Why Is Reverse Innovation Important?




November 1, 2022

Reverse Innovation applies third-world constraints-driven innovations created for the world's poorer inhabitants to advanced economies. Businesses in the developed world can learn important lessons about how to spur growth by going outside their borders.


A Reverse Innovation Case Study

The heavy machinery giant Siemens experienced a problem when attempting to market its goods in India more than 20 years ago. The equipment required frequent maintenance, which prevented it from gaining further market share. This was challenging due to logistics, expertise, and distance, so the corporation tasked its engineers with creating a version of its equipment that required little to no maintenance, which they successfully did. This strategy was so successful that the business decided to include maintenance upgrades in the equipment it sold to its regular clients in the developed world. This allowed them to lower prices while boosting profit and market share.


Reverse Innovation Pathways

Performance Disparity

Reverse Innovation is frequently linked to product improvements and new capabilities that boost performance. For instance, computers that enhance performance and safety are frequently found in cars made in healthy nations. The high-performance levels in goods consumers in wealthy countries are used to neither expecting nor can afford. This does not imply that they do not need creative ideas or products. It implies that they require goods with unique qualities made just for them.

The company produced only a few basic models and customizations, like adding Hindi text messaging remade via software rather than hardware. Nokia produced a product that provided real solutions for reasonable costs.

The Lack of Infrastructure

A lack of infrastructure can lead to innovative solutions that occasionally go in unexpected ways. The MAC 400, a ground-breaking technology for portable ECG devices, was created by GE in response to a shortage of healthcare infrastructure.

Other Gaps

The sustainability gap, the regulatory gap, and the preference gap are a few more gaps covered in Reverse Innovation. In terms of sustainability, it would be disastrous if 5.8 billion of the world's poorest people consumed and produced commodities in an environmentally harmful manner. For emerging market sustainability, "green" solutions are a requirement, not a luxury. Between emerging and industrialized nations, there is a regulatory gap. Less regulation may lead to less resistance and quicker innovation. For instance, a Boston-area start-up, Diagnostics For All, created a paper-based diagnostic test containing embedded chemicals that react with blood, urine, saliva, or perspiration.

Diagnostic devices influence

Diagnostics For All is a rapid, easy, and affordable replacement for pricey diagnostic devices that demand expert interpretation. The company has launched in less developed regions to avoid the laborious FDA approval procedure. In China, many people use their computer mouse as a remote control to watch television-like content.


How Would Reverse Innovation Help India?

Primarily reverse innovation would lead to a further boom in industrialization. The Indian economy would experience an increase in FDIs as more and more multinationals chose to produce and develop new products in India for domestic and international markets. Additionally, indigenous multinationals would naturally increase their investments to construct cutting-edge R&D facilities that inspire cutting-edge innovation and engineering. It also means the engineers would experience higher employment opportunities, and the consumer market would profit from better products developed to cater to their needs at reasonable prices.


By erasing international borders, reverse innovation brings the "one world, one market" concept closer to reality by bringing together nations and global marketplaces. Reverse innovation would give globalization more traction while boosting the impact of cross-border economic dependency and making cross-border production and marketing viable.

It's not that difficult to put a reverse innovation plan into practice. Allowing "immersion windows" for communications with pertinent business and user groups is something to think about. By mandating that projects cover a variety of topics, MIT ID Innovation ensures the rigor and relevance of their work. Enrolling in one of the innovation courses offered by MIT ID Innovation can be a wonderful first step if you're not familiar with reverse innovation in business.

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