Reverse innovation is any innovation that is adopted first in the developing world. Such an innovation has the potential to defy gravity and flow uphill to rich countries. The fear of cannibalization is often used as a weapon against reverse innovation projects. That is because they aspire to deliver performance roughly comparable to that of a company’s higher-priced offerings, but at a dramatically lower price—obviously a red flag for such fears.
We are likely to see the reverse innovation phenomenon in a wide range of industries such as ultra-low-cost transportation, renewable energy, clean water, micro finance, affordable health, low-cost housing, and many others. There is certainly a cost of cannibalization, but there is also a cost of inaction. In the case of reverse innovation, the cost of inaction is much higher than the cost of cannibalization. Unless the chief executives of Western multinationals can overcome their fears of cannibalization, they are likely to be disrupted by emerging market giants.
To read the full, original article click on this link: Reverse Innovation and the Myth of Cannibalization - Forbes
