a global context, a common theme emerges. Whether expanding to a neighboring country or across oceans, entering a foreign market is always a “beyond-the-core” activity requiring the development of new competencies. One solution: identify skills first, not people.
Though not a new concept, “reverse innovation” is hardly straight-forward in practice. Govindarajan and Trimble’s showcasing of successful projects, Fortune 500-type best practice and essential theory in the field endeavors to lay down a modus operandi, yet one which lacks a lasting echo. In this review Jeffrey Phillips argues that despite its good intentions, the book seems to cater only to multinationals, ignoring the needs of small/mid-sized players whose drive is high, yet resources low. Reverse innovation requires a different mind-set, workflow and altogether pace for socially and economically consistent results to emerge.
Before the radical shifts in technology disrupt the industry fabric, there exists a great potential to appropriate value from the market through incremental product and business model innovations. The less intense the competition, less matured the market – larger is the potential. The emerging markets of the world the BRICs (where s could stand for the plurality as well as South Africa), have long been projected as the markets to invest in. These countries have a thriving middle class; more than a third of humanity, albeit majority poor, should present a great opportunity for companies from the western world. Looking at the Value dynamics, migration to these markets by companies in the western world, particularly India and China, can be considered to have taken place in different waves.