How the outlook for low returns and high volatility could change the future of asset allocation.

The Great Rebalancing

Deprecated in policy, abundant in market? The frugal innovation of Chinese low-speed EV industry

Purpose of the paper: This research aims to examine the changing role of service innovation in emerging economies towards the more inclusive concept of service ecosystems. This perspective allows us to frame service innovation in emerging economies as a complex and dynamic system based on the interplay of social, economic and technological issues.
Methodology: We adopt a qualitative in-depth case study to explore in a real life, contemporary bounded system how service innovation occurs in complex service ecosystems, such as the urban contexts in emerging economies. The study was conducted using both documentary and field investigations. It focuses on the analysis of the urban context of Curitiba in southern Brazil, which is well recognised as the world’s leading liveable, green, and inclusive city.
Results: This study provides some evidence of how emerging economies could design and deliver sustainable service solutions to create service ecosystems. The research specifically emphasises the role of social, institutional and technological drivers that traverse all aspects of society and enable social changes and social practices to positively enhance and uplift the life of many people in society. 
Research limitations: The main limitation of the study is the single case study, which does not allow generalisation of the results.
Practical implications: This paper offers new insights for designing and configuring practices for integrating available resources to enact sustainable and inclusive service innovation.
Originality of the paper: This study advances the ongoing conversation on service innovation in emerging economies by combining the service logic framework with an ecosystems perspective. It identifies and operationalises co-responsibility as a scalable and sustainable practice that is rooted in and nurtured by social values (sustainability, solidarity, inclusiveness), specifically with regard to emerging economies.

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Service innovation in emerging economies: an inclusive perspective

Frugal innovation in the context of developed ecomomies has witnessed increasing interest in recent years. For Western multinational companies (MNCs) emerging markets represent promising opportunities for growth as well as the threat of new local competitors. Furthermore, economic developments drive the demand for frugal products within Western countries. Succesfully mastering this challenge means that Western MNCs have to challenge prevailing paradigms within their organizations. Literature suggests that these companies have to develop a frugal mindset to succeed in frugal innovation. However, to the best of our knowledge no publication addresses the phenomenon on an empirical basis or provides enough detail for further empirical investigation. To address this gap, we conducted a systematic literature review of 80 publications in the frugal innovation field. Building on the theroetical background of the global mindset concept, we assume that a mindset is a cognitive orientation that promotes task completion, which in turn improves task performance. Our qualitative analysis suggests that in the context of frugal innovation improved task performance would positively contribute to the following goals: (1) strategic alignment of innovating for cost conscious consumers, especially in emerging markets (2) deepening the understanding of cognitively remote customers' needs and the context in which they live or work and (3) satisfaction of these customers' needs with frugal solutions. Furthermore, we propose that a frugal mindset can be cultivated along the phases of (1) accepting the new realities of changing markets and competition, (2) a willingness to reconsider current approaches and (3) a willingness to take the necessary action and implement new approaches regarding the identified goals. By developing a definition based on this two-dimensional construct, we build on the theoretical foundations of a well-established mindset concept from the field of organizational behavior/strategic management and integrate various descriptions of the frugal mindset. This contribution provides a solid theoretical basis for further research.

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The question of a frugal mindset in western MNCs - exploring an emerging phenomenon with a systematic literature review

This research is an exploratory study, which discusses Inclusive Innovation Mechanisms and the potential adoption of Frugal Innovation projects in a Transition-driven Urban Living Lab. It is believed that by exploring the links between these two concepts an inclusive smart city model can be created as well as increasing equality of BoP in cities like Amsterdam. In this respect, the four inclusive dimensions framework developed by Schillo and Robinson (2017) resulted to be useful to give a shape to these mechanisms. Secondly, the study defined key influencing factors on the potential adoption of FI projects in an Urban Living Lab. In order to reach this goal, the theory of diffusion and the Theory of planned behavior were used to see the level of attractiveness of FI characteristics in a ULL. Finally, there is an attempt to illustrate possible patterns between mechanisms and adoption of FI projects to produce innovation strategies for inclusion. Two research strategies were selected to answer theoretical and empirical research questions. These strategies are desk research of academic literature and Case Study, which are particularly appropriate to study how inclusive innovation mechanisms facilitate the potential adoption of frugal projects in an Urban Living Lab operating under Amsterdam’s smart city program. The analysis uncovers strategies and practices involve in the innovation processes. Resulting in a relevant framework where IIMs stimulate the adoption of FI projects and at the same time FI might strengthen the performance of IIMs in the ULL. In addition, the research complements the four-dimensional framework for inclusive innovation created by Schillo and Robinson (2017) by adding a list of possible mechanisms useful to boost inclusion in an organization. Lastly, policy, theoretical and practical contribution are given. As a result, the study found that by applying inclusion innovation mechanisms and allowing them to work as a mediator’s Smart cities can be frugal. However, future research should be orientated towards the application of these IIMs in other smart initiatives to prove their inclusive nature and their relationship with the potential adoption of FI projects in a western context.

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Can smart cities be frugal? An exploratory study of Inclusive Innovation Mechanisms and influencing factors on the potential adoption of frugal projects in an urban living lab in Amsterdam

Since the outbreak of the Global Financial Crisis (GFC), businesses and governments in developed economies are more focused on a single metric than ever before: sustainable affordability. The survival depends on cutting back on the wasteful ways of the past, and is an opportunity for reinvention through, perhaps, creative destruction (Schumpeter and Backhaus 2003). Consequently, an opportunity to learn and adopt more frugal and sustainable ways in innovating has emerged. In this chapter, we provide a framework based on lessons in frugal innovations derived from emerging market experiences. Frugal innovation results in affordable products and services through minimizing the use of resources or by leveraging them in new ways (Govindarajan and Ramamurti 2011; Bound and Thornton 2012; Radjou et al. 2012). The lessons from successful frugal innovations in emerging countries are important—they provide a continuous and sustainable innovation approach—and help businesses and governments in the developed economies stay relevant to their stakeholders. Besides, more inclusive services innovation—as seen in examples from India, China, Africa, and other emerging countries, may ultimately ensure established businesses have a way of providing “good enough” service experiences, at low cost, and more importantly, in shortest time to benefit.

Ravi Srinivasan

Papers

Frugal Services Innovation—Lessons from the Emerging Markets and an Adoption Framework for First-World Corporations and Governments