Towards a Classification Framework for Concepts of Innovation for and From Emerging Markets

Towards a Classification Framework for Concepts of Innovation for and From Emerging Markets

Martin Albert (Chemnitz University of Technology, Germany) and Stefan Huesig (Chemnitz University of Technology, Germany)
DOI: 10.4018/978-1-5225-7638-9.ch004

Abstract

A closer look at innovation for and from emerging markets reveals that a variety of different terms and concepts related to this type of innovation exist. The objective of this conceptual work is to develop a theoretical classification framework based on a comprehensive literature overview that provides a starting point for structuring these different terms and concepts. After a first investigation and comprehensive search for the keywords “reverse,” “frugal,” “jugaad,” and “bottom of pyramid” in the Google Scholar database, 19 different texts were identified and classified for further analysis. As a result, 33 identified terms concerning innovation for and from emerging markets, various spellings and synonyms are presented. Finally, a theoretical-based classification framework is derived and the criteria “market orientation,” “determinants,” “nature,” “sophistication,” “sustainability,” “novelty,” and “innovator type” was proposed. This classification framework could be used for further research and teaching in innovation, responsible, and sustainable management disciplines.
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Introduction

A closer look at innovation for and from emerging markets, respectively developing economies (e.g. Frugal Innovation or Reverse Innovation) reveals that a variety of different terms and concepts related to this type of innovation exist. This terminological complexity is difficult to keep track of and blurs the underlying concepts since many terms are used synonymously or the understanding is rather vague. Bhatti and Ventresca (2013) state in regards to Frugal Innovation that, “there is no theoretically embedded definition and there exist few if any conceptual models to base future research on” (p.1). Pansera (2014) concludes regarding Innovation for Development, “it is virtually impossible to classify the literature analysed into a set of clearly defined and fixed categories” (p.55). Regarding to Jugaad, Prabhu and Jain (2015) notice that “the jostling between terminology has contributed to much conceptual confusion that needs to be addressed” (p.856). The goal of our conceptual work is to analyze terms and concepts relating to innovation for and from emerging markets and to suggest theoretical based classification criteria in order to differentiate these terms and concepts. Based on the classification criteria, we propose a classification framework that could be used for further research and teaching in innovation, responsible and sustainable management disciplines. Accordingly, the underlying research questions of our conceptual chapter are:

  • Which terms and concepts are used to describe innovation for and from emerging markets?

  • Which classification criteria can be used to differentiate terms and concepts relating to innovation for and from emerging markets?

In order to resolve these questions, keywords relating to innovation for and from emerging markets are identified and used for searching the database of Google Scholar. Terms and concepts relating to innovation for and from emerging markets as well as classification criteria are analyzed, and a classification framework is presented. Implications for research and practice in innovation, responsible and sustainable management disciplines finalize this chapter.

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Method And Data Base

After a first investigation in regards to innovation for and from emerging markets (EM), respectively developing economies, the following keywords were identified: ‘reverse’, ‘frugal’, ‘jugaad’, and ‘bottom of the pyramid / bottom of pyramid / bop’. These keywords were used for searching the database of Google Scholar. Google Scholar was chosen since it is publicly accessible and one of the most comprehensive databases for research output in the relevant academic fields. The search revealed (on 30.03.2016) the following number of search results (bracketed) relating to various combinations of the keywords (and in combination with the Google search operators ‘allintext:’, ‘OR’, and ‘” “’):

  • (201) allintext: reverse jugaad “bottom of the pyramid” OR “bottom of pyramid” OR bop

  • (263) allintext: reverse frugal jugaad

  • (279) allintext: frugal jugaad “bottom of the pyramid” OR “bottom of pyramid” OR bop

  • (479) allintext: reverse frugal “bottom of the pyramid” OR “bottom of pyramid” OR bop

Thereafter, all texts were manually scanned for terms in relation to innovation for and from emerging markets. Thereby, we primarily focused on reviews, overviews, surveys, and summaries in order to cover the greatest possible term diversity. For further investigation, only texts that used eight different terms to describe innovation for and from emerging markets were considered. However, we did not control for or filter by indicator-based quality of the research material such as rankings or impact factors. In Table 1, shown below, we present the identified texts along with the type and the number of mentions of the various terms.

Key Terms in this Chapter

Bottom of the Pyramid: Approximately four billion people, living on less than US $2 a day, and coming from different cultures, ethnic groups, with diverse needs and abilities.

Classification: A process in which ideas and objects (inter alia terms and theories) are recognized, differentiated, and understood.

Reverse Innovation: The development of new ideas and products in and for emerging markets, which will be introduced equally in developed markets. Focus on the flow of innovations from emerging markets to developed markets as compared to the predominant and historical flow from developed markets to from emerging markets.

Frugal Innovation: A new solution, usually a product, which is generated through a new rethought process (compared to conventional innovation processes). Frugal innovation can be characterized by substantial cost reduction, concentration on core functionalities, and optimized performance level. Initiators can range from big multinational corporations to individuals and grassroots entrepreneurs. The market context is always an emerging one; sometimes the perspective expands to an industrialized market context.

Emerging Markets: Countries that has some characteristics of a developed market and investing in more productive capacity but does not satisfy standards to be termed a developed market.

Innovation: Innovation is an iterative, interactive, context-specific, multi-activity, uncertain, path-dependent process and the result of a new combination of ends and means from a certain perspective. From this perspective, someone must perceive a difference concerning the qualitative newness of an object compared to a prior status in a given context. This new combination must be realized, introduced and diffused into a specific context, which is the point of reference of the prior status.

Jugaad: An improvisational style of innovation with attention to the immediate needs of customers and consisting of overcoming limitations, like scarce resources.

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