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Innovation in emerging markets

2012

Competition in emerging markets is growing ever fiercer. Local companies are increasingly investing in R&D and launching competitive products. China and India are the biggest engines driving innovation, together responsible for 20% of global investment in R&D. Simple, cost-effective items – "frugal products" – are particularly successful in the lower and middle market segments. Often these products can later be exported to Western markets, a process known as "reverse innovation".

Western companies looking to exploit the great innovation potential in emerging markets should carry out key value-creation activities locally, from development and production to sales. They must focus more on modular products based on standard components.

These are the key findings of the study "Emerging markets are changing the global innovation agenda" in the series "8 Billion Business Opportunities". This study forms part of the GLOBAL TOPICS initiative at Roland Berger.

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