The intuitive assumption that poor countries are trying to play catch up with first-world countries is a strategic blind spot. If necessity is the mother of invention, we should turn our gaze to those in need.

Usually, innovation comes from the top and trickles down to the masses. What happens when innovations start to trickle up? Born out of necessity rather than desire, a reverse innovation is an innovation adopted first by the developing world.  Are third-world countries the pioneers of good ideas, and does urgency make them so?

Creative solutions are the only way to overcome the constraints faced by the developing world, and people are forced to make do with what little resources they have. This often results in some pretty original ideas. In India, Husk Power Systems brings light to rural population (over 50,000) by using locally grown rice husks to produce electricity (a unique and cost-effective biomass gasification technology). The company has also received seed capital from Shell foundation in 2009 to scale up operations.

To avoid the predicament brought on by so-called “first-world mentality”, multinationals must up their game-plan. For decades, they have predominantly followed a simple global strategy: innovate for home markets, then export, with only minor modifications made in attempt to address local market needs.

This strategy worked well enough in the past, when the biggest export markets were other rich countries. It will not work well anymore. Global corporations must recognize that to win in emerging markets, they must innovate, not simply export. And, they must subsequently be prepared to migrate those innovations uphill, from the developing world to the rich world.

Reverse innovation also means that local needs can meet international wants. Products developed out of necessity in third-world countries can be repackaged as low-cost innovative goods for first-world buyers. For example, Nestlé learned that it could sell its low-cost, low-fat dried noodles originally created for rural India and position the same product as a healthy alternative in Australia and New Zealand.

The opportunities are endless, especially where technology is concerned. Microsoft is creating new phone app services for “dumb” phones, which allow users with existing, non-smartphone devices to access Web sites such as Twitter, Facebook. Built for markets in India and South Africa, there is surprising potential for these apps as a low-cost cloud-computing platform.