Conventional thinking in product development has been thatinnovation starts in advanced
developed countries like the United States and Japan. Productsmarketed in
countries where the average income is much lower often are oldermodels of U.S. products
or used but still serviceable equipment. Several U.S. multinationalcompanies have
established R&D labs in India and China. Originally this was totake advantage of the
large number of well-educated engineers who could be employed atsalaries much lower
than the going U.S. rate, but soon it was found that theseengineers were adept at developing
products for sale to the mass markets in these local countries.Typically these are
products with somewhat reduced functionality, but they still areuseful quality products.
Now these U.S. companies are beginning to market these products inthe United States
as a low-cost product line that is attractive to a new low-endmarket segment.
Search the business literature for examples of this new approach totrickle-up product
innovation. Discuss advantages of this new approach to productdevelopment and discuss
possible risks.
