Adopting Open Innovation to Stimulate Frugal Innovation and Reverse Innovation

9 Pages Posted: 10 Jan 2013 Last revised: 4 May 2015

Date Written: January 8, 2013

Abstract

Frugal innovation and reverse innovation have very recently emerged as interesting concepts. Frugal innovation is based on cost constraints to serve low-income customers in developing countries. When frugal innovation comes to developed countries and becomes commercially successful it is considered as reverse innovation. Recently, many companies, such as GE, Siemens, Procter and Gamble, etc. have engaged heavily in frugal innovation and in reverse innovation. Open innovation, on the other hand, has not been considered in the context of low-income customers in developing countries. We argue that using open innovation concept in developing countries may boast frugal innovation and reverse innovation. Consequently, quality product with low-income will be widely available not only in developing countries but also in developed countries. Hence, western companies need to change their long hold business strategies and reshape their business models. This study aims to illustrate why western companies need to be aware of and take step to become successful in the turbulent business world.

Keywords: Open Innovation, Frugal Innovation, Reverse Innovation

Suggested Citation

Hossain, Mokter, Adopting Open Innovation to Stimulate Frugal Innovation and Reverse Innovation (January 8, 2013). Available at SSRN: https://ssrn.com/abstract=2197782 or http://dx.doi.org/10.2139/ssrn.2197782

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