American President Barack
Obama, in his State of the
Union address, delivered on January 27, 2010, yet again
broached his pet topic of outsourcing, "And to
encourage … businesses to stay within our borders, it is time to finally slash
the tax breaks for companies that ship our jobs overseas, and give those tax
breaks to companies that create jobs right here in the United States of America,"
which predictably drew a huge round of applause from the audience.
Interestingly, President Obama also made a reference to American innovation in
his speech: "…we need to encourage American innovation. Last year, we made
the largest investment in basic research funding in history, an investment
that could lead to the world's cheapest solar cells or treatment that kills cancer
cells but leaves healthy ones untouched." In short, Obama advised the US
companies to invest and innovate at home and ensure that the jobs stayed at
home. `Reverse innovation,' an emerging concept that could be the next big driver
of globalization, encourages neither.
What is `reverse innovation'? Vijay Govindarajan, Professor of
International Business at Tuck School of Business, Dartmouth and the Founding
Director of Tuck's Center for Global Leadership, has the answer. In an
interview to www.emorymi.com, Vijay Govindarajan defines the concept
thus: "Reverse Innovation, very simply, is
any innovation likely to be adopted first in the developing world. Increasingly,
we see companies developing products in countries like China and India and
then distribute them globally." Put differently, traditionally,
manufacturing companies in rich countries
developed expensive technologies at home and then marketed simple versions of
those abroad. In reverse innovation, it is the opposite: the companies innovate
in emerging markets and bring the products home.
|
