“General Electric CEO Jeffrey Immelt and his colleagues coined the idea of “reverse innovation” in a 2009 Harvard Business Review article, proposing that big companies must innovate in developing countries like India and China to survive. They argued that bringing innovations from the developing world to the developed world would both provide access to emerging markets and allow companies to pioneer new sources of profit in wealthy countries. The unique challenges of designing for low-resource environments in developing countries has fostered highly creative solutions.
One prominent example is GE’s portable ultrasound device. Traditional ultrasound machines cost upwards of $100,000, but a GE team in China designed a device for the Chinese market that plugs into a laptop and costs as little as $15,000. The difference was not just in the product’s price, but also in its target customers and uses. Instead of being designed for large hospital imaging centers and a range of uses, it was targeted to rural health clinics interested in spotting enlarged livers and gallstones. This drove further innovation in GE’s imaging products, including a handheld ultrasound that retails for less than $8,000 and is available in India and the United States, among other countries.
The Tata Nano is another example of reverse innovation. Although Tata designed the super-low-cost automobile for the urban Indian market, where it currently retails for about $3,000, it expects to export the car to other developing countries in 2011, and it has ambitions to enter the European market by the following year.
Mobile health applications from developing countries have the same potential to penetrate developed markets. In developing countries, these applications span a wide range of activities, including data collection, disease surveillance, health promotion, diagnostic support, disaster response, and remote patient monitoring. Experts predict that much of the mHealth innovation in developing countries will center around financial incentives and payments, as mobile money services targeted at those without bank accounts expand—for example, Safaricom’s M-PESA in Kenya and MTN ’sMobileMoney in various African countries.” From Stanford Social Innovation Review