Is it fair to use the term “Reverse Innovation” for the technology emanating from India & China, especially when these countries are emerging as technology super powers????
There was a time when the Innovation was considered to emanate from the rich countries like USA, Germany, & Britain and spread to the rest of the developed world and then when it became obsolete in the developed world, it used to slowly drip down to the developing world as new technology. This was considered the process and procedure for the better part of the 20th century, and was closer to the reality of the times also.
In India, the protectionist attitude and the populist policies were responsible for that, on account of the over dependence of the political parties on the industrialists for party funding, which allowed the corporates to mint money by selling outdated technologies and products to the people. Government also on its part, to protect the interest of Indian Business House, did not allow new technology into India except for defence, where also India availed the rupee payment option for the bulk of the imports from Soviet Union.
Add to this, the grim financial situation borne out of the 1971 Pakistan war, compelled India to protect its precious, precarious, Foreign Exchange Reserves. Which prevented the import of foreign technology, even in the priority sector like healthcare. Bulk of the foreign exchange was used to import petroleum products and of course for the luxury trips of Ministers and bureaucrats under various pretexts.
In China too, strong communist policies prevented the country from opening up to the latest in technology from the west. Its progress was limited to the defence and aerospace.
This was certainly not an ideal situation for Innovation & development of technology in India & China. Though it was in the eighties when both India & China started the liberalization process under Rajeev Gandhi and Deng Xiaoping, It was in the nineties that both the countries opened the gate to technology, progress, & prosperity.
Turn of the century saw India slowly but firmly getting a foothold in the development of technology in IT & ITES so much so that there was a reverse trickle of Innovative and cost effective technologies from Asia to the west. India and China could now boast of the best in Human Resources and Technologies. Successive Prime Ministers in India, Jiang Zemin & Hu Jintao in China propelled these two countries towards unparalleled Economic Growth.
Deprivations the west was suffering from were the assets the Asia was leveraging to usher in this revolution.
The west was taken aback by this sudden upsurge from Asia and sent them thinking. It was in this situation that in 2005, a phrase “Innovation Blowback” was coined to describe this process, by John Hagel III and John Seely Brown in their 2005 McKinsey Quarterly article titled “Innovation blowback: Disruptive management practices from Asia." It was called Disruptive Management policies because it tried to disrupt & reverse the trend of trickle of technology from the developed countries to the developing ones.
This process was used intelligently by GE in its process of globalization and was given a respectable name “Reverse Innovation”. Professors Vijay Govindarajan and Chris Trimble and GE’s Jeffrey R. Immelt first used this term.
Management Guru Late C K Prahalad had this to add “There are five ways in which resource-starved developing countries lead rich nations: 1) affordability, 2) leapfrog technologies, 3) service ecosystems, 4) robust systems, and 5) add-on applications. These very deprivations are catalysts for reverse innovation.”
Recession, and the Research Shrinkage in the West.
Continued and unrelenting recession has forced corporates in west to shift or outsource their Research and Development to Asia. All the large corporates are using the “Reverse Innovation” to keep themselves afloat amidst the stiff competition and the reducing bottom lines. GE has used it effectively for is globalization effort & other are also getting into the mode. Flow of regular technologies up west, is now a regular feature rather than an exception.
This being the situation, is it correct to use the term “Reverse Innovation” for the technologies emanating from India & the developing world???
Please express your views.
Examples of Reverse Innovation:
Tata Motors – Tata Nano
GE – GE MAC 800
Procter and Gamble (P&G) – Vicks Honey Cough – Honey-based cold remedy
Nestle – Low-cost, low-fat dried noodles
Xerox – Innovation Managers
Microsoft – Starter Edition
Nokia – New business models
Hewlett-Packard (HP) – Research Labs in India
Godrej – Chotukool Refrigerator
Tata – Swacch – World’s cheapest water purifier
Pepsico – Kurkure and Aliva
Bharat Forge – Maintenance Management Practice
KFC – Taco Bell – Yum! Restaurants
Husk Power Systems
LG – Low-cost Air Conditioners (AC)
Renault – Logan
Better Place – Smart Grid of Battery charging/Swap terminals
GE India – Steam Turbines
PS: Please also read my article on WikiHow about the deterioting standards of imparting in Science & Technology (STEM) education in United States, wherein 15 year olds in USA ranked 29th in the world in terms Math Intelligence