Reverse Innovation for the New Mobility

Abstract

The confluence of increasing urbanization with climate change, and the associated need to decarbonize the economy, is driving urgency for the global adoption and diffusion of sustainable scalable solutions. IT-enabled, multi-modal transportation, often referred to as the "new mobility", is making inroads in developed and emerging economies alike. Local emerging market entrepreneurs as well as multinationals, seeking transformative innovation strategies to open up new markets are engaging in this rapidly growing industry. This has created an opportunity for innovative indigenous firms in emerging economies to either scale internationally on their own or partner with (often Western) multinationals to define frugal products, services, and business models that address recession-constrained Western markets. Part and parcel to this shift in global engagement is the emergence of a new product development strategy, referred to as reverse innovation (RI). Here, we seek to explore the nexus of RI and the new mobility opportunity, by explicitly recognizing the spillover effects of knowledge transfer and economic development through local firms and, more broadly, the supply chains that internationalize. In fact, some Western companies are outsourcing RI to emerging economy partner firms, thus shifting historical cost-based relationships to value-based engagements. At the core, lies a radical shift in how products and processes are designed, to include: stripping out complexity without sacrificing customer experience; a high degree of customization not through features but by re-using underlying platforms; and customization at the latest stage of the value chain so as to not disrupt materials, components, and subsystems. The potential implications of RI designs and business models on the adoption of frugal innovations in the West are explored, and paths to engaging entrepreneurs in emerging economies are highlighted.

Reverse innovation: a systematic literature review

“…An alumnus of the Salzburg Global Seminar, and of the Minda de Gunzburg Center for European Studies at Harvard University, Thierry completed his PhD in monetary economics and finance at Essec Business School in Paris. Adriaens et al, 2013;Agarwal and Brem, 2012;Brem and Ivens, 2013;Burger-Helmchen et al, 2013;Crisp, 2014;Jha and Krishnan, 2013;Ostraszewska and Tylec, 2015;Petrick and Juntiwasarakij, 2011;Radojevic, 2013;Simula, Hossain, and Halme, 2015b;Agnihotri (2015); Corsi, Di Minin, & Piccaluga, (2015); GRASSROOTS INNOVATION (Gupta, 2008) Brem & Wolfram 2014CATALYTIC INNOVATION (Christensen, Baumann, & Sadtler, 2006) Brem & Wolfram 2014INDIGENOUS INNOVATION (Lazonick, 2004;Lu, 2000) von Zedtwitz, GOOD ENOUGH INNOVATION (Christensen, 1997) Govindarajan and Ramamurti, 2011;Simula et al, 2015b; VALUE INNOVATION (Kim & Mauborgne, 2005) Agnihotri, 2015 GANDHIAN INNOVATION (Prahalad & Mashelkar, 2010)…”

“…The sustainability gap suggests that emerging countries have (or will soon have) more severe environmental concerns than high-income countries (see Adriaens et al, 2013;Brem and Ivens, 2013;Dakshinamoorthy and Gordon, 2010;Govindarajan and Euchner, 2012;Govindarajan and Trimble, 2012a, b;Spiridon and Clipa, 2010). Govindarajan and Trimble (2012a) gave the example of China's extreme air pollution problems and the development of electric cars by local companies such as BYD [8].…”

Using data and technology to integrate mobility modes in low-income cities

“…These access barriers can limit the use of ITS elements in some cases, particularly those developed for smartphones. However, widespread reliance on non-smart mobile phones in LICs and LMICs has led to the emergence of locally-generated solutions which internalise and capitalise on existing conditions and accelerate success by anticipating barriers and costs (Adriaens, De Lange, & Zielinski, 2013). Such alternatives could enable LIC and LMIC cities to leapfrogwhich occurs when newer technologies provide market entry opportunities for latecomers that allow the latter to skip certain trial and error phases -HIC and UMIC cities in terms of transport integration (Blanco & Moudon, 2017;Sultana, Salon, & Kuby, 2019).…”

Capacidades organizacionais para a inovação frugal

“…Além disso, os requisitos técnicos para um sistema de produção de apoio à inovação frugal, orientada para o cliente, ainda não estão definidos (Arndt, Hochdoerffer, Moser, Peters, & Lanza, 2014). O modelo de inovação aberta, pode ser utilizado nos produtos e serviços considerados como inovações frugais, nas fases iniciais de sua identificação, necessidades, design e desenvolvimento (Adriaens, Lange, & Zielinski, 2013).…”

“…Uma outra possibilidade que se abre nesse processo, não perdendo de vista a oferta de valor, manifesta-se pelo uso de open innovation ou inovação aberta (Hossain, 2013;Tiwari & Herstatt, 2012b). A inovação aberta, pode ser aplicada nos produtos e serviços considerados como inovações frugais, nas fases iniciais de sua identificação, design e desenvolvimento (Adriaens et al, 2013).…”