Emerging Economies are Emerging as Innovators

The April 17 to 23, 2010 edition of The Economist has a special report on innovation in emerging markets. It makes the point strongly that firms that are battling for these new, different and rapidly growing markets are innovating both in products and organization in order to survive and thrive. Of course, some of the innovations intended for these new markets will prove to be competitive in existing markets (as happened in the past when innovations intended for the developing markets in the United States proved to be competitive in Europe).

Here are some product innovations from the report:

• GENERAL ELECTRIC’S health-care laboratory in Bangalore has developed a hand-held electrocardiogram (ECG) that is "small enough to fit into a small backpack and can run on batteries as well as on the mains. This miracle of compression sells for $800, instead of $2,000 for a conventional ECG, and has reduced the cost of an ECG test to just $1 per patient."
• Tata Consultancy Services (TCS) has developed a water filter that uses rice husks to purify water. "It is not only robust and portable but also relatively cheap, giving a large family an abundant supply of bacteria-free water for an initial investment of about $24 and a recurring expense of about $4 for a new filter every few months."
• "Tata Motors has produced a $2,200 car, the Nano.
• "Godrej & Boyce Manufacturing, one of India’s oldest industrial groups, has developed a $70 fridge that runs on batteries, known as “the little cool”.
• "First Energy, a start-up, has invented a wood-burning stove that consumes less energy and produces less smoke than regular stoves.
• "Anurag Gupta, a telecoms entrepreneur, has reduced a bank branch to a smart-phone and a fingerprint scanner that allow ATM machines to be taken to rural customers."

Of course innovations of this kind will not only find markets in India and China, but eventually in Africa and Latin America, and indeed in Europe and the United States.