Necessity is the mother of – Innovation

21 May 2010 Sandeep Mehta

A couple of articles on driving innovation through Reverse Innovation.  One is from Wharton School of Business and another from Forbes.  The article suggests that historically innovation happened in the rich countries and moved to poor countries and now it needs to start in the emerging countries.

Vijay Govindarajan, professor of international business at the Tuck School of Business at Dartmouth College, who spent the last two years as a GE professor in residence and chief innovation consultant, calls the company’s strategy “reverse innovation”. “Historically, innovations have always happened in rich countries,” he points out, “But in the future, innovations will have to take place in countries like India and China, because this is where the bulk of the customers are. The needs are more pressing here and the sheer volumes will justify the investments that will be required for developing the appropriate products.”

The reality is that the emerging market is becoming more attractive and the need to drive down costs to meet the economical realities of that market is driving innovation at GE.  The reduced costs then have a great positive impact on other markets as well.  Similarly, there is a need for products of all sorts – such as cell phones – that need to fit the budgets of a whole new population.

One lesson I am learning from this is that R&D managers need to create situations where the technologists are challenged to generate new solutions.  Innovation is not just about people sitting around and free thinking in a cool room filled with new toys.  I am wondering if there is a structured way for managers to come up with challenges that get the same result without “Reverse Innovation.”

In any case, we can now safely modify Plato’s quote to say that “Necessity is the mother of Innovation.”

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