ZenStorming

Where Science Meets Muse

Is ‘Reverse Innovation’ Really Innovation?

Posted by Plish on September 30, 2009

Comparison of Innovation Strategies - Click for Full View

Comparison of Innovation Strategies - Click for Full View

 

Recently, GE’s CEO coined the term “reverse innovation” in this article.  (Or read the shorter summary version from BusinessWeek)

In a nutshell, Reverse Innovation is  a process by which Product ‘X’ gets developed in and for places like China or India.  It meets very specific needs at a lower price.  However, after launch there is a realization in the U.S. that Product ‘X’ meets needs for a sizable demographic within the U.S., at the lower price.  In a strange twist, a company creates products that compete against its own products.  Instead of expensive, feature rich products being developed in the U.S. and then being modified for sales overseas, products get developed overseas and come back to the U.S. at a lower price point.

That said, is reverse innovation truly innovation?

Vote here before reading my take:


 

My take:

Ultimately innovation, which involves bringing good designs to market at acceptable price points, comes from knowing the customer.  This should be done on a local level, and that part of reverse innovation is on the mark.  However, it shouldn’t take someone creating a device in a different country to open one’s eyes to a market for that same product in the U.S..

I’m not sure what I’d call it, but if you want to know what reverse innovation sounds like, I created this:


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5 Responses to “Is ‘Reverse Innovation’ Really Innovation?”

  1. DennisVega said

    what a great site and informative posts, I will add a backlink and bookmark your site. Keep up the good work!

  2. JimmyBean said

    I don’t know If I said it already but …Excellent site, keep up the good work. I read a lot of blogs on a daily basis and for the most part, people lack substance but, I just wanted to make a quick comment to say I’m glad I found your blog. Thanks, :)

    A definite great read..Jim Bean

  3. Plish said

    Thanks Dennis and Jimmy! Glad to have you aboard!

  4. Dr. Elan said

    The products that are being discussed – have not been innovated newly..they are already there… They have only improvised an existing product.

    So no innovation at all…..

    Should it be called reverse innovation..?? i have a doubt on that too…??

    Innovation is not a property of developed countries only. Innovations do not happen only in developed countries. Innovation can take place in developing countries too…so why do they call it as “reverse innovation?”

  5. Plish said

    I totally concur Dr. Elan. Thanks for your insights!!

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