Posted: Mar 1st, 2010

The editors at Harvard Business Review (HBR) have named Tuck strategy professor Vijay Govindarajan's concept of reverse innovation one of the 12 most influential management ideas of the decade. The former chief innovation consultant and professor in residence at General Electric, Govindarajan is faculty co-director of Tuck Executive Education's Global Leadership 2020 program and faculty director for custom executive programs for organizations such as Hasbro and Thomson Reuters.

In 2009, Govindarajan and co-authors Jeff Immelt, chairman and CEO of General Electric, and Tuck professor Chris Trimble identified a radical new paradigm in globalization: reverse innovation. Under this new model, increasingly sophisticated emerging markets foster innovation locally and then export it globally. "Very simply," explains Govindarajan, "it's any innovation likely to be adopted first in the developing world. It is so called because, historically, nearly all innovations have been adopted first in rich countries."

In including this concept on its influential ideas list, the HBR editors noted that, "The bigger story here is the maturation of the concept of globalization. Most big corporations in 2000 saw them primarily as a source of natural resources and, increasingly, cheap labor. Then, as rising employment fueled the development of middle classes, cities in India and China came to represent valuable markets. Now these non-U.S. consumers are coming to the foreground."

GE and other firms have recognized this new facet of globalization and are moving quickly to implement research and development in emerging markets. As reverse innovation becomes more and more common, Govindarajan says it will present a formidable organizational challenge for incumbent multinationals headquartered in the rich world.