Strange Bedfellows: Reverse Innovation Marries Multinationals with the Concerns of the Emerging World

Reverse Innovation: Common Goals or Merely New Growth Channels?

Reverse Innovation: Common Goals or Merely New Growth Channels?

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As the push for Innovation spreads in both the profit-focused industry sector and in circles focused on social innovation in the emerging world, two distinct camps have developed and worked relatively separately in recent history. Can the multinational  drive for profitable growth and public-sector innovation both work in harmony as

As the push for Innovation spreads in both the profit-focused industry sector and in circles focused on social innovation in the emerging world, two distinct camps have developed and worked relatively separately in recent history. Can the multinational  drive for profitable growth and public-sector innovation both work in harmony as a force for development and social good?

 

In recent years, these two disparate camps are making strange bedfellows as they find a common goal in the emerging concept of Reverse Innovation. Coined by scholars Vijay Govindarajan and Chris Trimble, Reverse Innovation centers around the idea that innovative acts can start, quite successfully, within emerging markets. In the past, such innovative priorities and acts have been conceived in developed, rich economies, then have been stripped down or retro-fitted into generic, less expensive versions for emerging economies. In the past, “Western” firms like Toyota have filtered their products down to emerging economies, only to come up short. As Ford sought to bring stripped down sedans to India, they failed to get to know their market on a local level. Such attempts at expanding profitability with a generic offering have landed companies like Ford in hot water with little to show for their efforts. Taking a different tact, Tata came into India, not with a stripped down “Western” car, but with questions about what poorer Indians really needed in a vehicle. While Ford vastly underestimating both the income gap and specific needs of these groups, Tata produced cars at such a low price, people beyond India are watching their rapid progress.

 

As concepts around Reverse Innovation emerge, Govindarajan and Trimble ask multinational corporations to look, in line with Viktor Papanek’s Design for the Real World, at the local needs of emerging economies. Reverse Innovation encourages the rich world to listen and learn, emphasizing the importance of working with people on the ground. True involvement with emerging communities and economies means prioritizing local engagement and nimble processes that change the way business is done. When the need to create more with less becomes not only novel but critical, concepts revolving around Reverse Innovation have a much wider application for innovation-oriented businesses of all sizes located all over the world.