Friday, January 24, 2014

Reverse Innovation - Innovation from developing to the developed world ..

When I first took this topic for discussion in the class in Alliance university, Bangalore never did I think so many ideas would crop up from the students and I would learn so much.They say the Indian consumer is the most exacting customer in the world, if the operator does not cater to him, the Indian customer ignores him , as simple as that. That is why MNCs are rethinking their strategies to develop items for the developing countries and then move those ideas and products to the developed world.

I found this high value TED talk video on reverse or frugal innovation by Prof. Vijay Govindrajan of Tuck School of Business, NY interesting.. 

Tata Nano is a great example ..

India Knowledge at Wharton in interview mode with Prof Govindarajan

I have been engaging classes in lean Operations and the aspect of frugal innovation of reverse innovation is really great while discussing about Aravind Hospital, Madurai and Narayana Hospitals Bangalore in my Lean Operations classes ..

Prof Vijay's paper in HBR of Oct 2009 with Jeff Immelt, CEO of GE, " How GE is disrupting itself", talks of how GE has taken the lead in this Reverse Innovation by developing medical equipments like the "low cost and high value" desktop ECG for $15,000 and the ultrasound scanner for Chinese market, introducing the same products to western markets and finding novel uses for the same.

The "Reverse Innovation playbook" by Prof. Vijay highlighting the case (HBR April 2012) of Harman Automobile Infotainment division coming up with Saras, a reverse innovated product for the carmakers of the world makes good reading..Prof. Vijay's book title "Create far from home - win everywhere" is self explanatory ..

GE Triveni power turbines from 30 MW to 100 MW ..

Thank you Vijay for this. Even though this TED talk is for the US audience, it is very informative and will make people in the developing world think of innovation and how to take the frontiers of human endeavour and living forward.

An example of Tata Swach, the ultra low cost water purifier which does not need electricity , costs Rs 999 and is very portable.. ..

This is a list of great reverse innovation examples, mainly all of these are from India ..Maggi noodles from Nestle, Tacobell from KFC, Denizen jeans from Levi's, Renault Logan from Rebault and Mahindra, Etios/Liva from Toyota are all great examples .. When Tata docomo, the mobile phone operator came with the 1/2 paisa per second plan for mobile tariffs across the country, all other players followed suit and now the metric for mobile operators have moved from Average revenue per user to Gross / net profits / revenue. With a vast market of almos a billion users ( 3.5 times the US market and about 15 times the markets of Germany, UK, France etc..,)  the possibilities to innovate again and bring value to customers is huge ( at the same time giving fair profits to the operators).

This is Prof. Vijay's idea of a $300 house.. 75 million people in this world do not have a roof above their head when they go to sleep every night. Won't this be a great opportunity for countries to experiment with ?

Here is Prof. Govindarajan's blog on Reverse innovation


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