Learn from innovation abroad

Innovation used to be an activity that was mainly carried out by companies in industrialised countries. It still is often mentioned as the ultimate defensive strategy for companies in North America, Europe or Japan against low cost manufacturing and services in China and India. But this is an incomplete picture: there is already a wealth of innovative activities ongoing in emerging countries and it does not take too much to see how one can apply these in the western world.

by Arnoud De Meyer and Sam Garg
Last Updated: 23 Jul 2013

Based on a study of more than 30 Asian companies, whether high-tech or not, the authors Arnoud De Meyer, the Akzo Nobel fellow of strategic management and professor of technology management, and Sam Garg from INSEAD, provide precious information on innovation in emerging countries.

For large and small companies from industrialised countries, internationalising their innovation value chain and taking advantage of the power of new ideas that exist outside the industrial world represent significant opportunities.

Consumers in emerging countries may buy the same brands in motorbikes, cigarettes or upmarket clothes, but display very different needs in their daily lives. If you can cater for those needs you can actually tap into large markets. The opportunities can even be greater if you consider that emerging countries resort to different kinds of innovation processes, and that adapting those sources of innovation to the industrialized world may actually be extremely beneficial.

There is a whole world of new customer demand and thus new solutions emerging in India, China, Latin America or South Africa, but of course innovating in emerging countries requires some adaptation in the standard innovation management systems.

Getting access to this wealth of creative ideas requires western companies to build local partnerships not only to understand those markets, but also their specific approach to innovation. Of course there are particular hurdles to innovate in emerging countries but, according to the authors, this one more reason to work hand in hand with local companies and so understand how to overcome them.

Through brief case studies, the authors take us from the innovation systems that led to fusion treatments combining Western and Oriental medicine to the blending of information technology and biotech in Bangalore; from Aapico's auto parts in Thailand to iRiver MP3 in Korea.

Using specific examples, the authors underline the different obstacles to innovation that a company can come across in emerging markets (lack of process management and marketing, lack of resources, lack of design capabilities and their consequences) but always providing solutions that were found to overcome those obstacles. Altogether this paper gives a fascinating insight into the innovation process and the way it is influenced by culture and economic environment.

The complete write up of these cases can be found in the recently published book "'Inspire to Innovate: Management & Innovation in Asia", Palgrave Macmillan, 2005. Follow the link on the right-hand menu...

INSEAD 2006

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