5.

  Reverse innovation
Thierry Burger-Helmchen and Caroline Hussler

INTRODUCTION

The idea that innovation originates in other than advanced countries is not new. Neither
is the idea that subsidiaries of multinational corporations (MNCs) can play a significant
role in the globalization of innovation. Kenney et al. (2009) already forecast ­subsidiaries
located in emerging countries as giving “rise to born-global innovations that could
never have taken place at home” (p. 894). Almost 20 years before, Bartlett and Ghoshal
(1988) also shed light on new products and services originally developed by subsidiaries
­primarily targeting local needs and subsequently sold at a global scale. More recently,
Nokia chose to develop phones in its Beijing research and development (R&D) lab, first
serving the Chinese market before eventually introducing and marketing them in Europe
(von Zedtwitz et al. 2015). Chinese engineers of Siemens also gave birth to an ­inexpensive
and easy-to-use computer tomography device, which is now sold on the US market,
this market remaining the biggest global market for such a device (Radjou and Prabhu
2015). Trying to account for this growing trend in MNC innovative practices, the term
“reverse innovation” has progressively become popular in managerial discourses and
papers (Bloomberg Businessweek, Harvard Business Review, etc.). It describes innovations
­emanating from developing countries, first serving developing countries consumers’ needs
and second diffusing to markets in advanced countries.
Historically, indeed, Vernon (1966), in his well-known International Product Life Cycle
Model, explained that innovations were created in rich countries and first commercialized
in these countries to serve the wealthiest consumers. When sales on this primary market
started decreasing, innovations were sold and diffused in a more basic and less expensive
form to consumers in less developed countries. For Govindarajan and Trimble (2012)
reverse innovation thus accounts for an opposite international diffusion path: products
are originally designed for developing countries and subsequently marketed in advanced
countries (Figure 5.1).
If reverse innovation sounds like an easy-to-use concept at first glance, its ­peculiarity
and boundaries remain blurred. First, many other concepts seem to overlap partially
or even completely with the idea of reverse innovation (von Zedtwitz et al. 2015; Brem
and Wolfram 2014). Among them, Jugaad innovation (Radjou et al. 2012) and frugal
innovation (Zeschky et al. 2011) are regularly and indifferently used with reverse
­
­innovation to report innovative solutions for and in emerging markets. Second, the very
notion of reverse ­innovation itself is also subject to major criticisms and evolutions due
to its initial fuzziness (Radojevic 2013, 2015; Govindarajan and Ramamurti 2011). If
such a lack of ­cohesiveness might be expected when a research field is growing, it however
hinders ­reliable theory development and empirical testing of the reverse innovation
phenomenon.
At the same time, papers on reverse innovation mostly report success stories, at General

75

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 75 19/10/2017 09:59

 76  The Elgar companion to innovation and knowledge creation

Reverse Traditional
innovation: Rich view:
Innovations countries Innovations
trickle up trickle
from down from
developing to developed
developed Poor to
developing
countries developing
countries
countries

Source:  Govindarajan and Ramamurti (2011).

Figure 5.1  A one-dimensional representation of reverse innovation

Electrics (GE) (Immelt et al. 2009) or Renault (Laperche and Lefebvre 2012) for instance.
If this literature anchors the more active role played by subsidiaries in MNC ­innovation, it
fails however to explain how successful reverse innovation occurs. But, beyond t­ heoretical
interest, understanding how to undertake successful reverse innovation might be ­valuable
to improve MNCs’ ability to efficiently compete against emerging market MNCs
(Govindarajan and Ramamurti 2011) on global markets.
The present chapter precisely tackles the reverse innovation conceptual ambiguity
as a prerequisite to better identify its managerial stakes and its analytical scope. To do
so, the first part consists in clearly delineating the phenomenon, by distinguishing it
from close notions and limiting its internal fuzziness. In the second part, we refine the
concept of reverse innovation. Linking disruptive innovation and international business
literatures, we outline two types of reverse innovation and highlight their respective major
­bottlenecks. Lastly, we introduce reverse innovation into the more general debate on
global innovation dynamics, in order to question its sustainability.

REVERSE INNOVATION: DELINEATING THE PHENOMENON

In this first part, we present the concept of reverse innovation and highlight the current
debates it raises due to its blurred borders with other concepts (a) coupled with an internal
definitional fuzziness (b).

(a) Reverse Innovation: Drawing the Boundaries

MAC 400 is often presented as an archetypal example of reverse innovation. This portable
electrocardiogram created by GE’s engineers in India emerged as a response to the very
specific needs of local physicians working in rural regions and suffering from power short-
age and difficult access to hospitals. Engineers from the Indian subsidiary thus brought
to market a light, portable and easy-to-use device with long battery life and at low cost.
Today this device is regularly used by Indian physicians but also by numerous emergency
units in the US (Govindarajan and Trimble 2012). The ingenuity and creativity of the

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 76 19/10/2017 09:59

 Reverse innovation  77

Indian subsidiary first targeted Indian needs but also succeeded in seducing users in more
advanced countries.
If the overall idea of reverse innovation sounds rather clear, this notion remains,
however, conceptually vague. Indeed, over the last decade, innovation management
­literature has produced a lot of studies (Hart and Christensen 2002; Prahalad 2004;
Immelt et al. 2009; Hang et al. 2010), largely based on empirical evidence, trying to depict
new ways of undertaking and implementing innovation in emerging economies. The
notion of reverse innovation itself flourishes, despite apparent partial or complete overlap
with other concepts. Unfortunately, there seems to be no common ­understanding either
of the very definition of each of those concepts, or regarding their potential interactions/
links (see Table 5.1). Some press articles even use those terms concomitantly in their
titles. “Fathers” of the different terms also exacerbate the confusion by recalling similar
case studies to illustrate their respective concepts. For instance, illustrations of frugal
­innovation provided in Tiwari and Herstatt (2012) are the same cases presented by Immelt
et al. (2009) when configuring the reverse innovation phenomenon.
In a first attempt to differentiate among existing concepts, Brem and Wolfram (2014)
show that reverse innovation, Jugaad innovation and frugal innovation are the three terms
which are the most frequently used and confused in the literature. However, if Jugaad
innovation refers to an innovation developed in a poor-resources environment (Pina e
Cunha et al. 2014) thanks to local actors’ ingenuity and their ability for b ­ ricolage, this
notion does not integrate any explicit reference to the spatial diffusion of the new p­ roducts/
services. Regarding frugal innovation, it accounts for the idiosyncratic and resources-
saving way of designing products or processes implemented in emerging c­ ountries. It
challenges the innovation logics at stake in most advanced countries, where R&D teams
are often looking for improvement and sophistication, instead of m ­ inimizing inessential
costs during the creative, production and marketing process (Radjou and Prabhu 2015;
Burger-Helmchen 2015; Cohendet et al., Chapter 13, this volume). But again this notion
does not include any reference to the geographical diffusion of novelty. Going into more
detail, Brem and Wolfram (2014) assume that reverse innovation, frugal innovation and
Jugaad innovation differ along three criteria: sophistication of products, emerging market
orientation and sustainability allowed.
To sum up, even if recurrently confused with other concepts, reverse innovation sounds
peculiar and deserves to be investigated in more depth.

(b) Reverse Innovation: Reducing Internal Fuzziness

The most authoritative definition of the reverse innovation notion suffers from several
criticisms due to its fuzziness. Hence, according to Govindarajan and Ramamurti (2011),
reverse innovation refers to cases “where an innovation is adopted first in poor ­(emerging)
economies before ‘trickling up’ [i.e. diffusing] to rich countries” (p. 191). One can first
notice a supposition that poor and emerging countries constitute the primary market of
the innovative product/service. In that context, the difference between reverse innovation
and the bottom of the pyramid strategy (Prahalad 2004) sounds really thin.
Moreover, nothing is said regarding the origin of the innovation itself: who gives birth
to the new product/service? Where? Hence, the nationality and size of the ­innovative
firm is not explicit in the definition. Illustrative cases of reverse innovation account

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 77 19/10/2017 09:59

 78  The Elgar companion to innovation and knowledge creation

Table 5.1  Concepts referring to innovation for and from developing economies

Type of innovation Definition References

for/from developing
countries
Disruptive innovation Affordable, “good enough” products that Christensen (1997), Hang
meet consumers’ basic needs at a relatively et al. (2010), Hart and
low cost Christensen (2002)
Innovation at the Innovation developed in and targeting the London and Hart (2004),
bottom of the pyramid large unserved segments of poor people Prahalad (2004)
inhabiting emerging economies
Trickle-up innovation Innovations developed for the bottom of Prahalad (2004)
the pyramid that subsequently trickle up
to the developed world
Indigenous innovation A process of making use of technologies Lazonick (2004), Lu (2000)
transferred from the advanced economies
to develop superior technologies at home
Blowback innovation Innovative solutions developed and Brown and Hagel (2005)
adopted first in emerging markets
Cost innovation Leveraging developing economies’ cost Zeng and Williamson (2007)
advantage to develop innovation at
dramatically lower costs
Reverse innovation Innovations adopted first in poor Govindarajan and
(developing) countries before being Ramamurti (2011),
adopted in developed economies Govindarajan and Trimble
(2012), Immelt et al. (2009)
Shanzhai innovation Chinese low-quality, low-price imitations Peng et al. (2009)
of foreign branded products
Jugaad/Gandhian Innovations developed for the Indian Prahalad and Mashelkar
innovation market that respond to two Gandhian (2010)
tenets: affordability and sustainability
Frugal innovation Innovation that has a large cost advantage, Zeschky et al. (2011)
and in some cases inferior performance,
compared to existing solutions, and
developed in a resource-constrained
context
Resource-constrained Innovation developed in emerging Ray and Ray (2011)
innovation economies in a context characterized
by lower purchasing power, lower
understanding of technology and lower
investment resource

Source:  von Zedtwitz et al. (2015).

for ­strategies of MNCs from advanced countries, but can we also talk about reverse
­innovation when Tata Motors puts its Nano onto the European market, or if an emerging
Vietnamese small and medium-sized enterprise (SME) creates an original product locally
but then succeeds in selling it on US markets? Up to now, authors do not converge on
that point (Radojevic 2015).

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 78 19/10/2017 09:59

 Reverse innovation  79

Lastly, no information is provided on the actual location where the innovation

was imagined and developed. Nevertheless, a product targeted at emerging markets
might have been created and produced in an advanced country, and von Zedtwitz
et al. (2015) ­ precisely build on this weakness to outline various forms of reverse
­innovations. They decompose the flow of innovation into four steps: ideation, develop-
ment, ­commercialization in the primary market and commercialization in a secondary
market. According to them, each of those steps can take place in a specific geographic
area (an advanced country or a d ­ eveloping country, A and D, respectively, in Figure 5.2).
As soon as at least one of those four steps is run in a different geographical area than
the preceding one, the authors consider that a reversion occurs. As a consequence they
conclude that ten different cases of reverse innovation can be distinguished (see Figure
5.2), We are far away from Corsi and Di Minin’s (2014) view, where reverse innovation
“configures a process of ­innovation that no longer sees developed economies as the locus
where new products are conceived, designed and commercialized but instead take on the
role of the last recipient of ­innovations developed in and for emerging economies”, that
is, where reverse innovation exclusively refers to what von Zedtwitz et al. (2015) labeled
the reversed PLC (Product Life Cycle).
In the next part, we go one step further in understanding reverse innovation. We
propose to disentangle two dimensions of reverse innovation that are most of the time
taken for granted: the reversal of the flow of innovation (shifting locus of innovation),
and the reversal of the target of the innovation (shifting focus of innovation).

FROM REVERSE INNOVATION TO REVERSE INNOVATIONS:

FINE-TUNING THE CONCEPT

In this second part, we propose to refine the concept by distinguishing two versions
of reverse innovation (a) and stressing the respective managerial challenges they are
­associated with (b).

(a) Two Types of Reverse Innovation

Looking for original characteristics of reverse innovation, we chose to build on Corsi

and Di Minin’s (2014) argument, according to which combining the disruptive ­innovation
(Christensen 1997) and reverse innovation (Immelt et al. 2009) paradigms might be
­valuable to enlighten the reverse innovation phenomenon. For them, reverse ­innovation
is “a form of disruptive innovation that originates not from the same geographical
market that incumbent companies dominate, but rather from the markets of emerging
economies” (Corsi and Di Minin 2014). They view reverse innovation as a specific type
of disruptive innovation: an international one. Using the disruptive literature in a finer
grained way, we propose to refine the reverse innovation concept itself.
Following Christensen and Raynor (2003) and Govindarajan and Kopalle (2006), we
distinguish between low-end disruptions and (new-market) high-end disruptions. “The
former are those offering lower performance at a cheaper price but no other performance
improvements, while the latter are described as products and services that offer better
­performance on attributes that differ from those valued by mainstream customers.” Put

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 79 19/10/2017 09:59

 Concept Development Primary Market Secondary Market Type of Reverse Innovation

A
A

M4347 - BATHELT_9781786431042_t.indd 80
D
A
A Spill-Back Innovation
D
D
A
A Cost/Capacity Innovation
A
D Reverse Spillover
D
A Developing Country Spillover
D
D
GLOBAL

80
INNOVATION A Front-End Reverse Innovation
A
D Developing Country-Inspired PLC
A
A Double Reverse Innovation
D
D
D
A Developing Country Innovation
A
D Advanced Country-Targeted Innovation
D
A Reversed PLC
Weak Reverse Inno. D
D
Strong Reverse Inno.

Source:  von Zedtwitz et al. (2015).

via University of Durham

Downloaded from Elgar Online at 02/02/2018 01:29:07AM
Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Figure 5.2  A map of global innovation flows with reverse innovations in the strong and weak sense

19/10/2017 09:59
 Reverse innovation  81

differently, in low-end disruption the main source of value creation lies in cost reduction:
the innovation introduces a new set of features and performances, but existing c­ ustomers
are not convinced by this novelty since this new set offers inferior attributes, except
­regarding the price. In high-end disruption, value lies in satisfying new users, thanks to the
provision of completely new attributes (sometimes coupled with the degrading of features
desired by mainstream customers).
Thinking in terms of reverse innovation, up to now, and in most minds, the i­ nnovating
process occurring in emerging countries looks like a “cost innovation”, resulting in
“products or services that initially look inferior to existing ones in the eyes of established
players” (Zeng and Williamson 2007; p. 55). Hence, innovations for and from emerging
markets are mostly examples of low-end disruptive innovations, where the same (or
degraded) functionalities of a given product and service are provided at a dramatically
lower price. The primary targets being populations from emerging countries, that is, less
wealthy ones, new goods/services are reduced to their basics by eliminating unessential
functions to lower costs while maintaining quality. For instance, if the French car maker
Renault has succeeded in launching the Logan at a significantly low price, it is mainly
thanks to the reuse and recombination of former car model mechanical parts (Laperche
and Lefebvre 2012). By offering essential functions at lower cost, those new products/
services thus seduce a large range of customers in advanced countries, whose purchasing
power has shrunk recently.
On the contrary, one can pinpoint cases of products imagined and produced in and for
the emerging market and then sold in developed economies but for different uses than the
ones valued by mainstream customers in advanced countries (traditional) markets. We are
here faced with high-end disruptive innovations: new products and services are developed
in emerging markets and some attributes upgraded (even if degrading others at the same
time). In that case, reverse innovation is not necessarily synonymous with a simplifying
innovative process but might also give birth to more value-added products and services.
Rather than only defeaturing or selling over-simplified technology, MNCs can recombine
the most novel technologies and offer 50 percent of performance at 15 percent of the price
(Govindarajan and Trimble 2012).
This leads us to delineate two types of reverse innovation: a simple reverse one
versus a double reverse one. Reverse innovation might be either unique or multiple,
depending on whether or not MNCs invert the locus of innovation, and/or the focus
of ­innovation, which allows us to build the following typology of reverse innovations
(Table 5.2).

Table 5.2  Two types of reverse innovation

Locus of primary use

Developing country Advanced country
Focus on secondary Existing customers Simple reverse innovation Low-end disruptive
market innovation
New customers Double reverse innovation High-end disruptive
innovation

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 81 19/10/2017 09:59

 82  The Elgar companion to innovation and knowledge creation

(b) Two Types of Managerial Challenges

In both cases new (local) consumers are the targets of innovation on the primary
market (i.e. the developing country) and the prerequisite lies in an innovative foreign
subsidiary. Subsidiaries in the developing countries try to configure new products (less
­sophisticated, low-cost ones) which are affordable and adapted to local populations and
local ­infrastructures. Here the international business literature concludes that s­ ubsidiaries
achieve better innovative performances when they are properly embedded in a double
network (Dörrenbacher and Gammelgaard 2010; Achcaoucaou et al. 2014; Yamin and
Andersson 2011; Birkinshaw and Hood 2001): their internal, intra-MNC network on the
one hand, and their external, local network on the other.
The main difference lies in the characteristics of the secondary market (advanced
country) served by the new product. In the simple reverse innovation case, the innovation
is sold on the old, original and mainstream market in the advanced countries. In that
case, the reversal of innovation denotes the diffusion of the original concept created in
a developing country to a subsidiary located in an advanced country, the latter adding
this new product to its portfolio and commercializing it (or a slight adaptation of it to be
compatible with regulations in advanced countries) for its “old” customers. For instance,
when Renault brought the Logan back to France, the vehicle originally designed and
sold in and for Eastern European countries had been distributed through the French
MNC’s traditional channels and to its traditional customers. In other words, the Logan
became a direct competitor of other vehicles traditionally available on the French private
car market. This may lead to resistance from the advanced country subsidiary who
distrusts defeatured, anonymous products which challenge high standards of technical
­sophistication, traditionally provided in its own advanced home country (Gallis and
Rall 2012). Finally, a shift from internal collaboration between subsidiaries to internal
­competition (Reilly et al. 2012) among them might occur, the new product putting on trial
the advanced subsidiaries’ offer.
The secondary market target in case of a double reverse innovation is completely d ­ ifferent:
the MNC has to try and identify new potential users in advanced countries who might be
interested by the functionalities, the performance and the attributes of the i­nnovation ini-
tially created for customers located in emerging countries. Hence, after the success of its
new electrocardiogram in India, GE explored additional markets for the portable MAC
400 but in advanced countries this time. “It soon found new applications where portability
was critical or space was constrained, such as at accident sites where the port­able machines
could be used to diagnose [cardiac] problems . . . in emergency rooms” (Hang et al. 2010).
In this case, the competition with other products of the advanced subsidiary is less tough
and frontal: big, expensive, highly precise and reliable ­electrocardiograms are still required
to equip hospitals and provide refined diagnosis, whereas MAC 400 proves useful for
emergency units or physicians visiting their patients. We forecast less resistance from the
advanced country subsidiary in adopting the innovation created in emerging countries
than in simple reverse innovation cases. However, in order for double reverse innovation
to take place, the MNC has to identify those new targets in the advanced home country
market. This opens up the question of the identity of the unit which plays this market
discovery role: is it the developing country subsidiary, the advanced country ­subsidiary or
the headquarters? Each answer raises specific managerial challenges.

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 82 19/10/2017 09:59

 Reverse innovation  83

All in all, many international business studies already present subsidiaries as the main
actors of globalized innovation (Harzing and Noorderhaven 2006). Others analyze the
drivers of subsidiaries’ innovation (Reilly and Sharkey-Scott 2014), whereas a third group
investigates the conditions for reverse knowledge transfers (Michailova and Mustaffa
2012; Mudambi et al. 2014). But as far as we know the interplay between those literatures
(required in order to achieve reverse innovation) are understudied and deserve additional
investigation before being able to understand how to implement reverse innovation with
success.
In the concluding part we put reverse innovation into (macro) context and question the
persistency of the phenomenon.

REVERSE INNOVATION AND BEYOND: CHALLENGING THE

PROCESS

In this chapter we aimed at clarifying the reverse innovation phenomenon. Building on

innovation management literature, we disentangled two dimensions of reverse innovation
that were, up to now, taken for granted, and exhibited two ideal-typical cases of reverse
innovation. If such a typology provides a more comprehensive understanding of the
underlying logics at stake, at the same time the future of reverse innovation practices and
their persistency remain an open question.
Indeed, global innovation is a relatively new phenomenon yet a rapidly evolving one.
Innovation did not used to be global; it was intensely local for many centuries. What has
changed in recent years is not so much the speed or intensity of innovation, but where
and how MNCs spend their innovation budget. The challenges of innovation for MNCs
relate to the global organization of the innovation process: reshaping, relocating and
resizing the functional roles within the MNC sound determinant for the future (Doz and
Wilson 2012). Within half a century, the global model of innovation shifted (see Figure
5.3) from Vernon’s (traditional) model, to the transnational innovation model developed
by Bartlett and Ghoshal (1988), which is essentially an extension of the traditional model
(Doz et al. 2015), and to reverse innovation at the beginning of the 21st century. But what
are the next steps of reverse innovation and, in a broader perspective, the next steps of
the globalization of the innovation process?
Global innovation calls today for an interactive and iterative knowledge exchange,
and a knowledge integration process, between home bases (in advanced countries) and
creative local units in emerging markets. For instance, GE’s well-known cost reduction
breakthroughs in medical monitoring devices in India not only required GE’s R&D
efforts in India, but also involved competences and technologies from Norway, Germany,
the US and Japan. In other words (see “reverse [enriched] innovation” in Figure 5.3), the
­innovation process becomes host-centric, driven by low cost and rugged functionality
needs, but at the same time draws on technological contributions from the most advanced
R&D centers around the world.
Hence, many authors claim that the next step will be a rebalancing of activities
between advanced and developing countries (Doz et al. 2015; Radjou and Prabhu
2015). In the coming years, as the global economy becomes more tightly integrated and
­interconnected, resourceful innovators (whatever their geographical locations) should

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 83 19/10/2017 09:59

 84  The Elgar companion to innovation and knowledge creation

Traditional Reverse Reverse Global

(enriched)

H H H

“Host”-centric Host-centric Poly-centric

“Home”-centric
networked
Challenge to Market insights
innovate and technological
Markets and
• Performance contributions from
“Project” innovations competencies
• Cost multiple sources
into the world from the world
(export, invest, over
license) Reversing the Knowledge attractor
knowledge flow in host country

Source:  Adapted from Doz et al. (2015).

Figure 5.3  The global innovation process

be able to combine their ingenuity and expertise with specialized R&D competences
­(whatever their g­ eographical locations) to co-create breakthrough frugal solutions that
no single region could have entirely conceived on its own. One might designate this
­synergistic form of collaboration as globally networked innovation (on the extreme right
of Figure 5.3): markets, money, competences and customers are everywhere on the planet
and are multi-connected. In such a context, the challenge would not be about reversing
the flow anymore, but rather about having constant flows in every direction, reverse
­innovation being thus labeled as a transient phenomenon.

REFERENCES

Achcaoucaou, F., Miravitlles, P. and Leon-Darder, F. (2014) “Knowledge sharing and subsidiary R&D mandate
development: a matter of dual embeddedness”, International Business Review, 23, pp.76–90.
Bartlett, C. A. and Ghoshal, S. (1988) “Organizing for worldwide effectiveness: the transnational solution”,
California Management Review, 31 (1), pp. 54–74.
Birkinshaw, J. and Hood, N. (2001) “Unleash innovation in foreign subsidiaries”, Harvard Business Review, 79
(3), pp. 131–138.
Brem, A. and Wolfram, P. (2014) “Research and development from the bottom-up: introduction of terminologies
for new product development in emerging markets”, Journal of Innovation and Entrepreneurship, 3, article 9.
Brown, S. J. and Hagel, J. (2005) “Innovation blowback: disruptive management practices from Asia”, McKinsey
Quarterly, no. 1, pp. 34–45.

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 84 19/10/2017 09:59

 Reverse innovation  85

Burger-Helmchen, T. (2015) The Economics of Creativity: Ideas, Firms and Markets, Abingdon, UK: Routledge.
Christensen, C. M. (1997) The Innovator’s Dilemma, Boston, MA: Harvard Business School Press.
Christensen, C. M. and Raynor, M. E. (2003) The Innovator’s Solution: Creating and Sustaining Successful
Growth, Boston, MA: Harvard Business School Press.
Cohendet, P., Parmentier, G. and Simon, L. (2017) “Managing knowledge, creativity and innovation”, in
H. Bathelt, P. Cohendet, S. Henn and L. Simon (eds), The Elgar Companion to Innovation and Knowledge
Creation, Cheltenham, UK, Northampton, MA: Edward Elgar Publishing, 197–214.
Corsi, S. and Di Minin, A. (2014) “Disruptive innovation in reverse: adding a geographical dimension to
­disruptive innovation theory”, Creativity and Innovation Management, 23 (1), pp. 76–90.
Dörrenbacher, C. and Gammelgaard, J. (2010) “Multinational corporations, inter-organizational networks and
subsidiary charter removals”, Journal of World Business, 45 (3), pp. 206–216.
Doz, Y., Ben Mahmoud-Jouini, S., Charue-Duboc, F. and Burger-Helmchen, T. (2015) “Global organization of
innovation processes”, Management International, 19, pp. 112–120.
Doz, Y. and Wilson, K. (2012) Managing Global Innovation: Framework for Integrating Capabilities around the
World, Boston, MA: Harvard Business Review Press.
Gallis, M. and Rall, E. L. (2012) “Global development cycles: redefining technological innovation cycles and
their impacts within a global perspective”, International Journal of Innovation and Technology Management,
9, pp. 1–21.
Govindarajan, V. and Kopalle, P. K. (2006) “The usefulness of measuring disruptiveness of innovations ex post
in making ex ante predictions”, Journal of Product Innovation Management, 23, pp. 12–18.
Govindarajan, V. and Ramamurti, R. (2011) “Reverse innovation, emerging markets, and global strategy”,
Global Strategy Journal, 1 (3–4), pp. 91–205.
Govindarajan, V. and Trimble, C. (2012) Reverse Innovation: Create Far from Home, Win Everywhere, Boston,
MA: Harvard Business Review Press.
Hang, C.-C., Chen, J. and Subramanian, A. M. (2010) “Developing disruptive products for emerging economies:
lessons from Asian cases”, Research-Technology Management, 53 (4), pp. 21–26.
Hart, S. L. and Christensen, C. (2002) “The great leap: driving innovation from the base of the pyramid”, Sloan
Management Review, 44 (1), fall, pp. 51–56.
Harzing, A. W. and Noorderhaven, N. G. (2006) “Knowledge flows in MNCs: an empirical test and extension of
Gupta and Govindarajan’s typology of subsidiary roles”, International Business Review, 15 (3), pp. 195–214.
Immelt, J. R., Govindarajan, V. and Trimble, C. (2009) “How GE is disrupting itself ”, Harvard Business Review,
87 (10), pp. 56–65.
Kenney, M., Massini, S. and Murtha, T. P. (2009) “Offshoring administrative and technical work: new fields for
understanding the global enterprise”, Journal of International Business Studies, 40, pp. 887–900.
Laperche, B. and Lefebvre, G. (2012) “The globalization of research and development in industrial corporations:
towards ‘reverse innovation?’”, Journal of Innovation Economics and Management, 2, pp. 53–79.
Lazonick, W. (2004) “Indigenous innovation and economic development: lessons from China’s leap into the
information age”, Industry and Innovation, 11, pp. 273–297.
London, T. and Hart, S. L. (2004) “Reinventing strategies for emerging markets: beyond the transnational
model”, Journal of International Business Studies, 35, pp. 350–370.
Lu, Q. (2000) China’s Leap into the Information Age: Innovation and Organization in the Computer Industry,
Oxford: Oxford University Press.
Michailova, S. and Mustaffa, Z. (2012) “Subsidiary knowledge flows in multinational corporations: research
accomplishments, gaps and opportunities”, Journal of World Business, 47, pp. 383–396.
Mudambi, R., Piscitello, L. and Rabbiosi, L. (2014) “Reverse knowledge transfer in MNEs: subsidiary
­innovativeness and entry modes”, Long Range Planning, 47, pp. 49–67.
Peng, S. Z., Xu, Y. F. and Lin, Q. X. (2009) “The great revolution of Shanzhai economy: the innovation comes
from imitation”, Taipei: Showwe Information Co., Ltd.
Pina e Cunha, M., Rego, A., Oliveira, P., Rosado, P. and Habib, N. (2014) “Product innovation in resource-poor
environments: three research streams”, Journal of Product Innovation Management, 31, pp. 202–210.
Prahalad, C. K. (2004) The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, Upper
Saddle River, NJ: Pearson Education.
Prahalad, C. K. and Mashelkar, R. A. (2010) “Innovation’s Holy Grail”, Harvard Business Review, July–August,
pp. 2–10.
Radjou, N. and Prabhu, J. (2015) Frugal Innovation: How to do More with Less, London: The Economist.
Radjou, N., Prabhu, J., Ahuja, S. and Roberts, K. (2012) Jugaad Innovation: Think Frugal, Be Flexible, Generate
Breakthrough Growth, San Francisco, CA: Jossey-Bass.
Radojevic, N. (2013) “Reverse innovation and the bottom-of-the-pyramid proposition: new clothes for old
­fallacies?”, available at SSRN: http://ssrn.com/abstract52461092.
Radojevic, N. (2015) “Much geo-economic ado about primary market shift: reverse innovation ­reconceptualised”,
Management International, 19, pp. 70–82.

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 85 19/10/2017 09:59

 86  The Elgar companion to innovation and knowledge creation

Ray, S. and Ray, P. K. (2011) “Product innovation for the people’s car in an emerging economy”, Technovation,
31, pp. 216–227.
Reilly, M., Scott, P. and Mangematin,V. (2012) “Alignment or independence? Multinational subsidiaries and
parent relations”, Journal of Business Strategy, 33, pp. 4–11.
Reilly, M. and Sharkey-Scott, P. (2014), “Subsidiary innovation: a phenomenon under threat?”, Technovation,
34 (3), pp. 190–202.
Tiwari, R. and Herstatt, C. (2012) “India – a lead market for frugal innovations? Extending the lead
market theory to emerging economies”, Hamburg University of Technology, Technology and Innovation
Management, Working Paper, no. 67.
Vernon, R. (1966) “International investment and international trade in the product life cycle”, Quarterly Journal
of Economics, 80 (2), pp. 190–207.
von Zedtwitz M., Corsi, S., Søberg, P. and Frega, R. (2015) “A typology of reverse innovation”, Journal of
Product Innovation Management, 32, pp. 1–12.
Yamin, M. and Andersson, U. (2011) “Subsidiary importance in the MNC: what role does internal e­ mbeddedness
play?”, International Business Review, 20 (2), pp. 151–162.
Zeng, M. and Williamson, P. J. (2007) Dragons at Your Door: How Chinese Cost Innovation Is Disrupting the
Rules of Global Competition, Boston, MA: Harvard Business School Press.
Zeschky, M., Widenmayer, B. and Gassmann, O. (2011) “Frugal innovation in emerging markets”, Research-
Technology Management, 54 (4), pp. 38–45.

Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon - 9781782548515
Downloaded from Elgar Online at 02/02/2018 01:29:07AM
via University of Durham

M4347 - BATHELT_9781786431042_t.indd 86 19/10/2017 09:59