Ideal types of reverse innovation for firms without overseas RD centers: case studies of Chinese firms

Abstract

In Chapter 9, Jin et al. (2020) identifies and analyzes a new phenomenon of globalization, namely the reverse innovation, the processes whereby technology, innovation and new products are developed or marketed in developing countries and are then transferred from developing countries to advanced countries. The chapter identifies three ideal types of reverse innovation, which are also empirically illustrated, based on a matrix framework, which is itself based on types of innovation strategy and the location of commercialization. They are Ideal Type I: Reverse innovation based on transferred technology; Ideal Type II: Original reverse innovation; and Ideal Type III: Original reverse innovation (front-end technology). The firm’s innovation capabilities play a critical role in reverse innovation. The chapter indicates that Ideal Type I is a good strategy for firms in developing countries to achieve reverse innovation in mature technology, whereas the Ideal Types II and III are suitable for firms in developing countries to achieve reverse innovation in emerging technologies and markets.