Innovation has always been about people in rich nations getting the latest stuff and the rest of the world getting the castoffs as markets scale and prices come down. So why is Nokia looking to use Kenya to debut a free classifieds service, complete with a first-ever feature that allows people to shop using voice commands to browse for goods? And why are Western banks seeking ideas from India’s ICICI when its average deposits are one-tenth of those in the West?

The answer is that the traditional model of developing new products is quietly reversing course. This phenomenon is called “trickle-up innovation,” where ideas take shape in developing markets first, then work their way back to the West. If it’s radically innovative and reduces costs, it’s going to get looked at and will accelerate. As the credit crunch forces frugality on companies everywhere, it should turbo charge the shift toward developing markets.

The need to innovate in global markets is already changing the strategy at firms such as Infosys. Ten years ago, most of its technology was meant for the developed world. Last July, when the company unveiled cutting-edge data tracking for retailers called ShoppingTrip360, it first tested the technology in India.

Innovation won’t always trickle up, of course. A lot of what works overseas is unlikely to break through the West’s cluttered retail market. But there’s also trickling sideways – if it works in Kenya, it should work in other developing markets. Some successful examples of this include Brazil’s Natura, a cosmetics firm that bested Western companies on its home turf and has expanded throughout Latin America and now Europe, and China’s Goodbaby, which has 28% of the U.S. stroller market.

The emerging world, then, is no longer a dumping ground for trailing-edge technology. Brace yourself for the next wave of immigrants – ideas.

View a previously written post by Mouli Cohen about innovation