Now Driving Innovation in India: the Poor

As developed economies slump, it markets directly to the lower class
By Harry Kimball,  Newser Staff
Posted Oct 20, 2009 1:04 PM CDT
People gather for a closer view of Tata Nano cars.   (AP Photo)
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(Newser) – Indian engineers once did little but cater to Western companies, while consumers at home made do with hand-me-down products from the developed world. That is changing in a big way as foreign economies crater and the 1.1 billion consumers of the subcontinent reveal a taste for, well, consuming. And the combination of cheap, available talent and eager buyers means India is no longer the land of knockoffs, the Wall Street Journal notes.

Innovators in India are crafting purpose-built products for the rural poor at slim profit margins, hoping volume will make the difference. They also hope novel solutions will show up on the world’s radar, in what one Western exec calls “reverse innovation.” Tata Motors’ dirt-cheap Nano is perhaps the vanguard of the trend, but mini fridges without compressors and a rural banking system run from a cell phone are also gaining popularity. “We have the engineers that have the brainpower and the bandwidth to deliver on these types of projects,” an exec says.