Reduction or Revaluing In Cost Constrained Design? Reverse innovation conceptualized

Paper in proceeding, 2017

Where construction research and practice are ripe with examples of cost overrun, it rests predominantly with practical accounts when it comes to systematic reductions in functionality and other aspects of building design to avoid scope and cost creep. Research on such systematic reductions are rare. An emerging research literature on reverse innovation propose ways to understand such efforts. The rise of developing countries as emerging markets triggered a geographically oriented notion of reverse innovation denoting a product or service with limited functionality and a low price developed in a developing country, and later introduced in an advanced country. However, second generation conceptualizations include reverse innovation reducing cost and pricing, but also adding new values of the product or service addressing potential clients in a new way. As most reverse innovation examples communicated are simple consumer products, there is a potential in addressing more complex built products to commence conceptualizing processes and practices of reverse innovation in building, promising access to markets where high end complex build products otherwise cannot enter. The aim is to explore a possible conceptualization of reverse innovation of complex built products and gather insights of reverse innovation processes from praxis cases. The cases of reverse innovation exhibit different features and processes, Where the precedent reverse innovation literature tend to dismiss reduction strategies with departure at a high end product, this practice appear to be recurrent in construction. Once faced with a potential, estimated cost overrun some building designers would follow an ad hoc strategy of reduction in functionality until the cost target is reached. This can lead to a “cut evenly across functional areas – cut one functional area out” dilemma. But also to more proactive strategies, such as offshoring of design work, shift of suppliers, global sourcing, and international expansion. Implications for the building sector are presented.