Looking for new ideas? Get yourself to the developing world
From jeans to medical devices, products from India and China are disrupting markets in the West.
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So GE engineers in Bangalore designed the MAC 400, which is hand-held, runs on batteries, and retails for just $800. Lawrence says that the product has great potential for poorer rural and urban areas in America, as well as emergency rooms and doctors’ offices.Skip to next paragraph
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Chris Trimble points to another GE product, a cheap and portable ultrasound device called the Vscan that was developed in China and is now for sale in the US. “The current generation of kids is the last one that will need stethoscopes to dress up as doctors,” he says. “The next one will be carrying around these hand-held ultrasound devices.”
Reverse innovation has actually been happening for a long time, according to Mike Grandinetti, who teaches entrepreneurship at Hult. The sports drink Gatorade, for example, was born in 1965 after University of Florida scientists noticed a study showing that carbohydrate-rich drinks helped save the lives of Bangladeshi cholera patients (it’s called Gatorade after Florida’s football team, the Gators, who used the drink to re-hydrate).
But Grandinetti argues reverse, or “frugal,” innovation has a lot of room for growth as consumers and corporations look to cut costs. “Look what’s happened to the global economy,” he says. “There’s no question people are living on different budgets than they have in the past. The West has moved to a different mindset about purchasing, and there are all sorts of opportunities for innovation at the bottom of the pyramid.”
Reverse innovation is, in part, a defensive strategy. Foreign companies like Tata (cars), Mahindra (tractors), Mindray (health care) and Lenovo (technology) are all making cheap products and selling them in domestic and, increasingly, Western markets. If big multinationals don’t keep up, they’ll find their markets have been “cannibalized” by low-cost competitors from abroad.
And Trimble says Western corporations still have a long way to go:
“Reverse innovation is still an emerging phenomenon. Companies are working on it, doing some things – but not everything – right. It’s tough because these are companies like GE, like Pepsi, like Proctor & Gamble, that have grown up in a different world.
“If you look at these big multinationals,” he says, “while they may have both a technology and a sales team in India, chances are they’re not even in the same city. And chances are they report back to different people in the US.”
For Trimble, perhaps the most important take-away of reverse innovation is what it means for today’s students. “For young people to be successful later on,” he argues, “they’ll have to be just as curious about the needs and opportunities of places like Brazil and India and Japan as they are of those in the US. That’s pretty daunting.
“There are places in America that are very worldly. But for the most part, this country is pretty insular, and it’s going to be an enormous challenge for us.”
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