Innovation plays a pivotal role in shaping the economic fabric of nations. In particular, market-creating innovations - which create new markets by democratizing access to previously-exclusive products - have been a vital force for generating prosperity in wealthy countries, and are integral for building a prosperous future for emerging economies. The authors, from the Clayton Christensen Institute for Disruptive Innovation, argue that in order to create new markets for people who have traditionally been unable to purchase certain products due to barriers such as cost and access, organizations not only need to develop a product that meets these customers' needs, they must also develop a way to get it to them. Having researched 100 companies in 30 countries that created markets between 1706 and 2018, they share six key strategies that enable market creation.

With emerging-market giants such as Brazil, Russia, India, and China experiencing slowdowns, investors, entrepreneurs, and multinationals are looking elsewhere. They've been eyeing frontier economies such as Nigeria and Pakistan with great interest--and enormous trepidation. Can one find serious growth opportunities amid extreme poverty and a lack of infrastructure and institutions? The answer, the authors argue, is yes. The key lies in "market-creating innovations": products and services that speak to unmet local needs, create local jobs, and scale up quickly. Examples range from MicroEnsure, which has made insurance affordable for 56 million people in emerging economies, to Galanz, which has brought microwave ovens to millions of Chinese consumers previously considered too poor to buy such an appliance. What's more, the essentials of development can be "pulled in" by market-creating innovators--and over time, governments and financial institutions tend to offer their support.

With a young, urbanizing population, abundant natural resources, and a growing middle class, Africa seems to have all the ingredients necessary for huge growth. Nevertheless, a number of multinationals have recently left the continent, discouraged by widespread corruption, a lack of infrastructure and ready talent, and an underdeveloped consumer market. Some innovators, however, have succeeded by building franchises to serve poorer consumer segments; tapping the vast opportunity represented by nonconsumption; internalizing risk to build strong, self-sufficient, low-cost enterprises; and integrating operations to avoid corruption. The difference, the authors believe, lies in the choice between "push" and "pull" investment. MNCs seek growth by "pushing" current products onto emerging middle-class consumers. They retain some large portion of their existing cost structure and operating style, and thus set prices that limit market penetration. The winning strategy diverges from this approach in almost every respect. When innovators develop products that people want to "pull" into their lives, they create markets that serve as a foundation for sustainable growth and prosperity.

Tolaram is a Singaporean company that began operations selling textiles in Nigeria in the 1970s. Executives and brothers, Haresh and Sajesh Aswani, however saw an opportunity to create an instant noodle market in the country. In 1988, they began importing Indomie noodles. But in order to truly target the local market, Tolaram decided to build manufacturing and distribution capabilities in Nigeria at time when conventional wisdom advised against it. After a very difficult journey, Tolaram has grown to almost $1 billion in turnover, built and operates 13 manufacturing plants in Nigeria, and runs a 1,000+ plus truck logistics company. This case gives an overview of how Tolaram built Indomie noodles from obscurity to become one of the most recognized brands in Nigeria.

In 2013, a team led by Gopalan Sunderraman, vice president of corporate development at Godrej & Boyce Mfg. Co. Ltd.-one of the companies owned by Godrej Group, a large Indian conglomerate-was preparing to launch an innovative low-cost refrigerator. Developed expressly for the approximately 80% of Indians who lacked access to refrigeration (a market Godrej had never before targeted), the chotuKool represented a technological marvel-a small, inexpensive thermoelectric appliance powered by a rechargeable battery. The case traces chotuKool's development and evolution from an initial product concept inspired by theories of innovation and the strategic vision of Jamshyd Godrej (managing director and chairman at Godrej & Boyce Mfg.) to a promising new line of business that emerged from a process of learning and discovery through market feedback. As the company geared up for the broader rollout of chotuKool, Sunderraman and his team faced some tough questions. What was the proper target and scope for the launch? Which strategy gave them the best chance of success? Could chotuKool really redefine the company and bring refrigeration to hundreds of millions of Indians?