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Reverse innovation brings technology from developing nations to Canada

05/11/2015 05:00 EDT | Updated 05/10/2016 05:59 EDT
General Electric made a $500 portable electrocardiogram machine that runs on batteries and only requires a patient to press a green button to check for abnormal heart rhythms.

It was aimed at bringing the vital test to rural Indians who lacked access to hospitals with expensive machinery.

Since the company created the simple device, which can produce 500 scans costing 10 cents each on a single battery charge, it's sold in dozens of nations — including developed ones.

It may seem counterintuitive that a product designed for an impoverished villager in a developing country could find ample use in the First World, but researchers and scientists are noticing this boomerang effect with healthcare innovations.

GE's portable ECG device, for example, is now found in some American ambulances.

"You can't put an appliance-sized, $10,000 ECG machine inside the ambulance," says Vijay Govindarajan, the Coxe distinguished professor at Dartmouth's Tuck school of business.

But he can easily put the $500, pocket-sized device in an ambulance.

He worked as GE's chief innovation consultant during the product's development, and helped coin the term reverse innovation to describe the process.

"That's the power of reverse innovation. If you create a product for the rich man, poor man can't afford it. If you create a product for the poor man, everybody can afford it."

Developing nations require health care products created with easy access, high quality and low cost in mind, he says.

The U.S. spends about $2.9 trillion on health care, according to statistics from the U.S. Centers for Disease Control and Prevention, and they still don't have universal access, Govindarajan says.

So why wouldn't they be interested in cheaper, more accessible medical tools?

Botswana swab used in Canada

Canadian-trained doctor David Goldfarb was teaching at the University of Botswana's school of medicine, when he says he noticed how troublesome diarrhoeal disease is, often caused by intestinal tract infection.

Diarrhea kills about 760,000 kids under five in the developing world annually, according to the World Health Organization.

Normally, when a sick child sees a doctor, they wait to collect a stool sample for testing — a process that can take days.

Goldfarb helped create a new type of swab that lets doctors immediately grab a sample and have it tested sooner. It also can be shipped easily in a dry container.

Now Grand Challenges Canada, a program funded by the government of Canada to support health innovations in the developing world, is funding a study to determine if faster diagnosis thanks to the flocked swab results in fewer deaths.

Meanwhile, Botswana is sponsoring a country-wide study using the swabs to determine the causes of gastroenteritis, an intestinal lining inflammation, and to evaluate the effectiveness of the rotavirus vaccine.

"The things that we're doing in Botswana are very much cutting-edge," says Goldfarb. 

The swab's impressive performance prompted the researchers to team up with the government of Nunavut. They're testing the swabs in five communities to determine which might benefit from the rotavirus vaccine. Some groups in Alberta and Toronto's Hospital for Sick Children are also using the product.

Goldfarb, who now works as a professor at the University of British Columbia, didn't anticipate it would be used so broadly. He says his experience has taught him that innovation in the developing world is not a one-way street.

Branding, incentive create barriers

That's because developing and developed nations' needs overlap, says Peter A. Singer, chief executive of Grand Challenges Canada.

All countries can benefit from affordable, easily accessible, high quality innovations, he says.

Affordability and expanding costs are some of the primary challenges facing Canada's healthcare system, Singer says. Canada spent about $214.9 billion on health care in 2014, according to the Canadian Institute for Health Information.

Access can be problematic in the country's remote regions, he said. More than 6.3 million Canadians lived in rural areas in 2011, according to the most recent data from Statistics Canada. 

"It only stands to logic that some of those affordable innovations will be useful in Canada," he says.

However, few researchers actually implement their useful contraptions here, he says.

A product created for a developing nation may be harder to sell to Canadians, Singer explains, asking if a consumer is more likely to buy a tube of toothpaste branded from an American company or one from an African country.

Incentive can create additional problems, he says. Companies profiting from expensive products may not welcome innovations that offer the same quality for a lower price.

To Singer, these problems aren't insurmountable. The more products like Goldfarb's that are encouraged into the Canadian marketplace, the more likely they'll be accepted into the mainstream market.

Ethical concerns over testing

Stephen Pistorius, a physics and astronomy professor at the University of Manitoba, would one day like to see his creation in Canada. He's working on a cellphone-size contraption that uses microwaves to detect breast cancer.

Pistorius says his primary goal is for Nigerian and South African women in rural communities to be able to use the product to screen themselves for the disease. 

He grew up in South Africa, arriving in Canada in 1992, and wants to give something of value back to the continent where he grew up. He's travelling to Nigeria this week to test a suitcase-sized version of the product.

A secondary goal, if he secures more funding, is to make it available to remote regions in Canada.

But Pistorius is clear he's not using African countries as a testing ground for a First World product. He says he's opposed to using developing countries as "guinea pigs" for experiments.

"It's really not being done in Africa because we can't do it here," Pistorius says. "It's being done in Africa because that's the ultimate … market for this device."

Health care tends to be less regulated in developing nations, says Govindarajan, and companies finding it cumbersome to get approval in the States may find it easier to test their products abroad.

However, reverse innovation creates a product to suit the needs of people in developing nations first.

"[If] you can double your value by building on top of that and also improving the health of Canadians … who would think that was a bad idea?" asks Singer. "Nobody."

"This is a win-win scenario," he says. "It just doesn't get any better than that."

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