Frugal Innovations and the Way Forward

Since the COVID-19 pandemic, the global economy has come to a standstill. Most countries went into recession and many companies around the world lost their business. Economist Mariana Mazzucato in her recent book, “Mission Economy,” points out that the modern capitalist model of the world was in crisis even before the pandemic. The validation of his opinion is the rise of exponential inequality, ecological imbalance and the unsustainability of socio-political systems. The pandemic has exposed flaws in health systems and bureaucratic inefficiency. Since then, humans have recklessly exploited too many resources and, in conjunction with global warming and biodiversity loss, have resulted in environmental instability. With the scarcity of resources, businesses have no choice but to find a minimalist approach to survival. The whole world is looking for a panacea to overcome this crisis, because this pandemic has provided a window of opportunity to rethink our innovation systems. One such minimalist approach the world needs is “frugal innovation.”

Frugal innovation in the market is defined as new or significantly improved products (goods and services), processes or methods of marketing and organization that seek to minimize the use of material and financial resources in the value chain complete (development, manufacturing, distribution, consumption). , and elimination) with the aim of significantly reducing the total cost of ownership and/or use while meeting or even exceeding certain predefined criteria of acceptable quality standards (proposed by Tiwari and Herstatt (2014: 30)). Frugal innovation is also called “affordable excellence” because of its unique value proposition for diffusion in these economies which are: reduced overall cost, robustness, user-friendliness and economies of scale (Tiwari and Herstatt, 2014 ). The simple necessary condition for an innovation to be frugal is that it must be low-cost and highly functional, reduced in engineering, focused on low-income households, and taking into account the technologies of the fourth industrial revolution. .

The father of economics Adam Smith used the word frugal or frugality thirty-seven times in his book “The Wealth of Nations”. While emphasizing the importance of frugal innovations, Adam Smith asserts that frugality is important in the process of producing economic wealth, to avoid a destructive cycle of commerce, leisure, luxury and corruption. Frugal innovations gained new attention after Navi Rajdou, Jaideep Prabhu and Simone Ahuja published their book ‘Jugaad innovation’ in 2012, which changed the nomenclature of frugal innovations to ‘Jugaad’ across the world then that the book became a worldwide best-seller. They also released “Frugal Innovation” in 2015 successively. According to the authors, Jugaad is an important way out of the current economic crisis in developed countries and also contains important lessons for emerging economies.

The current scenario requires resource usage to be mitigated. However, the demands of modern life collide with it. In order to meet these resource constrained demands, Jugaad could play an important role. The importance and potential of frugal innovations was best illustrated during the COVID-19 pandemic when traditional healthcare proved fragile and led to shortages of basic personal protective equipment (PPE) and no have failed to set up enough testing for their populations. Frugal innovators around the world have developed simple, inexpensive and low-engineered devices such as ventilators, masks, test kits and many other PPEs. In fact, during the pandemic, we have also seen the most visible and widespread low-tech and large-scale frugal innovations on digital platforms. Businesses and individuals have started to think of ways to innovate to respond to any type of emergency in society and the economy, creating frugal innovations as an aspiration for new entrepreneurs. During the pandemic, many large companies have attempted to repurpose existing technologies and business models to innovate within resource constraints while meeting customer demands. Governments have also tried to make maximum use of existing resources.

The pandemic has ignited the spark to rethink our innovation systems and organizations have realized the potential of Jugaad. Frugal innovations will prove more important than ever as the world faces a severe environmental crisis and resource scarcity. In developing countries like India that aim for self-reliant growth (Atma Nirbhar), frugal innovations can play a vital role in rebuilding the economy and society, while, as in developed countries, it can reduce vital expenditure on R&D, which can further be directed to social welfare causes. As every country tries to steer its growth towards more inclusion and sustainability, doing more with less without compromising quality is largely becoming the new normal. This new way of doing things can be implemented in the context of frugal innovations.

In order to foster the culture of frugal innovations, all institutions (actors and sectors) must create collaboration and work together to make organizations increasingly frugal for greater business and environmental sustainability. India can position itself as a breeding ground for frugal innovations in the coming decade, so organizational culture transformation and new strategic initiatives are all it needs to make its businesses frugal.

(The authors are students of M.Sc. Technology, Innovations and Entrepreneurial Dynamics, NIT Srinagar.

E-mail: [email protected] | [email protected])

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