The emerging innovation hot spots: Developing knowledge in the innovation back loop

Peter Zámborský, Igor Ingršt and Monica Riviere

Business Horizons, 2026, vol. 69, issue 3, 335-351

Abstract: With the rising innovative clout of emerging markets, some multinationals from these countries are redirecting their innovation efforts to other emerging markets instead of seeking knowledge in advanced economies. However, relatively few studies have explored how emerging-market multinationals (EMNEs) build and harness their knowledge-development capabilities when they innovate in other emerging markets, a process we refer to as the innovation back loop. We integrate multiple examples and insights from in-depth interviews with senior managers responsible for innovation and subsidiary management in EMNEs to conceptualize the innovation back loop as a key aspect of the international innovation loops perspective. We highlight three steps of building and harnessing knowledge-development capabilities in innovative emerging-market subsidiaries of EMNEs: (1) knowledge generation, (2) circulation, and (3) exploitation. A prominent feature of the innovation back loop is knowledge development by EMNEs via innovation in other emerging markets, leading to successful outcomes in both emerging and advanced economies. We conclude by emphasizing managerial lessons for each of the three steps of the innovation back loop and identifying the emerging innovation hot spots in the global economy.

Keywords: Emerging markets; Innovation; Knowledge development; Capabilities; Subsidiaries (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bushor:v:69:y:2026:i:3:p:335-351

DOI: 10.1016/j.bushor.2025.04.010

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