Where to Find This Century's Innovations

Where will the world-changing innovations come from in the 21st century?

America undoubtedly led the charge in the previous century. Simply consider the global impact of Microsoft's (Nasdaq: MSFT) Windows operating system, Ford's (NYSE: F) Model T, and McDonald's (NYSE: MCD) popularization of fast food. These names are familiar to billions of people around the world.

This century, however, we may find the majority of world-changing innovation coming from other countries, particularly those in emerging economies.

New factors to consider
For one, the Internet has proven to be a great equalizer, providing Chinese entrepreneurs like Robin Li and Eric Xu at Baidu.com (Nasdaq: BIDU) the same means and opportunity to develop a search engine as American entrepreneurs Larry Page and Sergey Brin at Google (Nasdaq: GOOG).

On a similar note, more firms are targeting their innovations toward the growing middle classes in emerging economies like China, India, and Brazil. In a recent article in The Economist, Harvard professor Clayton M. Christensen, author of The Innovator's Dilemma, noted that upstart companies are moving away from focusing only on satisfying the top economic niche, instead appealing to the masses by producing cheaper, substitutable goods.

A past example of this phenomenon, he says, is the disruptive effect that personal computers had on IBM's (NYSE: IBM) mainframe computer business. A current example may be India's Tata Motors (NYSE: TTM), which is developing a line of cars that cost no more than $2,500, making driving an affordable reality for millions who once thought it to be a pipe dream.

Who's next?
While America continues to be a hub of innovation, in the words of Bob Dylan, "the times, they are a-changing." Other countries are rapidly catching up with the United States in terms of innovation, and as investors and consumers, we should not be surprised if the next world-changing product or idea comes from the other side of the world.

Want an example? Motley Fool co-founder David Gardner and the Motley Fool Rule Breakers team look out for companies armed with the next disruptive technology. Back in June 2006, the team recommended Suntech Power, a Chinese alternative energy company that has been an innovative force in solar power, a source of energy that may end up being a more cost-effective alternative to oil in the long run. In addition, the company has an exclusive contract to supply solar energy at the Beijing Olympic stadium for the 2008 Olympics. Since June 2006, the pick has returned 130% for subscribers.

As Suntech illustrates, it pays to expand your horizons in the search for this century's innovations. If you'd like to learn more about the innovative companies our Rule Breakers team has found and recommended to subscribers, consider a free 30-day trial of the service. To learn more, simply click here.

Fool contributor Todd Wenning does not own shares of any company mentioned. Baidu.com is a Rule Breakers pick. Microsoft is a Motley Fool Inside Value pick. The Fool's disclosure policy changed the world for the better.