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How GE is Disrupting Itself

When I took a two-year leave from the Tuck School to serve as Professor in Residence and Chief Innovation Consultant at General Electric, I ended up being less of the expert, and more of a student.

Now, my co-authors - Jeffrey Immelt and Chris Trimble - and I, have written a short article in the October Harvard Business Review which highlights some of our thoughts in this new reset world.

We learned that in order to succeed, we had to challenge two assumptions most global companies hold near and dear to their thinking:

1) The economies of poor countries develop in the same way that rich countries did, and
2) Products created to address poor countries’ special needs can’t be sold in the rich world because they’re not good enough to compete against existing solutions.

These assumptions we found were not true. In fact, the opposite is already happening. The reality is poor countries do not follow the same path and can actually jump ahead of rich countries. They are able to do so because of their willingness to adopt breakthrough innovations long before the rich world is ready for them.

With per capita incomes that are only a fraction of those in the rich world, they are more than happy to adopt high-tech solutions that deliver decent performance at an ultra-low cost — a 50% solution at a 5% price. We also found that because of their huge populations, countries like China and India are likely to tackle many sustainability problems years or even decades before the rich world.

In addition, we quickly saw that products created to serve these low-cost markets can also be used to create brand new markets in the developed world -- in other words, address unmet needs by creating dramatically lower price points or pioneering new applications.

In essence, that's what the article is about.

HBR

Download the article here, and sign up for our complimentary Innovation Quarterly newsletter here >>

For more insights visit GEReports.com:

- Reverse innovation: Building GE’s local growth model >>
- Reverse innovation: How GE is disrupting itself >>

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VG has touched a chord with this article in Harvard Business Review.  How GE is Disrupting Itself describes the concept of reverse innovation - how products developed in and for low-cost countries (like India and China) by multinationals (like GE)... [Read More]

Comments

This is fascinating, VG. I see how this is the future of global development. Hopefully we'll see this "reverse innovation" mindset spreading across other American companies as well.

Thanks again.

Thank you, Professor Govindarajan, for helping GE and other American multinationals see the light. I'm convinced that without this "reverse innovation" approach, the demise of American business would have been greatly accelerated. Now we have a chance. Don't blow it GE. You (GE) can help other US businesses become more competitive by leading the way.

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