Rethinking Innovation: Start at the Bottom, Not the Top!

Innovation Blog

Rethinking Innovation: Start at the Bottom, Not the Top!

By Shlomo Maital

Anil Gupta

Sometimes, rarely, you find pearls in advertising supplements.

The Global New York Times’ “Dawn of the New Decade” ad insert seeking investment in Asia (as if Asia needs money and investment, rather than the overspending America) has an interesting interview with Anil Gupta, INSEAD Professor and expert on globalization. [1]

Here is Gupta’s ‘take’ on the changing world of innovation:

“Enterprises that hope to emerge as the global leaders in 2020 will also need to think differently about innovation.  Traditionally, innovation has originated in the developed countries….within industries, at the top of a product range, for example, a Lexus, and then worked its way down to, say, a Toyota Corolla.  ..In order to capture the very large market opportunities in the low-to-middle segments [in emerging markets], the leading global enterprise of 2020 will need to be good at not just top-down innovation but also at frugal innovation, whose roots would lie in the low- and middle-income markets of emerging economies.”

Prof. Gupta cites as an example Tata Group’s Nano car, the world’s cheapest, and its strategic plan to bring out an electric Nana in the EU and US, matching the performance of domestic equivalents at 1/3 less cost.  “We’ll see this phenomenon in many industries, from tractors to banking,” he notes.

Innovator:  Can you shift your focus from premium-priced ‘toys’ bought by those with scads of money,  to low-priced products that even low-income groups in low-income countries can buy?   The late C.K. Prahalad identified “fortunes at the bottom of the pyramid”…  but apparently, according to Gupta, there are also superior innovation opportunities down there.