Reversing Gears

Abstract

OVERVIEWAddressing resource-constrained customers in emerging markets presents business opportunities beyond local market borders. Multinational corporations can leverage innovations developed for emerging markets to serve customer needs unsatisfied by traditional offerings in developed markets. Little research explores the drivers in the transfer of innovations from emerging to developed markets, a process referred to as reverse innovation. Applying an explorative approach to data drawn from in-depth interviews, archival inquiries, and a manager workshop involving companies from multiple countries and industries, this study derives a comprehensive conceptualization of reverse innovation, proposes a process-oriented approach to reverse innovation, and defines three categories of drivers: structural, cultural, and resource-related. Managing these diverse drivers will enable multinational companies to invert the innovation-flow paradigm successfully.