Question

Conventional thinking in product development has been that innovation starts in advanced
developed countries like the United States and Japan. Products marketed in
countries where the average income is much lower often are older models of U.S. products
or used but still serviceable equipment. Several U.S. multinational companies have
established R&D labs in India and China. Originally this was to take advantage of the
large number of well-educated engineers who could be employed at salaries much lower
than the going U.S. rate, but soon it was found that these engineers 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 are useful quality products.
Now these U.S. companies are beginning to market these products in the United States
as a low-cost product line that is attractive to a new low-end market segment.
Search the business literature for examples of this new approach to trickle-up product
innovation. Discuss advantages of this new approach to product development and discuss
possible risks.

Answer 1