The trajectory of innovation in countries such as India is taking a different path from the Industrial Revolution in the West. Communications technology such as television and cell phones have leaped across to India. Bottom-of-the-pyramid thinking had created huge markets based on $20 cell phones and $0.02 sachets of shampoo. But microfinance and technology are teaming up to drive further innovation into rural markets.
Outlook Business (India) has an excellent article on the subject. Pictured on the bullock cart below are the $70 red “refrigerator” called ChotuKool (Little Cool) designed by Indian company Godrej & Boyce. Next to it is a blue carton containing the battery-powered portable water-purification system called Pureit, designed and sold by Unilver’s India unit.
MicroFinance institutions suchas SKS Microfinance and Basix are enabling the purchase of such devices in rural India, where 700 million people make less than $2 per day. Often these institutions enable women to become entrepreneurs. In the long run this will improve nutrition, literacy, create smaller families and contain population growth in addition to improving the lots of rural consumers.
Read the entire article here. Western media is also starting to report on the same phenomena but their reporting carries culturally silly terms such as “reverse innovation”. The implication somehow is that Innovation from India is backwards. The term is attributed to Jeff Immelt of General Electric, who knows better since most of his company’s revenue and profits comes from outside the USA. You wouldn’t call those “reverse profits”, now Mr Immelt? Having heard Jeff speak about globalization before, I am sure that the Journal probably took his comment out of context. But the India Expert cautions its readers to not proliferate the term, especially in conversations with Chinese and Indian counterparts.