The Innovation Which is Called Reverse Innovation

Abstract

The traditional studies of innovation have focused on the upward innovation, the innovation whose target is to develop high-end products. In the recent studies of innovation, however, the downward innovation, rather than the upward one,is drawing attention, as developing countries like China and India grow rapidly. The approach called glocalization that the established industrial manufacturers have adopted for the last decades-- developing high-end products at home and adapting them for other markets around the world 〜 will not suffice as growth slows in rich nations. To tap opportunities in emerging markets and pioneer new segments in rich nations, companies must learn reverse innovation: developing products in countries like China and India and then distributing them globally. This paper reports that the real examples of reverse innovationcan be found among innovations initiated by GE Healthcare and Honda Motorcycle. The new frontier of innovation emerges, which gives multinational corporations new opportunities and threats.