Innovation for Emerging Markets

A 'sandpit' led by Professor John Bessant to explore the challenges posed by innovation for emerging markets and to identify possible cross-disciplinary projects for further development

John Bessant holds the Chair in Innovation and Entrepreneurship in the Business School. He has written over 20 books and monographs on this topic, including 'Managing Innovation' and 'High Involvement Innovation', and lectures and consults widely around the world.

Innovation for emerging markets

Most of the products/services that we innovate are targeted at a market of around 1 billion people.  That’s plenty to work with – but what about the rest of the world?  The nearly 5 billion who earn less than $2/day on average, whom we have traditionally excluded from our thinking about business and markets.  What might happen if we looked at this as a huge potential market?  What would products and services for this group look like, and how would we create and deliver them?  It’s not impossible; we know about successful business models built on low cost and high volume – think of the low cost airline industry for example.  And, of course, this was the thinking behind Henry Ford with his dream of ‘a car for Everyman at a price everyone can afford’.

But delivering on this challenge – meeting the needs of the billions of people at ‘the bottom of the pyramid’  - will require innovation. It will need a radical rethink about target costing, product and service development, process change, etc.  Whilst this might be intellectually stimulating, it is also becoming a key strategic issue for two reasons:

•       First, the market potential is huge and it is precisely in these emerging  ‘bottom of pyramid’ markets, such as Africa, Latin America and rural Asia, that much of the future growth is likely to come.  So there is a huge opportunity for UK and European organizations to open up new market opportunities with new products and services.

•       And second, because solutions which are developed in this crucible may well find their way back to our own mainstream in what is called ‘innovation blowback’.  What happens when the next Henry Ford comes up with a design for a car targeted at the emerging market, which retails at £1500?  Arguably it doesn’t simply stay in that marketplace, but poses a threat in the same way that low cost airlines did to the established airline industry.  And what if there were an electric variant already in prototype development?  This isn’t an imaginary scenario – the Tata Nano car poses just such a challenge and it goes on sale next year.

The 'Sandpit'

This ‘sandpit’explored the challenges posed by innovation for emerging markets. After an introduction to the challenges and the nature of the 'innovation space by John Bessant, the 20 participants added their ideas to an 'ideas wall'. These were clustered into themes, each of which was taken by a group to discuss possible cross-disciplinary projects in these areas.

Each group presented the main points from their discussions in their 'lift speeches', concentrating on what they would plan to do, how they would do it, who would do it and why. The five topics presented were:

• "Emergency rescue in India";
• "Innovating the innovation process";
• "How innovation is transferred between markets";
• "Education in emerging markets"; and
• "Sustainability, renewable energy and innovation".

The afternoon concluded with a discussion of the funding opportunities and support available to take ideas forward, which include the BTG development fund.

Current external funding opportunities include the Indian-European Research Networking Programme call from ESRC with a deadline of 15th September and Phase 2 of the UK-India Education and Research Initiative (UKIERI).

More information

Further information and case studies are available on the Managing Innovation website.

You can download the BTG Innovation for Emerging Markets slides