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By | April 2011
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A special report on innovation in emerging markets l April 17th 2010

The world turned upside down

The Economist April 17th 2010

A special report on innovation in emerging markets 1

The world turned upside down
Also in this section First break all the rules
The charms of frugal innovation. Page 3

Easier said than done
Emerging-market consumers are hard to reach. Page 5

Grow, grow, grow
What makes emerging-market companies run. Page 7

Here be dragons
The emerging world is teeming with new business models. Page 9

New masters of management
Pervasive innovation adds up to a new management paradigm. Page 11

The power to disrupt
Business innovations from emerging markets will change the rich world too. Page 12

The emerging world, long a source of cheap labour, now rivals the rich countries for business innovation, says Adrian Wooldridge

I

Acknowledgments As well as the people mentioned in the text, the author would like to thank the following for sharing their insights and expertise: Ge Dingkun, Wim Elfrink, Juan Antonio Fernandez, Bill Fischer, Vinod Kumar, A.S. Lakshminarayanan, Sandeep Maini, Arnoud De Meyer, George McKinnon, Charles Ormiston, Jaideep Prabhu, Navi Radjou, Sumanth Raman, V Raja, A.R. Srinath, Jianmao Wang and Dongsheng Zhou A list of sources is at

Economist.com/specialreports
An audio interview with the author is at

Economist.com/audiovideo

N 1980 American car executives were so shaken to nd that Japan had replaced the United States as the world’s leading carmaker that they began to visit Japan to nd out what was going on. How could the Japanese beat the Americans on both price and reliability? And how did they manage to produce new models so quickly? The visitors discovered that the answer was not industrial policy or state subsidies, as they had expected, but business innovation. The Japanese had invented a new system of making things that was quickly dubbed lean manufacturing . This special...