Dissertation, Otto-Friedrich-Universität Bamberg, 2015

Innovation is proven to be an absolute requirement for growth in both developed and developing countries, but the type and motivation of innovations differ depending on various surrounding factors like socio-cultural attributes, geography, infrastructure, political environment and income-levels of customers. In developed countries innovations are often technology-driven and associated with delighting the end customers. On the contrary, in the developing or emerging markets due to the unique setting and infrastructural gaps innovations are focused towards meeting customer’s fundamental needs. Innovations in emerging markets are also seen as one of the drivers, utilized to address urgent developmental challenges such as poverty, illiteracy and lack of access to healthcare services. Considering these vast differences in driving factors, this research focuses on the comparison of the ongoing innovation fostering in both developed and developing world individually. This thesis is an attempt to understand the innovation landscape across these two worlds and focus on specific innovation approaches based on their potential and relevance.
In developed world, information technology (IT) is emerging out as the key enabling technology across different innovation approaches. This thesis focuses on one such innovative application of IT called technology convergence, which is an integration of information and operational technologies (Gartner, 2011). Significant financial and productivity benefits are expected from this convergence and therefore many industrial companies are investing heavily into this alignment and undergoing huge business transformations. This study analyses the case of General Electric undergoing such a strategic business transformation. Study conceptualizes a theoretical framework around this new concept by expanding the Venkatraman’s (1994) IT-enablement model and exhibiting evidences of non–linearity and overlap across different transformation stages. Study discloses, IT localized exploitation stage as a default stage for initiating technology convergence and illustrates that each stage of the transformation has an impact on a unique set of organizational dimensions. Business scope redefinition stage influences the dimension of strategy and vision while internal integration stage influences the organization’s structure dimension. The two dimensions that are impacted most during the business process and network redesign stages, are business process and products and markets respectively.
In contrast to the developed world where innovation approaches are focused on IT enabled performance enhancements, emerging markets are observing innovations centred on frugal products that are cost effective and provide value for money. Past two decades have seen a tremendous growth in emerging markets as they are developing their own innovative capabilities (Jiatao and Rajiv, 2009). Country like India, which is also a focus of this thesis, initially playing secondary roles has now become a breeding ground for frugal and social global innovations. This thesis discusses various types of innovation approaches adopted by local firms and multi-national companies in emerging markets such as frugal innovation, jugaad, disruptive innovation, gandhian innovation, catalytic innovation, indigenous innovation, resource-constrained innovation and bottom-up innovation. It identifies the increasing complexity and terminology confusion across these approaches in the growing and fragmented literature revolving around emerging markets. Targeting this shortcoming of the literature, this study attempts to consolidate the research insights into a unified framework defining eight main requirements of emerging markets namely cost-effective, easy-to-use, sustainable, problem-centric, no-frills, fast-to-market, resourceful and breakthrough. Additionally, study also analyses the priorities of these requirements during the buying and designing process from end customers and manufacturers point of view respectively. Research confirms “cost-effective” and “easy to use” as the absolute requirements of bottom-of-pyramid (BOP) customers and reveals the growing awareness towards eco-friendly products. It also introduces two additional important features from customer perspective namely – low/no maintenance or consumables and customized solutions to the framework.
Furthermore, research also touches upon the topic of social enterprises, medium to diffuse social innovations into emerging markets to address social challenges and developmental issues like poverty and access to healthcare services. Study uses event structure analysis and four growth stages identified by Perrini et al. (2010); opportunity identification, opportunity evaluation, opportunity exploitation and opportunity scaling-up to analyze two social healthcare enterprises in India. It proposes an abstract model of a social enterprise with the contributing generalized actions and their causal interactions. Thesis ends with a conclusion giving an overview and a consolidated view of innovation approaches existing in developed world and emerging markets. Additionally it reemphasises some of the limitations experienced during the research work and suggests related future research propositions.