In the modern world, "Innovation" has become a need for survival for organizations, whether they are technology based delivering goods and services or they are consultancies for management, finance and economics. Innovation is broadly defined as a process of creating efficient and effective solutions that would enable greater benefit to organizations and in large various members of society. It refers mostly to a notion of improving or creating an efficient solution than generating novel ideas. With changing dimensions in global markets, organizations are facing tougher challenges in trying to keep up their competitive position. They are forced to develop newer products and services and deliver them quickly to market to maintain their competitive edge. This has created a huge need for companies to stay focused on their ability to innovate not just with their products but within their processes. While stagnant markets of developed countries may not encourage huge innovation, remarkable growth in developing markets recent times, under tough conditions is forcing multi-national organizations to be more innovative and to increase the realm of their market.
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While, at the outset, innovation could be seen applicable for research and development only, it could be applied equally across various functions of product development. Organizations who have imbibed innovative culture have demonstrated innovation in strategic planning, product design, sourcing, supply chain, manufacturing and operations, marketing and sales, customer support and finance. The dynamics between these functions within, the organization's structure and support system all play important role in creating an innovative culture. With the need to innovate being a norm, organizations have divested their investments on innovation across functions in various areas like introducing market focused products, frugality in product development, process improvements on reliability and stability, reducing time to market, creative marketing for better positioning, etc.
Joseph Schumpeter, the economist who coined 'creative destruction' in 1950s, believed that innovation would always come from large firms that have sufficient capital to invest on it. Innovation promotes Creative Destruction, a principle that states that innovation is not just an accumulation of knowledge and inventions over time, but it replaces incumbent ideas, business models, products, entire companies and sometimes markets. However, in today's world many see it differently. Large organizations are seen to believe in innovation, which is more evolutionary in nature, while smaller setups or startups are more often associated with disruptions.
A stronger rationale that could be associated to this is, for larger organizations with a strong customer base and fixed revenue streams, a disruption could prove to cannibalize its existing business models and the revenue from cash cows could get affected. The long term benefits of disruption could always be speculative due to its novelty and hence the risk seems to be too high. Also, the larger organizations face political challenges like managing jobs, justifying investments in past, need to maintain regulatory norms, fear of sanctions related to subsidies and incentives from government, etc. While the smaller setups are not sensitive to many of these issues, they are free to be more disruptive in their innovation modes. Hence in many cases it can be said, organizational success becomes an obstacle for nature and amount of innovation.
The influence of customer in innovation process is always debated with two strong compelling views. While many believe innovation starts with customer needs and the innovations are essentially evolutionary in nature based on the need, they argue that even though many innovations sound to be revolutionary, it is just that the element being innovated is not incremental from its predecessor, the need always existed. There is also a stronger school of thought that customers do not know what they need. It's only after a solution is present that one would start thinking about problems, the classic example given in this case is of Apple's iPod which is seem to be a greatest disruption ever which was never seen or needed by customers before. However, it could well be argued that iPod emerged in the age when portable recorded music players (Walkman) and mobile phones coexisted and a convergence of 'Walkman' to pocket was a need. While it would not have been explicitly needed or spelled out by customer, the need existed.
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With the need for increased focus of customer driven innovation in a changing world being established, the multinational enterprises are confounded with a major problem of defining a strategy that would fit across geographies. The strategy that would help win local markets in emerging markets, while being applicable in global context is the need of hour. The phenomena of "Reverse innovation", where an innovation is first designed and adopted to emerging economy and then trickled up to developed countries, has started to get popular in this context. While as of today, there are not many examples of successful products, the theory sounds promising and is seen to help organizations get a sustainable competitive advantage. However, the theory raises several interesting questions about what are the innovations that could survive, why will they diffuse across other economies, how does this affect the global strategy and organizational structure of multinational firms.
History & Evolution
While the innovation in the west started in eighteenth century alongside its industrialization, the process has been streamlined by the early twentieth century with organizations institutionalizing their innovation capabilities with more focused R&D departments and standardizing the process.
Organizations had their focus initially on "identified" markets for their innovation. The identified markets could be defined as existing customer base, or a new customer segment in an existing market. This belief was based on "Paretto principle", which states that 20-30% of the total customers are the key elite, who help profitability. Organizations strived to innovate and create products which meet their needs and believed that these could be a fit to a majority. For example designing a product to meet an American customer could automatically fit to the ones in Europe and Japan with a slight local adaptation. The affluent customers from "poor" countries always tried to reach out to these products. The focus at this stage was mostly to increase the market base abroad for the existing products. This stage was called "Globalization". A term associated to similar markets spread across different economies where the same sets of products are sold. The primary advantage of this strategy was achieving economies of scale and tapping customers from newer markets. The "Globalization" strategy had issues related to competition that the multinationals faced in local markets. They could not meet the mass market needs across markets and hence they had very limited market share.
The next step of evolution was when organizations started focusing on increasing their market share. The strategy adopted at this stage was to design products that originated from needs of home country but would have ability to modify or adapt to local market needs. Many times, it was also seen as de-featuring the products made in developed countries and selling them in emerging markets to meet the price pressures from the local competition. This process was called "Glocalization". Typical glocalized products were seen to be successful where the markets are broadly similar in nature. Organizations started creating "Scalable" platforms to manufacture products and this model was proved to be profitable with a right tradeoff being defined between scalability to global needs and local customization. The "Glocalization" strategy had a major issue that it had over dependence on developed western markets as the only key customers and it saw emerging economies as its key customer base. It was due to this notion that the organizations could only tap the "Top of the pyramid" in developing countries which is only less than 10% of the overall market size.
The changing economic landscape fuelled by economic growth of developing nations made "Glocalization" to lose its relevance. The global economy started getting equally shared by markets on both developing and developed worlds. However the customer base of these markets is widely different. The per capita income and spending trends of an Indian customer is far lower than that of an American customer. However, the presence of large market of Indian customer, owing to its huge population, makes it a "mega market" with "micro customers". Organization started realizing the huge potential that these markets have and a need to focus on tapping into "Bottom of Pyramid" of these countries. The focus now is not just on increasing the share but creating a larger market.
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The first step that many global organizations took in this direction was to promote "Local innovation". The idea here is to take a "market- back" approach. Organizations began to start with understanding the needs of local customers and try and build solutions to cater to unmet needs using the global resource base that they have. This methodology started to prove more relevant in developing countries where the new products coming from global organizations were very well received.
The focus increased on local research and development and local marketing power to cater to local needs. However, the key issue here was to manage existing product lines and ensure the products are positioned correctly to be able increase the portfolio, instead of cannibalizing the existing ones.
The next stage of innovation, where the organizations matured into was "in country, for the world", which is the reverse innovation. At this stage the organizations started focusing on taking the innovations that are originally developed for emerging economies and fit or adapt them into worldwide use. This sometime could mean scaling up of some features and more stringent regulatory requirements enforced than what were considered when developed for local markets. Also a key prerequisite would be that they are successful in local markets.
Changing world & Issues with Innovation in Organizations
Innovation was one of the key reasons for the Industrialization of the west in 19th century. Many great impactful innovations of these times came from the scientists, explorers, farmers and industrial pioneers, from Thomas Edison to Benjamin Franklin to Henry Ford to Cyrus McCormick to Wright brothers, all of them had mastered their own art to generate products based on innovation. This spurred the industrial revolution leading to economic leadership of the west which lasted for almost the entire century.
As the world crepe into Second World War, Industrialization rapidly expanded in North America and Europe. This forced the industries to structure themselves into process driven, systematic and predictable working machineries. This forced the institutionalization of various disciplines within each industry including innovation. Innovation capabilities were centered on the R&D departments and they had standardized processes defined to take idea conception into product.
This structured approach helped the firms to plan for greater focused budget allocations on innovation, control the access of its information and standardize the process across different geographies where it operates. These strategies help firms become greatly successful through the early part of 20th century, forcing them to believe in this structured approach as gold and hence started the stage of creative accumulation. R&D focus was mostly on generating incremental improvements to the existing product streams and capitalizing the existing competences to the fullest. The technology used by the firms was stabilized and the advancement was solely along the trajectories followed by the fixed technology. These large firms operated in markets where entry barriers are high, due to both appropriation and cumulativeness of knowledge along with higher costs for innovation. The past innovations made by the firms were seen relevant and hence focusing on structured approach to incremental innovations.
The initial success led the firms to believe they could deliver more innovation with more resources supplied. Since the financial and natural resources are scarce to come by, more innovation meant increase in the effective cost and hence customers started paying hefty premiums for each of the new innovation the firm generated. In 2010 alone, the top thousand companies in the world spent $550,000,000,000 on their R&D capabilities. However, there is no strong correlation seen in these firms with respect to the amount of budget allocation to the number of products developed. Hence it could be wise to state- Money cannot buy innovation.
Structured approach to innovation lacked flexibility which is heart of innovation. The standardized processes like Six Sigma promote 'Sameness' doctrine, which enables organizations to be stable and more predictable. The creative destruction that arises from naÃ¯ve innovations does not fit into organizations, as the structure was too deep and these innovations were seen as competence destroying discontinuities, which are too expensive for organizations to handle. Moreover, creative accumulation forced the organizations to order their thinking into a fixed framework giving very little room for destructive innovations. Classic innovations that are born in disorderliness are restricted to very small firms from new entrants who could afford to leap into path breaking technologies. However, they die down premature in both Blue Ocean and Red Ocean markets due to their inability to meet the value -cost tradeoff that comes with the scale.
Many large firms believe that holding the intellectual property firmly within by insulating key technologies would help them win the market place. However, the downside of this is that the innovation around this space has been made insular and is forcefully restricting the access to few elite. This would mean that the ideas cannot be found, shared and integrated even within the firm and with their customers. The ideas coming from non-R&D divisions die down or cannot be percolated up due to this very insularity within the organization.
Today, about 85% of world's population, 5.8 billion people, live in the poorer countries with majority of them in China, India & Brazil. However in terms of growth rate measure, total gross domestic products (GDP), these economies are growing faster, at least double the rate than the developed nations. Hence it is estimated by IMF, that within a decade, the two-thirds of world's GDP would come from these "poorer" countries. This means there will be heavy increase in spending patterns in developing countries like China, India, Brazil & Russia. Hence, these "poorer" countries as now considered as "emerging" economies, which require a lot more focus by the firms from the west.
This meant that the firms who practiced structured innovation focusing on developed economies of the west are facing challenges to meet the new needs of "global" customers. Delivering flexibility with cost efficiency to customers worldwide is the greatest challenge that firms are facing today.
The customers in "emerging" economies are focused on the superior value generated from a product than the cool features or the latest technologies offered by it, which matter to their western counterparts. The cost conscious buyers have stronger bargaining power, the market in "emerging" economies are the middle and lower middle class population who have low earning profile but a very stronger yearn for goods and have greater willingness to buy. The huge population of this section offers a unique opportunity for the organizations to tap-in and generate greater revenues. A classic example of recent times is Danone, the world no. 1 in fresh dairy products, recently flexed their strategy to tap the emerging economies. Instead only introducing localized versions of their diverse global products, Danone chose to understand the needs of Bottom Of Pyramid (BoP) and hence came up with innovative packaged Lassi with three flavors - masala, sweetened and mango, each at Rs 15 for 165ml. This was created uniquely for Indian market to reach out to masses.
Hence today, in order to stay competitive in the changing world, firms should be prepared to address the needs of developing countries, specifically those in "emerging" economies, than trying to import from developed world. Hence a need to revisit a structured style of innovation exists.
Reverse Innovation - Definition
Vijay Govindarajan and Chris Trimble, in their book on Reverse Innovation defined the term "Reverse Innovation"; they defined it as any idea which will be first adopted in developing world. This phenomenon historically was not very common for a simple reason that the rich and affluent that had the ability to demand were mostly concentrated in developed nations. Demand drove the technology forward and hence most of innovations happened in the west. United States and Germany have about 300 noble laureates in science and technology, while India and China who are six times in population have less than ten of them in total. Most of the solutions that were innovated in the west were hence imported. Slightly modified versions of the global products, mostly their low-end were "Glocalized" and were seem to be most relevant.
This view, over time, is seemed to be no longer accurate. The nature of consumers in developing nations is lot different. The needs of affluent customers in the west are lot different from those in emerging economies. Emerging economies have mega markets with micro consumers. Simply put, these markets are dominated by ten customers who could afford a dollar that one customer willing to spend ten dollars. Hence, Reverse Innovation requires a thorough understanding of the gaps in the needs of the customers in emerging economies.
The five needs gaps, as identified by Vijay Govindarajan et al, as the starting points for reverse innovation opportunities are:
Performance Gap: The classic thinking of "low cost" design has been stripping down the features of an existing product and offering this lower performance version at cheaper price. This stream of products do not capture greater market share in "emerging" economies, because of the knowledge of breakthrough technologies available in these countries and unattractive performance gap. This is counter to the philosophy in the west, where a customer agrees to buy lower performance products for lesser price. Hence creating a disruptive cutting edge technological solution with decent cost and lowest cost could capture greater pie in emerging economy market.
Infrastructure Gap: The developing countries do not have similar infrastructure settings available like in the west. The existence of well-developed infrastructure in the west forces one to rely on legacy systems and build solutions around or over it. However unavailability of infrastructure, offers a greater opportunity for firms to start on clean slate and adopt (setup) state of art and high tech solution first time. While this gap is getting narrower between both the worlds, the emerging economies have leapfrogged on existing available high tech solutions and are venturing in as early adopters for highly scalable futuristic cutting edge solutions.
Sustainability Gap: In order for firms to sustain, the challenges one faces might be different in both the worlds. The concerns related to environment and pollution are quite different in China and India as opposed to that in United States and hence the needs of the people in these countries could be hugely different. The mass consumption in the emerging nations is not met in environmentally friendly way, the result could be catastrophic, hence the products designed for here need to be ahead by several miles in terms of their "green"ness.
Regulatory Gap: Today there are not many strict regulations governing innovation in developing nations as compared to the developed nations. While this gap could get narrowed with time, when there could be more stricter regulations being applied to make markets fairs and consumers safe, currently the additional overhead added due to regulations is minimal here. This could prove to be a huge advantage in terms of faster innovations with lower resistance. Any simple and inexpensive solution could be launched into the market quickly with least resistance.
Preferences Gap: The tastes, practices and rituals followed across the world are difference and so are their preferences. This gap would remain for long, since the anchors that drive them are deep routed. Hence its critical for the firms to understand the "local" preferences and address them that assume them to be similar across the globe.
While these gaps clearly establish that the consumers in developing nations need to be looked as the unique set of parameters, most of these needs are not very new in developed world. Every developed country also has a marginal market with needs similar to those of developing countries; historically the large multinationals have been ignoring them given the size of that market. Hence it can be well understood that, a product designed to bridge the gaps above could well be fitting into the marginal markets of the developed countries.
Most relevant example could be of Tata Nano, one of recent innovations in India of a Car at an ASP of about $2500. This ultralow cost was only a result of a lot of new designs, frugal engineering and innovative supply chain partnerships. At the outset, this experiment was aimed at the capitalizing the growing Indian (lower) middle class market, of whom about 60% could afford it now, who would otherwise not have dreamt of four wheeler. However TATAs are seeing this car also being "export" ready to tap into the marginal markets of the west.
Another similar example could be drawn on "micro finance" model. Historically banking has always been focused on addressing the needs of "rich". Globally most of the successful banks failed to consider the opportunity to be able to lend smaller amounts to poor and enable them small business capitals. While this has a greater social implication of creating a better ecosystem, the smaller quicker returns coming from larger number of customers could turn banks profitable! This was proven by Grameen bank in Bangladesh. Muhammad Yunus had won a noble peace prize for pursuing the microfinance revolution in Bangladesh. This solution is now getting popular in west, where many large banks.
These are classic cases of business innovations that are created primarily to address the needs in the developing worlds while still being seen relevant in global context, in terms of the untapped markets in the west.
Reverse Innovation's state of art in various organizations world wide
Case studies of successful business models that implemented reverse innovation
Reverse Innovation as a process
While the traditional innovations assume that the resources available are redundant, the reverse innovation at the outset assumes them to be scarce. This assumption forces one to think of the solution to be improvised solution using ingenuity. Most often the reverse innovation could begin with reverse engineering and come up with flexible solution to meet the challenge of shortage of resource.
Innovate on process not just products
This section would cover following aspects:
Process steps required to build reverse innovation adaption
Key aspects to consider while creating products using reverse innovation
Reverse Innovation & Organization's brand management.
General Electric's Chairman Jeffrey R. Immelt, says - "Reverse innovation isn't optional; it's oxygen." As a pioneers of conceiving the idea of Reverse Innovation, he firmly believes in today's world, reverse innovation should be seen as a way forward for organizations across the globe, to capitalize on global economic situation.
The approach of Glocalization is very popular because it works. Many companies from the developed world invented several great products at their home and distributed them across the world. The key tradeoff for local customization in price sensitive markets was to ensure that the efforts on customization would be optimal enough to achieve decent market share while not affecting the global scale. The assumption here is that the developed markets form the majority of market and the rest of the world, developing countries, had few pockets of customers who could "afford" them. This assumption was worked until the beginning of this century. As world progressed into 21st century revenues generated from the "rest of the world" increased due to Glocalization. In 1980, GE had about 19% of its revenues come from outside United States; this towards 2008 grew to be almost 50% by 2008. While the greater growth rates in the developing countries attributed to the increasing share of revenues, the key challenge for the organizations was they were tapping only a "top of the pyramid" class in these markets and the needs of the price sensitive middle and lower-end of the customers were not met.
The faster pace of evolution of developing countries allowed them to quickly adapt to latest cutting edge solution for infrastructure related problems. This created a unique need for organizations to innovate high tech solutions with decent performance at low prices with greater sustainability. These aren't the same needs for majority of customers in developed countries; however organizations started realizing that there are untapped marginal markets in west with similar needs which were never addressed.
Another major challenge for the organizations from the developed countries was the competition from the "emerging giant" firms from developing countries like China and India. They have the advantage of starting small and creating their innovation structure around the "price-performance" paradigm. While they could be restricted in the developing country markets only, it might not be very long for them to go "global" and eat into markets of these established firms.
Adapting solutions based on reverse innovation could be much easier for these competing "local" firms, but for the global organizations it creates a unique set of organizational challenges. Many multinationals have setup organizational structures that are more centralized to their global headquarters with their structure and practices in emerging countries to be product focused with their responsibility restricted to selling, distributing and servicing global products locally. The major problem, as described by V Raja, head of GE Healthcare's business in India, is this deeper conflict in directionality between Glocalization and Reverse Innovation. The local functions are usually made accountable for a delivering on plans with greater revenue growth and slower the cost growth rates. While many of the multinationals have their Research & Development centers in emerging countries, their focus remains mostly on catering to "global" needs. This setup which was built for Glocalization makes reverse innovation impossible.
Hence, for reverse innovation to become real, it requires the organizations to change their business models not just their products. It means this strategy should be adopted from very high level to create local growth teams (LGTs) in developing countries giving them greater responsibility and power to decide on products needed for local markets, strategize around how to build, sell and service them locally while being able to capitalize on firms global "resources". These products once proven to be successful locally, could be made available across by identifying the right proposition in terms of 4Ps, that is identifying specific applications based on product's specifications, identifying the right marginal market places and promoting them accordingly at the right price points.
Branding strategy in emerging countries
While promoting the reverse innovation is critical, the organizations should realize that the Glocalization shall remain the dominant strategy for some more time to come. This means that the organizations should be sensitive to manage their resources to be focused on both streams. The positioning of various products becomes critical in order for both the paradigms to coexist and compliment. This means that the organizations need to manage various products lines carefully to ensure they do not cannibalize into each other.
The greater challenge that the organizations in emerging countries face is to manage the brand salience effectively where both glocalized and reverse innovated products exist. The key measure is to create an effective brand product matrix and cover the reverse innovated products by positioning them to cater to segments of lower base of pyramid which are not covered by other brands within the firm. These could be turned into potential flankers, if provided with significant resources. Hence the branding strategy with reverse innovated products if managed effectively shall enlarge the pie than increase the pie in existing market. Increasing the pie of existing market, could mean eating into the potential share of the glocalized products, hence cannibalizing into each other. Glocalized products remain as cash cows for the organization, hence the existing managing existing customer base is critical.
Another key challenge would be related to Brand Image, while the image of multi-national firm's brand could be related to its history and heritage in developed countries, it may be almost nonexistent in the targeted markets in developing countries, simply due to the facts that the attributes that are associated with the firm's brand may not appeal to customers in the lower end markets. Hence the firms, unlike in developing countries, will have challenge to create a clear brand association from scratch to make it into their consideration set.
The case of Nokia and Motorola can be discussed in this context. With India growing as one of the fasted mobile handset market, both these mobile giants entered into Indian market, while Motorola focused reducing the price and associating itself with the local service providers to increase its distribution network, Nokia focused on understanding the critical need for Indian customers and trying to build an image around those key attributes alongside increasing its reach nationwide. Higher battery life, dust resistance, localized language support along with lower costs were the focus for Nokia and within no time, it successfully introduced locally manufactured Nokia 1100 featuring a flash light, much needed for power starved India rural areas. Nokia also invested heavily with ads featuring celebrities to position itself in the minds of India customers for the given set of attributes. This helped Nokia win a majority market share ( over 50%). Motorola had problems related to lack of profile, since it was more associated to the carrier network, realizing this gap Motorola started investing into both research & development along side with heavily into advertising in India to create its own profile.
The organization's brand needs to be managed effectively for the product lines where both glocalized and reverse innovated products exist. An effective brand product matrix should be established; where the reverse innovated products are covered by appropriate branding.
They will also have to manage the product matrix
This section would cover following aspects:
Should the structured innovation complement the reverse innovation?
What is the effect of reverse innovation on organization's brand?
What are the possibilities of brand cannibalization?
Overall, the challenges in brand management with reverse innovation
Reverse Innovation & Brand India.
Today, India is one of leading emerging economies of the world. Despite challenges related to extreme shortage of basic needs like food, water, energy (power), education and healthcare along a less effective political system, India is able to face these challenges and grow reasonably well under tough global economic conditions. The Indian mindset helps face and solve complex problems with simple solutions and frugally. This aspect is not only helping India face complex problems but is creating a greater brand for it across the world.
Reverse innovation has been taking the industrial revolution in India further ahead. India has not only witnessed higher number of Foreign Direct Investments (FDIs) flown in to create products and services relevant within and globally. It has also created a greater opportunity for indigenous firms like to go multinational with their solutions. This has increased the overall investments in R&D across, leading to cutting edge technological innovation coming out from India. Indian engineers are getting opportunities locally to work on products built for local customers and this has brought the overall price of production low.
Tata Motors - Tata Nano
While companies like Ford set up its global automobile platform in India and catered to the niche premium segments in India, Tata introduced the Tata Nano for the price conscious consumer in India in 2009. Tata plans to launch Tata Nano in Europe and U.S. subsequently.
GE - GE MAC 800
GE's innovation on the GE MAC 400 to build a portable low-cost ECG machine to cater to the rural population who cannot afford expensive health care was launched as an improved version a year later in 2009, in U.S. as MAC 800.
Procter and Gamble (P&G) - Vicks Honey Cough - Honey-based cold remedy
P&G's (Vicks Honey Cough) honey-based cold remedy developed in Mexico found success in European and the United States market.
Nestle - Low-cost, low-fat dried noodles
Nestle's Maggi brand - Low-cost, low-fat dried noodles developed for rural India and Pakistan found a market in Australia and New Zealand as a healthy and budget-friendly alternative.
Xerox - Innovation Managers
Xerox has employed two researchers who will look for inventions and products from Indian start-ups that Xerox can use for North America. The company calls them as 'innovation managers'.
Microsoft - Starter Edition
Microsoft is using its Starter edition's (targeted at not so technically savvy customers in poor countries and with low-end personal computers) simplified help menu and videos into future U.S. editions of its Windows operating system.
Nokia - New business models
Nokia's classified ads in Kenya are being tested as new business models. Nokia also incorporated new features in its devices meant for U.S. customers after observing phone sharing in Ghana.
Hewlett-Packard (HP) - Research Labs in India
HP intends to use its research lab to adapt Web-interface applications for mobile phones in Asia and Africa to other developed markets.
Tata - Swacch - World's cheapest water purifier
Swacch means clean in Hindi. Tata launched the water purifier - Tata Swacch targeting the rural market in India with the cheapest water purifier in the market. The product does not require running water, power or boiling and uses paddy husk ash as a filter. It also uses silver nanotechnology. It can give purified water enough to provide a family of five drinking water for a year.
The company feels it will open a whole new market.
Husk Power Systems
In India, Husk Power Systems brings light to rural population (over 50,000) by using locally grown rice husks to produce electricity (a unique and cost effective biomass gasification technology). The company has also received seed capital from Shell foundation in 2009 to scale up operations.
LG - Low-cost Air Conditioners (AC)
South Korea based LG Electronics (LG) planned to develop low-cost air conditioners targeting the middle and lower-middle classes in India. Their goal was to manufacture air conditioners at the cost of air coolers, which were very common.
From India stand point, besides having more and more firms turn in Original equipment manufacturers (OEMs) and be profitable, the overall eco-system would see greater benefits. The need for tier I and tier II suppliers would increase. Higher need for technology vendors would increase research collaboration with education institutions. This would facilitate an unprecedented growth in technology solutions to complex engineering challenges, leading to overall economic growth and sustainability.
This section would cover following aspects:
What are the reverse innovative solutions that emerged from India?
Is there (would there be) a correlation to reverse innovation to India's sustained economic success?
Will made in India brand become stronger?
Few case studies of "glocalized" products from India and their reception across the world.
Brand analysis of "made-in-india" for reverse innovative products
Process of test marketing, launching, lessons learnt and how firms finally launched nationally.
Analysis of how much time did the firms take to take such innovations to other countries
Based on the research, the conclusion would summarize
the key aspects of the need for shift in innovation,
The reverse innovation as the solution
The criterion for success with reverse innovation
Industries where the process could be most relevant