Reverse innovation: a global growth strategy that could pre‐empt disruption at home

Abstract

Purpose

The authors, leading authorities on global innovation, warn that Western companies targeting emerging markets to help drive growth will likely find that the traditional strategy of global localization will prove inadequate. An alternative is their new concept of reverse innovation which this paper aims to introduce.

Design/methodology/approach

One example is the portable ultrasound machine developed originally by GE in the early 2000s to meet the particular needs of the Chinese market. Technology advances have since helped propel the growth of a $250 million business opportunity for GE globally, through finding many new applications in the USA and other advanced economies.

Findings

Historically, multinationals innovated in rich countries and sold their products in poor countries. Reverse innovation is doing the opposite.

Practical implications

Reverse innovation also highlights the potential for very low price‐point innovations originating in the developing world to generate new market demand back in the richer economies.

Originality/value

Reverse innovations can have global impact. Ultimately, they have the potential to migrate from poor countries to rich ones.

Citation

Govindarajan, V. and Trimble, C. (2012), "Reverse innovation: a global growth strategy that could pre‐empt disruption at home", Strategy & Leadership, Vol. 40 No. 5, pp. 5-11. https://doi.org/10.1108/10878571211257122