How Emerging Markets are Reshaping the Innovation Architecture of Global Firms

Forthcoming, Review of Marketing Research

30 Pages Posted: 29 Jul 2013

See all articles by Venkatesh Shankar

Venkatesh Shankar

Texas A&M University - Mays Business School

Nicole Hanson

Texas A&M University - Department of Marketing

Date Written: July 1, 2013

Abstract

In recent years, there has been a fundamental shift in the innovation architecture of global firms. Rapid growth of the middle class in emerging markets, led by China, India, Brazil and Russia, is fueling the need to create affordable innovations in local markets. Such local innovations tend to have a wider global appeal due to commonalities in consumer demand and infrastructure across many developing markets. Additionally, the severity of economic downturns in developed markets is creating increased consumer demand for affordable innovations. Thus, these innovations are reshaping the innovation architecture of many global firms, such as G.E., PepsiCo, and Hyundai. We propose a framework for analyzing: the effects of emerging markets on the innovation architecture; the potential innovation strategies that leverage these effects; and the consequences of these innovation strategies. We discuss the theoretical and managerial implications of our framework.

Keywords: Innovation, Emerging Markets, New Product Development, Reverse Innovation, Affordable Innovation

JEL Classification: F60, F21, F23, L10, M10, M30, O31, O32

Suggested Citation

Shankar, Venkatesh and Hanson, Nicole, How Emerging Markets are Reshaping the Innovation Architecture of Global Firms (July 1, 2013). Forthcoming, Review of Marketing Research, Available at SSRN: https://ssrn.com/abstract=2298867 or http://dx.doi.org/10.2139/ssrn.2298867

Venkatesh Shankar (Contact Author)

Texas A&M University - Mays Business School ( email )

Wehner 401Q, MS 4353
College Station, TX 77843-4218
United States
979-845-3246 (Phone)

HOME PAGE: http://www.venkyshankar.com

Nicole Hanson

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

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