Developing new products in emerging markets

Abstract

For more than a decade, multinational enterprises from developed countries have been moving a substantial part of their research and development (R&D) activity to emerging markets such as India and China. While the location of R&D centers in other developed countries has been driven by lucrative markets or specific expertise available in the local ecosystems of those countries, the location of R&D in developing countries has been driven largely by the availability of skilled manpower at low cost. R&D subsidiaries in emerging markets are uniquely positioned to play an important role in multinational companies innovation strategies. The research method employed for this study was a combination of quasi-participatory action research and the case study method. A large market opportunity combined with unique customer requirements is a key enabler of innovation for emerging markets. While most emerging markets do present a sizable market opportunity, it is the uniqueness of customer requirements that creates a compelling need to innovate. Cisco India's R&D had all three enablers of innovation in place: a critical mass of end-to-end product development capability, a growing market with unique needs, and executive champions.