Bastian Widenmayer

Frugal Innovation in Emerging Markets

OVERVIEW: The quality and number of innovations developed by multinational companies from emerging countries is increasing dramatically. In particular, frugal innovations—“good-enough,” affordable products that meet the needs of resource-constrained consumers—have created tremendous demand in emerging markets. While the development of such products has largely been the domain of local corporations in emerging countries, Western corporations have recently started to engage in frugal innovation as well. This is a difficult task for Western firms, however, because their business models and organizational structures are traditionally designed for the development of advanced products for the affluent few at the top of the economic pyramid. Using Swiss weighing-instrument manufacturer Mettler Toledo as a case example, this article suggests that frugal innovations are largely developed by local R&D subsidiaries of Western firms in emerging countries. A substantial degree of autonomy for those local R&D subsidiaries, including product-portfolio responsibilities, can facilitate the development of frugal innovation.

Organising for reverse innovation in Western MNCs: the role of frugal product innovation capabilities

The burgeoning phenomenon of reverse innovation – i.e., innovations which are adopted first in the developing world – has attracted much academic and managerial attention. However, while existing literature has extensively discussed the risks and opportunities of reverse innovation for Western multinational companies (MNCs), there is little empirical insight into the question of how reverse innovation is organised in the firm. This article investigates how Western MNCs of the healthcare and electronics industries organise their international R&D for reverse innovation. Based on the insights of four case studies, we find that the location of the product mandate (i.e., at the headquarters or the subsidiary) is independent of the MNC’s ability to generate reverse innovation. In contrast, we find that the design and development of reverse product innovations are always located in the MNC’s subsidiary based in a resource-constrained environment. We argue that the development of frugal product innovation capabilities is a critical success factor in the development of reverse innovation. The article holds important implications for theory and management practice.

Opening Up Science: Towards an Agenda of Open Science in Industry and Academia

The shift towards open innovation has substantially changed the scientific and practical perception of corporate innovation. While scientific studies on open innovation are burgeoning, present research underlies a business-centric view that has focused on the back-end of the innovation process. The impact and implications of open innovation on academic and industrial science at the very front-end of the innovation process have so far been neglected. Our paper presents a conceptualization of open science and research as a peculiarity under the roof of open innovation. We propose four perspectives, outline current trends, and present directions for future developments.