"Resource-constrained innovation" : Classification and implications for multinational firms

Recent developments show that it is no longer enough to serve high-margin markets with high-tech products but that firms must also be able to serve resource-constrained markets with products that deliver high value at ultra-low costs. Resource-constrained consumers are often found in the lower part of the economic pyramid and do not only exist in emerging but also in developed markets. This article discusses the different types of resource-constrained innovations-cost, good-enough, frugal, and reverse innovation-pinpoints the differences between them and discusses the implications for global innovators. It thus offers strategies for firms how to develop innovation capabilities for resource-constrained markets and provides the conceptual grounds for further systematic research in the area of resource-constrained innovation.