Leadership

Trickle-Up Innovation

By Michael Fitzgerald

Updated on: February 13, 2009 / 10:05 AM EST / MoneyWatch

One fast-developing feature of the global economy is what you might call trickle-up innovation -- the flow of new ideas, products and processes from the developing world to the developed world. My essay in the new Fast Company, As the World Turns, looks at some of the reasons why this phenomenon is emerging:

Companies in developing markets know how to operate profitably in cash-poor markets with tight credit;
Doing business in emerging markets yields ideas for previously ignored markets in the West;
It's cheaper to fail in emerging markets, and also cheaper to succeed;
Huge markets with limited competition mean successes can scale quickly.

While this article focuses on big companies, there are facets of trickle-up innovation that will matter to small Western firms, too. In particular, the lack of entrenched ways of doing things means the developing world really will beat a path to your door if you build a better mousetrap.

I'll periodically post on other facets of this new phenomenon. Let me know your thoughts -- and where you've seen trickle-up innovation in action.