Reverse Innovation Networks: Connecting Emerging Economies to the Developed World

Abstract

Reverse innovation (RI) is a relatively recent and understudied phenomenon. It is a product development strategy where an innovation is designed and adopted first in emerging economies before transferring to the West. Research has not comprehensively explained what induces RI. Since RI results in international network building, this research engages network theory to shed light on the network mechanisms likely to position new emerging market SMEs for RI. Illustrations from the sustainable transportation sector provide some applicable clarifying context. Cities around the world are similarly growing rapidly such that firms’ transportation technologies can be interchanged across them, but the technologies may also require some local customization. Overall, the theoretical development suggests that: 1) network centrality in terms of prominence, 2) connectedness to powerful others as defined by eigenvector centrality, and 3) brokerage in accordance with betweenness centrality could be indicative of potential RI in local and international value system networks. This research adds to the literature on the dynamics of globalization.