Building Innovation Subsidiaries in Emerging Markets: The Experience of Novo Nordisk

OVERVIEW:

Innovation subsidiaries increasingly follow manufacturing subsidiaries into emerging markets. Compared to well-established Western economies, emerging markets present unique challenges for the development of innovation management capabilities at subsidiaries. This paper distinguishes between implementer and innovator subsidiaries and provides suggestions on how to transform an implementer subsidiary to an innovator. This transformation may start as a strategic priority within the company and then be translated into specific actions. Suggestions for actions are based on the experience of a large multinational pharmaceutical company, Novo Nordisk. Lessons learned include assigning the subsidiary responsibility for a self-contained piece of work while maintaining a central R&D function, balancing local and in-company management, using local innovation talent, and educating new hires into the company culture.

KEY CONCEPTS::

• Subsidiaries
• Emerging markets
• Dynamic capabilities