Innovation In the Emerging Markets - Essay Example

Innovation is not just a new idea nowadays, it has become something bigger for almost any type of industry that offers products or business. In fact, innovation is already a competitive advantage that most businesses try to integrate into their system so they can produce products that completely satisfies the customers. In the case of emerging markets, innovation comes in the form of compact sized products that can fulfill important functions such as the MAC 400, a hand-held electrocardiogram that can easily fit into a backpack.

Whereas in past few years, innovation in emerging markets are often perceived as cheap, made of poor quality and utterly useless. In short, it’s just something fancy that can suit the taste of some people. In the case of MAC 400, innovation even meant a lower price tag since it sells for a third of a price of a conventional ECG as reported in an article in the Economist last 2010. Indeed, continuous innovation would certainly usher better medical products that are even handy and provide quick diagnosis of a medical condition.

Doctors can go to remote places and attend to indigent patients who need an MRI using MAC 400. Although big companies are creating more innovative products to suit customer’s needs based on marketing research, a newer form of innovation has been shaped for the past few years. This innovation is a far cry from complex systems that sell for thousands of dollars; rather, the new trend in innovation is geared towards addressing basic concerns of humanity such as potable drinking water. This type of innovation is known as” reverse innovation “or” frugal innovation”.

The World Health Organization’s Millennium Development Goals for 2015 included providing potable drinking water to 884 million people who still depend on unsafe water sources for their drinking, cooking and sanitation. Although the goal is gradually being reached, many regions in different parts of the world need potable drinking water at less cost. Innovation of emerging markets such as the rapidly growing Tata Consultancy Services in Chennai that produces a water-filter using rice husk has responded to this global problem.

The innovation hits two birds: reducing the volume of rice husks ( a waste product) and providing low-cost water filtration system. Poor families can finally afford to drink clean water for just $4 a month. Simple yet very effective. Rethinking Innovation is a challenge to western markets but abundant in emerging countries like China and India. The nature of the market is complex and consumers buying power range from poverty level to the filthy rich. Another driving force behind rethinking innovation by making it attuned to the masses is obvious: volume is power.

Apparently, emerging markets are naturally driven to innovation because they are comfortable with complexities. The process has changed the supply system as customers dictate what products they need. Gone are specialized products that cater to a few niches since they are replaced by a one-size fits all products. Ever since the Japanese came with the just-in-time and lean production methods, good became cheaper which attracted millions of customers. A small improvement in the lives of average income families such as being able to buy a PC for their children is one big step for emerging markets.

No wonder, multinationals are trooping to China and India where research and development is a priority. As emerging markets come up with innovation, more and more people would be able to afford goods that can make life convenient. This is the biggest reward for innovation after all- making a difference in people’s lives. References: "The World Turned Upside Down." The Economist (April 2010). economist.com. Web. 1 Feb. 2011. “First Break All the Rules”. The Economist 1.1( April 2010) economist.com. Web. 1 Feb. 2011.