Reverse innovation shows leaders and senior manager how to make innovation in emerging markets happen and how such innovation can unlock opportunities throughout the world. the world is now seeking explosive growth in emerging economies. most of the world’s untapped buying power is in the emerging markets of asia, south asia, eastern europe and latin america. multi-national companies now understand that a truly global strategy must include smart pathways along with strong positions in emerging economies. it is a powerful tool to add to the innovation capabilities. reverse innovation – creating new markets multi-national companies have traditionally centered their innovation efforts on the needs of developed markets and then exported modified versions of their products around the world. now, many are reversing the process of innovation in emerging markets and taking them back to developed nations. business leaders from around the world are re-thinking their strategy and company structure to realize the potential of reverse innovation. in the past, western corporations have typically divided the world’s 7 billion population into two: a.two billion people were rich enough to afford their products b.five billion people who were poor and do not have the affordability for products with the slowing of growth in developed countries and accelerating growth in emerging markets, the challenge was to being the five billion poor into the consuming population. that requires innovation because the world’s poor cannot consume the products of business models that are required and designed to meet the needs of two billion rich. but interesting thing about reverse innovation is that it is not just about bringing the poor into the consuming population: but it puts the multi-nationals that adopt it at the forefront of innovation. well run multi-national companies which have been successful in western markets had struggled to sell their products in india. reverse innovation challenge “innovating from emerging markets rather than simply exporting can unlock the world of opportunities for multi-national companies.” developing economies are different. in the rich world, there are a few people who spend a lot; in the developing world, there are a lot of people who spend little. either way, the spending is vast. china and india are mega markets with micro-consumers. doing more business on high growth, hot spots-aka developing nations – requires much more than ramping up sales, distribution and production. it requires reverse innovation.