Reverse Innovation: Why Emerging markets are the next frontier and how gatorade is an excellent example of reverse innovation

by | May 31, 2012

The story of Gatorade can be traced back to the ‘60s, the University of Florida and its football squad: the Gators. The state’s heat and humidity forced the team’s coach to approach the university’s science department and see if there was something more effective than water to replenish players quickly. The labs whipped up a formula of water, glucose, sodium, potassium, and flavour. In 1967, the university’s team defeated Georgia Tech, which prompted their coach to state, “We didn’t have Gatorade”, when asked about his thoughts on his team losing the match.

This tale is woven into American folklore and makes for a great story, but the origins of Gatorade stretch back even further than this.

Gatorade is a great example of reverse innovation. Photo: benwatts/Flickr.

Gatorade is a great example of reverse innovation. Photo: benwatts/Flickr.

Earlier in the ‘60s, Bangladesh and other countries in the South-East Asia were hit by a widespread cholera epidemic. Part of the treatment was to keep patients hydrated.

Western doctors who were sent to these countries to help with treatment were amazed to discover an old formula for helping to treat the disease. The mixture contained coconut water, carrot juice, rice water, carob flour, and dehydrated bananas. The doctors from the West were of the opinion that carbs in the stomach would cause cholera bacteria to multiply and make the situation much worse for the patient. However, combining carbs and sugar with the salt meant that the body re-hydrated faster. This cholera treatment was published in British medical journal Lancet, with a doctor from the University of Florida reading it and using this knowledge to quickly re-hydrate the players in the college’s football team. The rest, as they say, is history.

Gatorade story is just one fascinating example given in Vijay Govindarajan’s new book, Reverse Innovation: Create Far From Home, Win Everywere. Innosight has featured an excerpt of his book:

The Gatorade story was unusual for its era. It ran counter to the dominant innovation pattern. Innovations typically originated in rich countries and later flowed downhill to the developing world. Gatorade, by contrast, swam against the tide. It was a reverse innovation. Quite simply, a reverse innovation is any innovation that is adopted first in the developing world. Surprisingly often, these innovations defy gravity and flow uphill.  

The except includes two other example of reverse innovation: Walmart entering the South American markets and adopting local practices and a doctor in India who performs successful heart surgery in his homeland at a fraction of the cost that American hospitals do.

Be sure to read the excerpt of the book here.

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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