Trickle-Up Innovation

Abstract

The diffusion of innovations in business created to help solve the needs of poor people in developing countries was the subject of the analysis. The phenomenon of Trickle-up innovation was observed, whereby innovations created to serve the needs of poor people at the base of the pyramid (BoP) were subsequently utilized to serve middle or high-income populations within the country. These insights were derived from analysis of the pharmacy-doctor business model, the addition of a low-cost, quick-service medical consultancy next to a low-cost pharmacy, which emerged in Mexico in the late 1990s. Although initially the innovation was created to address the lack of public provision of health services for the BoP population, the innovation diffused and grew despite the subsequent introduction of free universal health insurance. This case demonstrates that country-specific solutions to market failures can be regarded as innovations for the BoP.