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Reverse innovation: A new paradigm of innovation Evidence from Chinese markets

Juan Shan, Miqdad Ali Khan

This study discussed various stages of multinational corporations (MNCs) development process before arriving to reverse innovation. Based on the analysis of most recent development in the literature and then using three case studies, the study shows how by virtue of reverse innovation MNCs can be more successful in emerging markets. Our study found that MNCs must understand that they need to identify local constraints and opportunities in the local markets and innovate according to the needs of the customers in those markets. MNCs can develop and use local capabilities by developing partnerships or acquiring local companies. There is also a need of an ongoing R&D effort to continuously improve present innovation and guard against competition at the same time. Based on the previous research about reverse innovation, disruptive innovation, frugal innovation, inclusive innovation and BOP innovation, this paper compares various concepts and provides a comprehensive elaboration of change in paradigm of innovation using cases from Chinese market in an original way.