Reverse Innovation Research Articles

The Deployment of Reverse Innovations: Adaptations from Emerging to Advanced Markets

Based on the existing literature and on 12 case studies, the goal of this paper is to refine and expand our comprehension of the reverse innovation process by digging into the adaptations that allo...

Projectification

PurposeThe last few decades have seen the rapid emergence of two transformative streams in large firms. The first is the development of project management, aimed at improving the performance of innovation management, while the second, the internationalization of innovation organizations and processes in response to strategies of redeployment toward emerging countries. Both streams have been closely analyzed in the fields of project management and international management, respectively. However, the links between the two have been less studied. The purpose of this paper is to consider the hypothesis that a firm’s projectification might have an important impact on its pattern of internationalization in innovation.Design/methodology/approachFirst, we present the models of internationalization of innovation processes used in the multinational corporation literature. This field essentially focuses on the components of permanent organizations: global internationalization strategy and legacy, R&D footprint, characterization of local subsidiaries and the role of central head offices. Projects figure only as a context in which those elements operate, not as a structuring variable of the global innovation process pattern. The authors challenge this view by exploring whether the specificities of the firm’s projectification pattern can influence how it builds its global innovation process. The paper is based on a longitudinal case where the authors analyze the organizational transition within the Renault group, an emblematic case of a multinational that implemented a spectacular internationalization transition in the 2000s.FindingsOur results demonstrate project organizing’s major impact on the internationalization patterns of innovation processes within the firm. They show how the deployment of a polycentric innovation footprint has been the consequence of a specific projectification transition, giving the project and program functions the autonomy to transgress centralized product development norms to adapt their project to the local environment; use the initial breakthrough project as the foundation for a new and specific global product development network through a lineage logic; and sustain this innovation global network as a permanent process of the firm.Research limitations/implicationsThe paper demonstrates the importance of the organization’s projectification characteristics as an important vector for successfully implementing the most advanced internationalization strategies (i.e. reverse innovation) and innovation processes models (i.e. integrated networks).Practical implicationsThe paper characterizes project management related conditions that can govern the success of innovation strategies in high-growth emerging countries: the autonomy and empowerment of project functions; colocation and integration of teams; existence of a program function; and HR policies capable of supporting lineage management and project-to-project learning processes.Originality/valueBridging project management literature with multinational management literature. Demonstrate the key impact of projectification on internationalization pattern of the firm. Longitudinal analysis of a firm internationalization transition on a ten-year period.

Reverse knowledge transfer and innovation in MNCs

PurposeThe purpose of this paper is twofold: to study the relationship between reverse knowledge transfer (RKT) and headquarters’ innovation, examining potential moderators of such relationship, and to analyze the role of headquarters’ absorptive capacity (AC) and the coordination mechanisms they adopt as antecedents of RKT.Design/methodology/approachQuantitative data were collected from 104 Spanish multinational companies. Structural equation modeling was used to test hypotheses.FindingsFindings provide the evidence of a positive relationship between RKT and headquarters’ innovation. This relationship is higher when the knowledge transferred from subsidiaries to parent units is of a more tacit nature, and also when the organizational distance between them is larger. The results also show that the parent unit’s AC and the use of mechanisms for coordinating company units can facilitate RKT.Practical implicationsMNCs that wish to be more innovative should be aware that it is worth the effort of fostering RKT, especially when knowledge is more tacit and comes from subsidiaries with different organizational practices and culture because these two variables increase the positive relationship that it was found between effective RKT and the development of innovation in the headquarters. Additionally, results show that in order to facilitate RKT, the improvement of headquarters’ AC and the use of mechanisms of coordination between them and its subsidiaries can be useful.Originality/valueUp to the authors’ knowledge, this is the first empirical study that examines the link between RKT and headquarters innovation, and one of the few that focuses on headquarters characteristics as determinants of RKT. Thus, the findings contribute to the literature that highlights the benefits of RKT for MNC’s competitiveness, and that seeks to know how to promote RKT.

Opening the reverse innovation black box to pinpoint its drivers and challenges in Western MNCs

If hallmark examples of reverse innovation flourish, the micro-level drivers and challenges of this phenomenon remain understudied. The present paper aims at filling that gap by investigating the reversal process at stake to better tackle its managerial challenges. This conceptual paper first explores the market drivers/challenges associated to reverse innovation, leading to fine-tune the phenomenon by using the disruptive innovation lenses. In a second part, the article relies on international business literature, to characterise intra-MNC bottlenecks and configure enabling managerial practices. The analysis first outlines two types of reverse innovation (associated to different marketing and creative stakes) and then highlights their respective organisational conducive environments and major bottlenecks. Opening the reverse innovation black box and pinpointing its underlying process increases both the analytical power of the concept and the ability of Western MNCs to successfully run such global innovation strategies.

Inovação reversa: uma oportunidade em tempos de crise

Exploratory innovation of a new experience of using communications systems in developed countries, but with innovations in developing countries. This article aims to present a valuation of human capital for the knowledge of performance as the basis for the implementation of new projects. It is a bibliographical research, with an introduction between classic and contemporary authors, confronting the development of countries from the concept of reverse innovation. Innovation in the part of the combination between the assimilation of knowledge is acquired in consolidated products, processes and services and the valuation of human capital.

Navigating the purchasing power gap in new product development in multinational corporations

Multinational corporations (MNCs) face a significant purchasing power gap of customers between developed and emerging economies. In R&D intensive industries making physical products, MNCs can benefit from economies of scale. Therefore, managers strive to achieve a product standardization–adaptation (S‐A) balance when navigating the purchasing power gap. Through focusing on five MNCs headquartered in developed countries, I examined how MNCs can achieve such a balance through new product development (NPD). I found that (1) an S‐A balance can be achieved through three NPD strategies (product simplification, product retaining, and reverse innovation); (2) managers need to take into account five key factors when choosing NPD strategies (product complexity, product modularity, brand strategy, position in local competition, and internal technical standards); and (3) the NPD strategies can be implemented through structural separation, temporal separation, and a shared value. This research reveals the complexity of achieving an S‐A balance when managers navigate the purchasing power gap in NPD. Different NPD strategies have certain advantages and shortcomings. High product complexity and product modularity can serve as favorable conditions for a product simplification strategy. A brand strategy of leading‐edge technologies can serve as an adverse condition for a product retaining strategy. Strong local competitors in emerging markets can be a motivation for a reverse innovation strategy, while stringent internal standards for safety can be an adverse condition. This research also reveals the nuances of implementation of NPD strategies in terms of managing innovation and refinement activities. MNCs may need temporal separation when adopting both downhill and uphill NPD strategies.

Innovation for and from emerging countries: a closer look at the antecedents of trickle-down and reverse innovation

International new product launch speed is a crucial goal for firms, as it has major implications for their performance. The authors examine whether and how (1) the price and number of attributes of a new product, (2) the number of developed (emerging) countries in which it has been launched, and (3) the nature of the firm that originally launched it (i.e., multinational versus not) affect the new product’s speed of launch from developed countries to emerging ones (i.e., trickle-down) or vice versa (i.e., reverse innovation). In order to test the hypotheses, the authors use data on new product launches in the global packaged food industry in 2001–2014. The results indicate that a lower price accelerates trickle-down, while a higher price and more attributes accelerate reverse innovation. Further, having been launched in more countries and having been launched by a multinational firm both accelerate trickle-down and reverse innovation.

Adopting knowledge from reverse innovations? Transnational patents and signaling from an emerging economy

Is there knowledge adoption of innovations from emerging economies? We theorize that, to help overcome information asymmetry across countries, granting patents to technology in the emerging economy of China can serve as a signal of technology potential and market opportunity to enhance technological knowledge adoption in a developed economy such as the United States. The effect may be greater in a complex technology sector with high information asymmetry than in a discrete technology sector, and in regions with less developed market intermediaries, where information asymmetry is high. Our difference-in-differences estimates using 4226 China–U.S. patent dyads and comparable U.S. patents support our hypotheses.

Innovation capabilities for global R&D projects in subsidiaries

PurposeIs the development of local innovation capabilities enough for foreign subsidiaries in emerging markets to be able to integrate into global R&D projects? The authors argue that it is not. The purpose of this paper is to show the central role of R&D capacities when it comes to inserting foreign subsidiaries in emerging markets into global R&D projects.Design/methodology/approachThe study investigated 131 foreign multinational subsidiaries operating in Brazil. For each subsidiary, the authors surveyed two to five directors or C-level executives from innovation, R&D, engineering, product development and projects. the authors used structural equation modeling for analysis.FindingsThe results indicate that product and process innovations alone do not guarantee the insertion of the emerging market subsidiaries into global innovation projects. Such insertion depends on the subsidiary’s accumulation of R&D capacities.Practical implicationsThe results reinforce the central issue of building product and process innovation capabilities as the first step toward a blueprint for global projects. However, the effort is not limited to these initiatives. Product and process innovation efforts need be reverted in headquarters’ eyes in order for subsidiaries to gain R&D center status. To achieve this, subsidiaries must align their technological innovations with multinational corporations’ innovation strategies.Originality/valueIn authors’ view, this study contributes to the literature in three main areas: the evolutionary process of innovation capability in subsidiaries, the reverse innovation debate and the discussion of subsidiaries’ initiatives.

Institutional entrepreneurship in the platform economy: How Uber tried (and failed) to change the Dutch taxi law

Platform innovations like Uber and Airbnb allow peers to transact outside established market institutions. From an institutional perspective, platform companies follow a reverse innovation process compared to innovation within traditional regulatory systems: they first launch their online platform and ask for government permission only later. We analyze the emergence of Uber as an institutional entrepreneur in The Netherlands and the strategies it employed in a failed attempt to get its UberPop service legalized through changes in Dutch taxi law. We conclude that Uber’s failure to change the Dutch taxi law stemmed from the difficulty to leverage pragmatic legitimacy among users into favorable regulatory changes in a highly institutionalized regime, because Uber’s institutional work strategies were not aligned.

FRUGAL AND REVERSE INNOVATION FOR HARNESSING THE BUSINESS POTENTIAL OF EMERGING MARKETS — THE CASE OF A DANISH MNC

In recent years, there has been a shift in the epicenter of innovation from developed to emerging markets. Western multinationals are increasingly harnessing the potential of emerging markets by setting up local subsidiaries and developing frugal and reverse innovations. This study is an attempt to explore this shift and investigate the process of development of these innovations using a case study analysis approach. The study analyses the case of a technology-based Danish multinational (MNC) and explores how frugal innovations in India and China are developed. Based on nine interviews with leading R&D experts, the results provide evidence for the ongoing innovation shift and offer insights into the development of frugal products in local R&D projects. Growing traction towards reverse innovation, where MNCs are developing frugal products for global markets is also an important finding.

Research on the Integrated System of Value Chains and the Support Capability System in Reverse Innovation Process—Case Studies of Leading Multinational

Taking “GE” and “SIEMENS” as cases, this paper adopts grounded analysis method, investigates integrated system of value chains and the support capability system during reverse innovation process. Some significant results are found as follows: Firstly, the value chain model of the glocalization is a steady and expanding model while the value chain model of the reverse innovation is a disruptive and reconstructive model, and the two are quite different types. Secondly, in the process of reverse innovation, the value chain integration successively experienced three stages: construction, expansion and climbing. Thirdly, the different support capabilities are required in each value chain integration stages.

Reverse open innovation: open innovation as a relevant factor for reverse innovation

We investigated the role of open innovation in the reverse innovation process. Reverse innovation is an innovation initially launched in a developing country and later introduced to an advanced country. Von Zedtwitz et al. (2015) developed a typology of global innovation with sixteen innovation flows between advanced and emerging countries, ten of which are reverse innovation flows. We argue that their typology can be expanded. By adopting an inductive case study, we provided a nuanced analysis of open innovation as a trigger for reverse innovation based on an in-depth case analysis of a foreign subsidiary and its network of local partners in an emerging market. Our research extended the typology of Von Zedtwitz et al. (2015) by identifying open innovation occurring in emerging markets and influencing the process of reverse innovation in multinational companies. By adding analyses of open innovation, we theorised that new reverse innovation configurations emerge. The managerial contributions are related to how multinational companies can benefit from open innovation and leverage the potential of reverse innovation to increase innovation performance and competiveness in the global setting.

Reverse innovation in global health

The term “reverse innovation”, also known as “trickle-up innovation” is being popularized since 2010 with an initial focus on corporate development and economics. In brief, reverse innovation refers to new ideas and solutions adopted and tested in low- and middle-income countries (LMICs), which subsequently spread to high-income countries (HICs). Reverse innovation very much applies to public health and wellbeing; indeed, a model for reverse innovation in global health has been proposed. Experience and lessons from reverse innovation in global health suggest system-wide benefits that arise from partnerships between LMICs and HICs. Further examples of reverse innovation in global health focus on integrated approaches to health and demonstrate potential for HICs. Intercultural and multilanguage competence are central elements for global partnerships to leverage reverse innovation as global innovation. Existing global product development partnerships have a high potential and should be expanded as platforms of global innovation hubs in health.

Reverse Innovation in Health Care

Reverse Innovation in Health Care

Reverse open innovation: open innovation as a relevant factor for reverse innovation

Reverse open innovation: open innovation as a relevant factor for reverse innovation

Opening the reverse innovation black box to pinpoint its drivers and barriers in Western MNCs

Opening the reverse innovation black box to pinpoint its drivers and barriers in Western MNCs

ТЕОРІЯ ЗВОРОТНІХ ІННОВАЦІЙ ЯК СВІДЧЕННЯ ЗАЦІКАВЛЕНОСТІ В ЗДОБУТКАХ НАЦІОНАЛЬНИХ КУЛЬТУР У ГЛОБАЛІЗОВАНОМУ СВІТІ

The purpose of the article. The objective of this article is an introduction to cultural scientific discourse one of the theories of innovation and innovation management, namely the theory of «reverse innovation». The scientific novelty of the work. The theory that is used in modern business can be taken as a basis for substantiating the request for the achievement of national cultures in a globalized world. The study highlights the theory of reverse innovation in the context of cultural issues and in the aspect of the dialogical unity of the universal and national. This formulation of the question allows the author not only to substantiate the request for national cultural achievements in the modern world but also to clarify such terms as globalization and glocalization in the cultural environment. The term «reverse innovation» refers to a business model where innovation is produced in developing countries, and then it spreads among economically developed countries that have established the prior claim on innovation upheaval in a globalized world. This model overcomes stereotypes of the glocalization approach, which involves the local adaptation of common phenomena and does not use the resource potential of the regions. The research methodology. In this study, the author used such general scientific methodology as comparison, analysis and synthesis, systematization of knowledge, as well as elements of comparative studies. Conclusions. The author established new interconnections between the theory of reverse innovations and the expression of national in culture, examples of the productivity of such an approach are given. The study of the forms and phenomena of national cultures through the application of economic theories opens the way for the introduction of the achievements of these cultures under the conditions of application of economic criteria as dominant. This approach also overcomes the separation of a nationally defined cultural environment from the economic realities of life; destroys the stereotype of economic instability in the modern globalized world of a nationally defined cultural product and creates a new space of comparative studies, it is the implementation of the «bifurcation principle» – one of the basic principles of synergetics as a science that forms the key principles of the contemporary world view. The study of individual cultural achievements as successful innovations carried out by the model of reverse innovation may and should become the subject of study of the following scientific research.

Using a cross-contextual reciprocal learning approach in a multisite implementation research project to improve self-management for type 2 diabetes

This paper reports on the use of reciprocal learning for identifying, adopting and adapting a type 2 diabetes self-management support intervention in a multisite implementation trial conducted in a rural...

The Good and Bad of Innovation in Emerging Markets

This proposed symposium offers important implications related to the theme of the 2018 Academy of Management meeting, Improving Lives. Innovation in emerging markets has been the topic of many discussions. Innovation can contribute to the economic development of underdeveloped, developing and emerging economies, and even developed countries. For example, innovation can bring more cost effective process of production to reduce the cost of products and services, which can provide a better life for the bottom of the pyramid or any marginalized group of people. Innovation in underdeveloped or developing countries can also allow firms engage in business with other countries that can ultimately bring economic development for the country and potentially move it up the global value chain and to the stage of emerging economy with much larger prospect of development. On the other hand, many have criticized innovation in emerging and developing countries as their inventions are viewed as copying developed country firms’ processes and products, causes of path-dependency and lack of true development and indigenous innovation, cheaper production of such products and services due to factor endowment such as cheaper labor force, and contributor to social and environmental pollution due to lack of integrated institutions. Frugal Innovation from Emerging Market MNCs Presenter: Masud Chand; Wichita State U. Global Innovation Capabilities from Emerging Market: Beyond Reverse Innovation Presenter: Yi Wang; Tsinghua U. Innovation, Rural Economic Development and the Bottom of Pyramid Presenter: Majid Ghorbani; Renmin U. of China Presenter: Liyan Xuan; Renmin U. of China From Value Co-creation to Value Co-destruction? The Case of Dockless Bike Sharing in China Presenter: Juelin Yin; Xi'an Jiaotong-Liverpool U. Presenter: Lixian Qian; Xi'an Jiaotong-Liverpool U.