5 Tips for Trickle-Up Innovation from C.K. Prahalad

Posted by: Reena Jana on April 07, 2009

Multinationals and start-ups alike can learn valuable innovation lessons by observing inventions and services that originate in emerging-markets — and then adapting them for the developed world. Some of the world’s leading thinkers and business school professors are now coming up with playbooks for corporations that are seeking such a “trickle-up” innovation strategy. For my recent BusinessWeek stories on the topic, I spoke with C. K. Prahalad, author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, who highlights five ways that developing nations are often ahead of the curve. Smart companies could use these as a guide. Here are Prahalad’s observations:

Affordable Products
Emerging nations can’t afford goods priced for the U.S. and Western Europe, which pushes companies to find inexpensive materials or manufacturing options.

‘Leapfrog’ Technologies
Developing countries lack 20th century infrastructure and so have fast-forwarded to newer technologies such as mobile phones or solar energy.

Service ‘Ecosystems’Entrepreneurs in poor nations often must rely on others for help, creating new partnerships like video-game cafés where gamers test offerings such as online identity verification.

Robust Systems
Emerging markets require products that work in rugged conditions. A gadget sturdy enough to survive monsoons can handle spilled coffee in Boston or San Diego.

New Applications
Customers in poor countries have few product choices, providing market openings for add-ons that update and extend the lives of existing merchandise.

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What comes next? The BusinessWeek Innovation and Design team of Michael Arndt and Helen Walters chronicle new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

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