Abstract
Reverse Innovation has been a newly emerging concept of innovation for last ten years. It implies that new technology or new knowledge flows from low income countries to high income countries. This concept of reverse innovation contradicts the conventional wisdom of innovation paradigm. The conventional wisdom implies that most of technological innovation has been created within research centers located at advanced countries. Our contribution is that this paper suggests an innovation- diffusion model of reverse innovation. We divide total diffusion of reverse innovation into four sub-parts: first, identification of the problem, second, innovation in low income country, third, innovation transfer from low income country to high income country, and fourth, innovation and diffusion in high income country. We also implements a case study of China in the area of reverse innovation. Our finding show that eleven cases of reverse innovation are identified in China. Accordingly, we conclude that China is one of the Emerging Market(EM) that implements a reverse innovation. One of implications of this study is that it is necessary to intensify cooperation between high income country and low income country, since executives of headquarter of multi-national corporation(MNC) located at high income countries need to understand cultures of low income country to sell their products to low income countries. At the same time, low income country needs to cooperate with the headquarter of multi-national corporation(MNC) in high income country in order to re-export their frugal products to high income countries.
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