Following on from Sonia’s recent blog, Sharp companies, which details Gillette’s success in addressing the needs of the bottom of the pyramid through “reverse innovation”, Vijay Govindarajan, in the lastest BBC World Service Global Business report, discusses how “reverse innovation” is transforming business opportunities in developing markets – as long as businesses are prepared abandon preconceptions and avoid automatically replicating approaches that have been successful in developed markets. From housing to healthcare, he encourages us to approach new challenges as if we have just landed on Mars. Why does a “housing” unit need to cost $500,000? Why should cardiac operations in the United States cost multiples of those undertaken in India? Although it may be counter-intuitive for Western consumers accustomed to associating price with quality, through scaling up the quantum of medical procedures, expertise gained by medical practitioners and surgeons can actually result in superior outcomes at significantly lower costs – what Govindarajan describes as “…the paradigm shift for value for money to value for many”.
Importantly, “reverse” innovation differs from “frugal” innovation in the role that latest technologies can play in allowing developing countries to leapfrog conventional development patterns. Kenya is a case in point where the absence of fixed-line telecommunications infrastructure has spawned a plethora of uses for the mobile phone, in particular its use in personal banking.
6heads believe that resource constraints, whilst more pressing on a day-to-day basis in poorer countries and populations, should be an issue that frames all our thinking. “Reverse” innovation is not only relevant to emerging economies but is something that we should look to emulate within our own economies. For an engaging discussion on how we can learn from “Reverse innovation”, 6heads recommends listening to the latest broadcast from “Global Business – Innovation from the Developing World”