WisconsInnovation

When I hear the word, "innovation" I typically think of high-tech and expensive new offerings such as the iPhone, Dyson vacuum, and the GM Volt. Indeed, these are the types of innovations that grab headlines and engender high levels of consumer awareness. However, these offerings appeal to only a small subset of consumers (i.e., those living in advanced consumer economies). According to Mahajan and Banga (2005), nearly 90% of our planet's inhabitants live in nations with a per-capita GDP of less that $10,000 (US). Clearly, these individuals have a much different set of consumer needs and desires than the typical American and are highly unlikely to be able to afford (or even need) an iPhone, Dyson, or Volt. Consequently, there is a tremendous need for low-tech innovations geared to this vast population of consumers. While this need appears to have been ignored by most corporations, it has attracted the attention of Professor Amy Smith, who directs MIT's D-Lab, which focuses on creating innovative solutions for inhabitants of developing nations. This lab has produced a number of interesting innovations such as non-toxic charcoal made from corn husks and sugar cane. The importance of affordable low-tech innovation has also been recently recognized by Nokia researcher Jan Chipchase, who has discovered that in developing nations such as India, local street vendors who recycle and reuse old cell phones are posing a major competitive threat. Given current growth projections, over the next decade, the population of developed nations will shrink and get older, while the population of developed nations with grow and get younger. Thus, innovation directed towards the developing world is likely to be the main growth are for most firms. Is your firm prepared to meet this challenge?