Emerging Markets Drive
nnovation
As India and China lead global innovation, it is clear the emerging markets are no longer R&D ‘workbenches’ of the West.
C
ompetition in emerging markets is growing fiercer than ever before. Local companies are increasingly investing in R&D and launching competitive products. China and India are the biggest engines driving
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october 2012 | industry 2.0
innovation. Together, they are responsible for 20 per cent of global investment in R&D, finds a recent study. According to Roland Berger Strategy Consultants, simple, cost-effective items—‘frugal products’—are particularly successful in the lower and middle
- technology management for decision-makers
market segments. Often these products can later be exported to Western markets, a process known as ‘reverse innovation’. The key findings of the new study “Emerging markets are changing the global innovation agenda” in the series “8 Billion Business Opportunities” are described hereafter. In 2012, firms around the world will invest a total of USD 1.4 trillion in research and investment activities, 5.2 per cent more than in the previous year. But how and where that money is being spent is undergoing a fundamental transformation. “Companies in emerging markets are no longer simply the ‘workbench’ of industrialised nations. Local companies
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