According to the International Monetary Fund, the growth engines for the years to come will be China and India (with rates of 7.5% and 9% in 2012). Multinationals, according to an article in the new issue of MIT Sloan Management Review (Spring 2012), are stepping up in 
these economies with more R&D labs and factories that can design and develop locally relevant products and services. In recent years, more than $24 billion has been invested in 1,000 R&D centers in the two nations. The result: more and more goods (like Buick’s LaCrosse in China and J&J’s reusable surgical staples in India) are being designed or built from scratch using local R&D talent.
This means that multinationals now aim to design and deliver goods that are both economical and better suited for the local customer, called “value chain localization.” The profit potential in reaching underserved consumers at the base of this pyramid is so great that the group has been dubbed the “next billion.” This “next billion” may have more disposable income and want more, but it still has limited resources. The designing focus for the group needs to be on affordability: delivering more at less cost.
Creating networks of local and global partners becomes essential for designing products and services for the “next billion.” Local partners help multinationals not only learn about local problems and gain insights into solutions: they also help create affordable access. Nokia, for example, a high-tech multinational pioneer, set up R&D and manufacturing facilities in India more than 15 years ago. Today most of its phones sold in India say: “Made in India” and its tools include a suite of offerings to deliver agricultural information to farmers for $1.20/month. Through its cell phone network, it has also provided mobile banking to 600 million Indian consumers who do not have access to banks. Likewise, GE Healthcare has worked closely with its Indian partners to create products like battery operated ultrasounds, EKG, and ECG machines.