International Business Globalization and Trade, Multinational Research Paper

International Business Globalization and Trade, Multinational Enterprise - Research Paper Example China and India are becoming economic giants and this evident by the way their products are competing perfectively with goods from developed countries like the U.S, UK, and Germany. The two nations have embraced ‘frugal innovation’ system which advocates for producing more for less. The frugal invention helps in cutting production cost of production and this has been an added advantage to Companies operating in the two upcoming economic superpowers. (Urata and Chia et al., 2006). Factors leading to Economic growth in Asian States Innovation is the application of improved solutions which meet the new requirements, inarticulate needs or the existing market needs. This is achieved through more effective products, processes, services, technologies or ideas which are readily available to markets, governments and society. This is happening in Asia where China and India have decided to end developing country life and join the group of developed countries. Frugal innovation has been highly used in China and India. Frugal innovation is the process of reducing the complexity and cost of production of a product. This kind of innovation helps firms in growing at a faster rate by reducing production cost. Frugal innovation has made many firms in Asia to have a competitive advantage (Mason, 2001). Reverse innovation is the kind of innovation used by most of the developing countries. This is a kind of innovation whereby goods developed as inexpensive models to meet the needs of the developing nations. (Govindarajan and Trimble, 2012). Jugaad invention is in full force in both China and India. This is a process of improvising production materials due to lack of enough resources for production. China and India have been using and producing their products using their local readily available resources. These forms of innovations used by the two Asian nations has played a big role in product development (Radjou and Prabhu et al., 2012). China and India incorporated gl obalization in their system. This process has helped the two nations in borrowing technology from developed countries and use them in the production of high-quality affordable products. Frugal innovation in Asia The origin of Frugal Innovation Using the concept of innovation, frugal innovation develops on the theories of movements and capabilities that have been there before. Frugal innovation can be traced back from the appropriate technology movement. This was as a result of a publication by Schumer in 1975 with the topic, ‘Small is beautiful: Economics as if People Mattered’ this was aimed in campaigning the local development of low technology, labour-intensive, environmentally technologies as the substitute to depending on technology- transfer from developed countries. After growing as a global movement, the attractiveness of the intermediate which later became appropriate technology sends a warning message, for it was increasing the implications of second class qua lity. Due to threats like environmental challenges due to ozone layer depletion, the appropriate technology was overtaken by sustainable development which forced countries like China and India to come up with ways of growing their economy (Bound & Thortin 2012). The evolution of frugal innovation was influenced by several factors. The factors included; social movements which helped in the globalization of science technology and innovation. There was the availability of technology for the two countries had tapped it from some developing countries. The growth of the private sector increased networking of the global innovation system as multinational firms explored new locations for R&D.