Frugal Innovation: How To Do More With Less
The dominance of an innovation discourse laden with cutting edge and expensive technologies, may be preventing us from recognizing alternative and complementary perspectives, which could help cut healthcare costs while improving worldwide access to health services. One such complementary approach is that of frugal innovation. Frugal innovation, as a way to produce efficacious and affordable products using fewer resources to reach the underserved customers, has received increasing attention in the social sciences literature. Although frugal innovation is commonly associated with emerging economies, there is now a rising interest from healthcare providers in developed countries, to find and apply effective, and lower-cost solutions. Nonetheless, knowledge on frugal innovation and its role in healthcare is dispersed across different literatures which hampers researchers and practitioners to access a fuller, and integrated picture of the phenomenon. In this study, by synthesizing extant knowledge, we tackle the fragmentation of the phenomenon. We elucidate on who the actors are, what is being done, how are such innovations being developed, and what the outcomes are, providing a framework that lays out the underlying mechanisms of frugal innovation in healthcare (FIH). The midrange theory that we develop, provides a conceptual framework for researchers to undertake empirical observation and models to guide managerial practices. Furthermore, by providing a more unified perspective of frugal innovation in healthcare, we hope to initiate conversations on the development, adequacy and adoption of these innovations in healthcare services, which could increase affordability and access for the population while maintaining quality.
Frugal Innovation: How to do more with less
Navi Radjou is a free electron in high demand with innovation managers. Between two columns for the Harvard Business Review, this Americano-Franco-Indian engineer from the prestigious French engineering school Ecole Centrale, born in 1970 in Pondichery, moves from one TED conference to the next, writes best-sellers on the circular economy and agile management, campaigns for a fairer society at the World Economic Forum. Wherever he goes, this theorist of frugal innovation defends the inclusive virtues of jugaad, this art of Indian tinkering that allows you to find simple but ingenious solutions to complex problems. Working on his next book, Conscious Society: Reinventing How We Consume, Work, and Live, the release of which is due in April 2019, he reveals his point of view on the innovation ecosystem in India and the reasons that are driving the sub-continent at the forefront of the world maker scene.
I am not convinced with the theory that "Frugal Innovation" is really new. Endless examples of "old frugal innovation": the first Apple computers were assembled in a garage back in 1976, Starbucks started off in 1971 in one shop selling coffee beans (not the hot drink at that stage) etc etc. Surely the majority of companies today [excluding state owned monopolies] started off small?
2. Grow the local business through engagement with local suppliers, this will help foster entrepreneurship and create employment opportunities for people at the local level. The company will have an actual stake in the community. It will be part of that community instead of a faceless mega corp.
Frugal innovation or frugal engineering is the process of reducing the complexity and cost of a good and its production. Usually this refers to removing nonessential features from a durable good, such as a car or telephone, in order to sell it in developing countries. Designing products for such countries may also call for an increase in durability[1] and, when selling the products, reliance on unconventional distribution channels.[2] When trying to sell to so-called "overlooked consumers", firms hope volume will offset razor-thin profit margins.[2] Globalization[3] and rising incomes in developing countries may also drive frugal innovation.[4] Such services and products need not be of inferior quality but must be provided cheaply.[5] While frugal innovation has been associated with good-enough performance, in some sectors such as in healthcare, frugal innovation must offer maximum performance without compromising on quality.[6]
Many terms are used to refer to the concept. "Frugal engineering" was coined by Carlos Ghosn, then joint chief of Renault and Nissan, who stated, "frugal engineering is achieving more with fewer resources."[9]
In India, the words "Gandhian"[10] or "jugaad", Hindi for a stop-gap solution,[11] are sometimes used instead of "frugal". Other terms with allied meanings include "inclusive innovation", "catalytic innovation", "reverse innovation", and "bottom of the pyramid (BOP) innovation", etc.[12]
In the process of the COVID-19 crisis, frugal strategies have been adopted by Western companies for the handling of increased uncertainty. Specific customer needs can be met with frugal solutions that perfectly fit an exceptional (temporal) situation.[19]
It is true that founding a startup in times of crisis may look more challenging. Investors can also be skittish, and winning new customers is not easy. However, a crisis can also be a golden opportunity to launch a new product or service, as long as the startup at the origin applies specific methods. One of them is called frugal innovation.
Nowadays, frugal innovation is increasingly being embraced by businesses as a way to drive growth with limited resources. Indeed, startups often have to be scrappy and resourceful to get off the ground, and frugal innovation can help them do more with less.
However, the impact of this frugal technology has been immense. Google Street View allows individuals and businesses to explore destinations, plan trips, and navigate unfamiliar areas without leaving their homes. It also serves as a valuable resource for those in the real estate and construction industries. Finally, it provides essential visual information at a low cost. In short, Google Street View exemplifies how a small investment can yield significant returns.
The Renault Logan, released in 2004, is a prime example of frugal innovation. Developed for emerging markets by the Renault-Nissan alliance, the car was designed with simplicity and cost-effectiveness in mind without sacrificing fundamental functionality and quality.
In Kenya, half of the population uses M-PESA, a branchless banking service that uses basic mobile phones to enable people without access to traditional banks to deposit, withdraw, transfer money and pay for goods and services. This is greatly needed in Africa because 80 per cent of people do not have a bank account but 82 per cent have a mobile phone
On 18th February 2016 I attended the Global Health Forum session at Imperial College, London on Frugal Innovation. Here are my notes on a fascinating afternoon.Dr Yasser BhattiWhat are Frugal Innovations?Reverse and frugal innovation is primarily concerned with the BRIC (Brasil, Russia, India, China) countries but also the next 11 and then the next 25. These emerging markets are transitioning toward becoming developed countries and are have markets that will grow very quickly. These countries commonly face three challenges:Resource constraintsMarket affordabilityInstitutional voids or complexitiesThese countries often lack hard and soft institutions. Hard institutions mean things like roads, ports, sanitation. Soft institutions means things like effective governments, the rule of law. With all of this opportunity a lot of businesses are looking to sell into emerging markets. An example of a newly minted entrepreneur is shown who buys a Mercedes but then has to drive it on a dirt road. This is seen as an example of how institutions are often not in place for products from the west to function.These constraints often fuel innovation. Ratan Tata is an entrepreneur who noticed that most people ride around on mopeds or rickshaws and that often includes 5 people. He set the goal of an affordable car and invented the Tato Nano Car. This is seen as an example of frugal innovation and is documented in the book Nanovation - How A Little Car Can Teach The World To Think Big. Another example is Muhammad Yunus and his approach to Microfinance for groups of women.The challenge and academic interest is how can you do more with less for many more people. A exemplar project is shown in Remotion, a high performance knee joint for developing world amputees. They looked at high performance US knee joints or the Jaipur Knee and wanted to produce high quality but at low cost. They came up with $80 high quality knee joint. This is seen as an example of reverse innovation where potentially an innovation driven by constraints can be sold into developed markets.The next example is Peek Vision who took the Aravind Eye Care System and used it to innovate. The video give a good flavour for the product.
A "gutsy" Indian approach to innovation is being echoed worldwide by multinational companies adopting "frugal" approaches that help them do business faster, better and cheaper. googletag.cmd.push(function() googletag.display('div-gpt-ad-1449240174198-2'); ); Indian languages have no word for innovation. But India has jugaad. It means finding practical solutions, being enterprising with resources, and learning from the principles of flexibility and frugality. Jugaad is bigger than a word. It's a mind-set.
"Emerging markets like India, China, Brazil and Kenya are a breeding ground for ideas like the MittiCool that transform scarcity into opportunity and do more with less," explains Prabhu, the Jawaharlal Nehru Professor of Indian Business at Cambridge Judge Business School.
Prabhu explains that it is a need-based, bottom-up approach to innovation that has largely not been seen in Western economies since the early days of the Industrial Revolution. "The more usual pathway today is to channel innovation through large-scale R&D efforts, often with crippling levels of costs, control and time. Take the pharma industry for example: R&D spending rose from $15 billion in 1995 to $45 billion in 2009, yet the number of new drugs launched annually dropped 44%." 041b061a72