Inovasi Indonesia di BIC - Business Innovation Center Indonesia

A personal resume from Harvard Business Review with Title ‘How GE Is Disrupting Itself’ by Jeffrey R. Immelt, Vijay Govindarajan, and Chris Trimble.

Harvard Business Review has been the most read Review and the ideas behind the reviews have always been intriguing, fresh and mind openers. When my boss told me to review the HBR and to write a resume, I gladly took it.

This review is about how GE and large multinationals companies disrupting themselves for better good. They develop and apply a new model, ‘global reverse innovation’ to develop new innovative products in clash with the ongoing ‘glocalization’ model. When you read the resume below, I hope you will understand why I believe that new emerging countries like China, India and Indonesia will play significant role in world-class innovations development process.

The review explains about glocalizationapproach (not globalization), an approach that many industrial-goods manufacturers based in rich countries have employed for decades. With glocalization, companies develop great products at home and then distribute them worldwide, and with some adaptations to local conditions. This approach worked fine for rich countries when other countries did not offer much opportunity. But those days are over – thanks to the rapid development of countries like China and India, and the slowing growth of wealthy nations.

The review stated the fact that In May 2009, General Electric announced that it would spend $3 billion to create at least 100 health-care innovations that substantially lower costs, increase access and improve quality. It highlighted two products, a $1,000 handheld electrocardiogram device and a portable, PC-based ultrasound machine that sells for as little as $15,000. What extraordinary about the devices are not only that they are small in size and low in price, they were developed for markets in emerging economies (ECG for rural India and USG for rural China) now being sold in the US, where they’re pioneering new uses for such machines. This is the opposite of glocalization and called ‘global reverse innovation’.

GE has to do this innovative strategy if to survive and prosper in the next decade by preempting local companies in those countries – the emerging giants – from creating similar products and disrupt GE in rich countries.

The paper reviews further on challenges when GE try to combine the two models, glocalization and global reverse innovation, for there are deep conflicts between them. GE cannot simply replace glocalization, because it will continue to dominate strategy for the foreseeable future. The two models need to do more than coexist; they need to cooperate.