Forward in Reverse: How “Reverse Innovation” Helps Win Future Markets

GE Healthcare’s Lullaby baby warmers have grown popular with doctors in Europe’s modern maternity wards, but their birthplace is far more humble. The machines, which help newborns adjust to room temperature, have been developed to salve an urgent need half the world away, in India. “India produces one Australia every year, as many as 30 million newborns” says GE Healthcare’s Manoj Menon. But the majority of the births happen in an unsupervised manner, and even hospitals have to deal with erratic electricity and lack of affordable equipment, Menon says. As a result, India has one of the world’s highest mother and infant mortality rates.

But most of these deaths are preventable with proper care. GE attacked the problem by developing the Lullaby. The machine’s easy controls, pictogram buttons, and simple dials require minimal training and allow nurses and doctors focus on the baby, not switches. It can be also connected to a battery to bridge brownouts.

World citizen: GE’s Lullaby baby warmer was developed to improve infant care in India. Now it keep babies warm around the world.

The machine, which GE developed in Bangalore, and launched in 2009, costs $3,000 in India. But its appeal is universal. “This made-in-India product is now sold in [over eighty] countries, including rich countries in Western Europe,” says Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business and founding director of the school’s Center for Global Leadership.

Govindarajan just wrote a new book on the topic titled Reverse Innovation: Create Far from Home, Win Everywhere and the Lullaby warmer is a prime example of the “reverse innovation” concept. Govindarajan argues that to succeed, large companies must learn to innovate in developing markets, solve their pressing needs, and then bring the results back home. “A reverse innovation methodology requires companies to fundamentally rethink the price-performance paradigm, and that begins with understanding the customer problem,” says Govindarajan. “Once you do that, your solutions become very novel.”

For GE, the Lullaby was just a starting point. The company has since developed Lullaby LED phototherapy unit, which incorporates LED green technology into the warmer, as well as the Vayu low-cost ventilator, also innovated in India, which can cover up to 80 beds in an intensive care unit with its four-hour battery life.

Developing economies already represent more than two thirds of future global GDP growth and reverse innovation is a handy tool for catching some of that momentum. Govindarajan’s book presents additional case studies of successful reverse innovations by companies and organizations such as Procter & Gamble, EMC Corporation, Deere & Company, and Partners in Health.

Govindarajan says that “GE is one of the leading companies in the area.” He says: “Every GE employee must have a reverse innovation mindset. It’s the biggest opportunity for GE going forward.”

Crowdsourcing for Humvees

Early last year, the U.S. military’s high-tech research arm, the Defense Advanced Research Project Agency (DARPA), tapped an online community of designers and car enthusiasts to whip up from scratch a fully deployable military vehicle. Four months later, Local Motors in Phoenix, which hosted the DARPA challenge, delivered the FLYPmode car, “the first military crowdsourced vehicle,” according to Popular Science. “It blows my mind,” Local Motors CEO Jay Rogers told the magazine. “It was just an idea in somebody’s head. We did it through crowdsourcing, and it’s a car that could be used, and its data is freely available for people to mod it and go forward.”

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[image src="http://files.gereports.com/wp-content/uploads/2012/04/FLYPmode1.jpg"]
The FLYPmode is the first crowdsourced military vehicle. Photos courtesy of Local Motors.
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The FLYPmode is the first crowdsourced military vehicle. Photos courtesy of Local Motors.
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The FLYPmode is the first crowdsourced military vehicle. Photos courtesy of Local Motors.
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The FLYPmode is the first crowdsourced military vehicle. Photos courtesy of Local Motors.
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The FLYPmode is the first crowdsourced military vehicle. Photos courtesy of Local Motors.
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That’s the idea behind a new project between GE Global Research, DARPA, and the Massachusetts Institute of Technology. Developing new military technology is a pricey exercise. But what if you could slash costs and build your idea by tapping the wisdom of the crowd? GE and MIT said today that they would design a “crowd-driven ecosystem for evolutionary design,” or CEED, for DARPA’s vehicleforge.mil project. What’s that? In DARPA talk that is “an open source development collaboration environment and website for the creation of large, complex, cyber-electro-mechanical systems by numerous unaffiliated designers,” say, like the FLYPmode.

In simple terms, the military research agency wants to tap the power of Internet, which it incidentally help develop in the 1960s, and build a new secure crowdsourcing platform where users could freely share, re-use, and remix their ideas and vet them with the crowd before they move on. It is essentially an evolutionary digital feedback loop spun from sophisticated software, where users pick and tweak the best ideas, and advance them to the next level. Only the strongest survive and get funding. “The development of new collaborative software architecture is changing the manufacturing paradigm to a more dynamic and distributive model,” says Joseph Salvo, manager of the Business Integration Technologies Lab at GE Global Research.

The news comes on the heels a $200 million government push into big data announced last week. “Data, in my view, is a transformative new currency for science, engineering, education, commerce and government,” Farnam Jahanian, head of the National Science Foundation’s computer and information science and engineering directorate, told the New York Times.

The new crowdsourcing platform fits well with GE’s efforts to build the Industrial Internet. Such “Internet of Things” will allow people and systems gather and exchange gigabytes of data, design tools and speed up the development of highly complex industrial systems connecting jet engines, appliances, and medical devices. Last year, GE launched a broad foray into big data and opened a new global software headquarters in the Bay Area, in San Ramon, California. It will employ 400 new software engineers who will work to marry software, big data, and new product development. Could FLYPjet engine be next?

Incidentally, this is not the first time GE has helped design a military vehicle. In the 1960s it built a working walking truck. See the video here.