During the past decades, most large established companies have struggled to develop a platform that allows them to continuously develop breakthrough innovations and bring them to the market. Instead, many companies focus on incremental innovations that bring short term profits but lack new and revolutionary technologies or entrance to a new market. Realizing the need for breakthrough innovation, many companies have tried different techniques to sponsor corporate entrepreneurship and help commercialize breakthrough discoveries and ideas. However, most efforts have been carried out in vain since the fundamental problem lies in the organizational and financial lack of tolerance for the risks and uncertainties associated with developing such innovations.
In Innovation: The Classic Traps, Rosabeth Moss Kanter offers a strategy aimed to help corporations establish a sustainable way of innovating. The strategy called the “innovation pyramid” suggests that corporations should structure their ideas so that at the top, there are a few “reach” ideas. These ideas could offer new viable directions for the company to pursue. In the middle section of the pyramid, the author suggests companies should have an archive of hopeful ideas that are assigned to teams and are constantly being developed and tested. Finally, the base of the pyramid should consist of incremental innovations that allow for rapid production and product improvements.
This strategy shows promise because it allows for the financial comfort and competitive aspect of constantly having new products to release and improve upon while also permitting time and funds to develop large scale breakthrough innovations. However, the middle section allows for a lot of creativity in problem detection which companies and their employees often limit to the scope of the societies and environments in which they are operating in; lacking perspective and restraining possibilities for breakthrough.
The idea of reverse innovation is “the strategy of innovating in emerging markets and then distributing/marketing these innovations in the developed markets” and could be added as a layer in this middle section to broaden the ideas and problems that first world companies tackle. Innovating in emerging countries first could allow companies to achieve breakthrough innovation not only by expanding into new markets, but also by creating new market items and technologies that are likely to be much more simple than what the general idea of breakthrough innovation suggests. Some examples of breakthrough innovations developed for the third world market include the shoe that grows, the water-gen, and more.
People in first world societies face many “elemental” problems that are often overlooked by the demand and competition of adapting to the high end technologies being developed. Reverse innovation would allow for these simple but impactful innovations to be tested and developed somewhere where the need might be greater and a “lower end” project might be given priority. Once the project is completed and tested in an emerging market where impact is greater and cost is lower, the technology can then be brought to the developed countries with fewer risks and uncertainties. In addition, innovating in emerging markets also allows for companies to create and engage in social good, possibly creating more jobs and worldwide benefits. Overall, the idea of implementing reverse innovation as a strategy in a big corporation could be considered a breakthrough innovation in itself, offering wholly new benefits to a current organization. Therefore, like any other breakthrough innovation, it would also require a good amount of tolerance and testing but could lead to remarkable outcomes that promote more constant breakthrough innovations but also equality through innovation.
Andrea Ramos is a student at Rensselaer Polytechnic Institute pursuing a master’s degree in Technology Commercialization and Entrepreneurship. Her background is in mechanical engineering and design innovation & society. Andrea is passionate about using technology and innovation to promote social and economic change.