Future innovation: Threat or opportunity?

A year may have passed since this particular edition of the Economist hit the shelves, but I bet you could replace “April 2010” with “April 2011” and few people would notice. I kept this edition back because of it’s special report on business and innovation in the developing world. It goes a long way to explaining and describing what’s happening not only in the commercial world, but also the informal sector. I’d say that makes it a must read for members of the ICT4D community.

There are dozens of takeaways from the report. Here are a few of the highlights which resonated most with me:

“Most striking is the emerging world’s growing ability to make established products for dramatically lower costs – no frills $3,000 cars, $300 laptops and $30 mobile phones may not seem as exciting as a new iPad, but they promise to change far more people’s lives”

“Emerging countries are no longer content to be cheap sources of cheap hands and low-cost brains. Instead, they too are becoming hotbeds of innovation, producing breakthroughs in everything from telecoms to car making to health care”

“Innovation in the emerging world will encourage, rather than undermine, innovation in the rich world”

“Emerging economies are not merely challenging [our lead] in innovation. They are unleashing a wave of low-cost, disruptive innovations that will, as they spread to the rich world, shake many industries to their foundations”

“Multinationals expect about 70% of the world’s growth over the next few years to come from emerging markets”

“Old assumptions about innovation are being challenged. People in the West like to believe that their companies cook up new ideas in their laboratories at home and then export them to the developing world, which makes it easier to accept job losses in manufacturing. This is proving less true by the day”

“Because so many consumers are poor, companies [in emerging markets] have to go for volume. But because piracy is so commonplace, they also have to keep upgrading their products”

“General Electric and Tata Consultancy Services are doing something more exciting than fiddling with existing products – they are taking the needs of poor consumers as a starting point and working backwards. This approach has been dubbed ‘reverse innovation’, or ‘frugal’ or ‘constraint-based’ innovation”

“Emerging markets are far more varied and volatile than mature ones. Cultural complexities are confounding and tastes are extraordinary fluid”

“Indians often see frugal innovation as their distinctive contribution to management thinking. They point to a national tradition of ‘jugaad’ – meaning, roughly, making do with what you have and never giving up – and cite many examples of ordinary Indians solving seemingly insoluble problems”

“Because of the lack of brand loyalty, companies have to put even more thought into marketing than they do in the West”

(This image, taken on one of my trips to Uganda, shows ‘alternative’ advertising at work)

“To flourish in this atmosphere it helps to have a spirit of a frontier settler, not a corporate bureaucrat. A property company, say, might suddenly move into computers. Rather than worrying about synergies or core competencies, they see opportunities and seize them”

“The corporate go-getters love to explain that if you can make it here – despite the poverty, the dismal infrastructure and the unpredictable politicians – you can make it anywhere”

“Hostility to globalisation in the developed world is likely to grow as emerging giants disrupt one product market after another”

I find the whole topic of innovation, emerging markets and globalisation – and how the three intertwine – fascinating. What would our reaction be if globalisation, for example – which has long been accused of disadvantaging the developing world – turned on us? And what for the international development community? As more and more countries “emerge” less and less remain to be “developed”. A fully emergent African continent would leave a considerable number of international NGOs looking for a new home, and in dire need of a little innovation themselves.

Maybe that’s one measure of success they wouldn’t be so keen to find themselves meeting.

36 thoughts on “Future innovation: Threat or opportunity?

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