Showing papers on "Frugal innovation published in 2012"

Innovation for Inclusive Growth: Towards a Theoretical Framework and a Research Agenda

Abstract: Inclusive innovation, which we define as innovation that benefits the disenfranchised, is a process as well as a performance outcome. Consideration of inclusive innovation points to inequalities that may arise in the development and commercialization of innovations, and also acknowledges the inequalities that may occur as a result of value creation and capture. We outline opportunities for the development of theory and empirical research around this construct in the fields of entrepreneurship, strategy, and marketing. We aim for a synthesis in views of inclusive innovation and call for future research that deals directly with value creation and the distributional consequences of innovation.

What is Frugal, What is Innovation? Towards a Theory of Frugal Innovation

Abstract: Innovation in emerging markets offers fertile ground for theory development. In recognition of the growing trend in “frugal innovation” discourse among practitioners particularly in emerging economies, we parse “frugal innovation” into "frugal" and "innovation" separately and present the underlying meanings towards understanding "frugal innovation" in historical and contemporary contexts. We further develop a theoretical model of frugal innovation by applying existing theories to emerging market contexts. We do so by merging technology innovation, institutional innovation, and social innovation literatures to argue that frugal innovation lies at the intersections of these streams. We show how using the model to understand what the space currently looks like may help to offer a consolidated and encompassing theory of frugal innovation and aid in opening a research agenda.

Assessing India's lead market potential for cost‐effective innovations

Abstract: Purpose – The purpose of the present study is to assess India's potential as a lead market for cost‐effective frugal innovations. This is of special interest since lead markets have traditionally existed in economically highly developed countries, whereas developing countries have faced negative country‐of‐origin effects. In the case of India a reversal of this trend may be observed, for some time. The paper aims to identify factors which are impacting India's emerging role as a fountainhead of frugal innovations. The research will have implications for locational decisions in setting up global innovation/ research and development (R&D) activities.Design/methodology/approach – The study crystallizes the inherent characteristics of frugal innovations, their development process and market success in the domestic and overseas markets by undertaking in‐depth analysis of four successful product innovations from India from multiple industries. The obtained results can be treated as critical success factors for ...

Frugal and reverse innovation - Literature overview and case study insights from a German MNC in India and China

Abstract: As the world is shifting its attention towards emerging giants like India and China, the big Western multinational companies [MNCs] are trying to get their foothold in this market. Instead of customizing the western world products to local markets, these companies are increasingly developing products from scratch for the local consumers. They are engaging in frugal & reverse innovations, by developing affordable products and solutions with “good enough” functionalities and minimum frills, and later on, introducing them to the developed countries. This paper focuses on how multinational corporations [MNCs] are establishing themselves in the emerging markets and their innovation strategies. The paper initially differentiates between frugal & reverse innovation and goes on to analyze the practices of a German MNC. The paper concludes that end to end localization, core value identification & a healthy portfolio mix of both kinds of innovations is necessary for success in emerging markets.

Frugal Innovation: A Global Networks' Perspective

Abstract: Recent years have seen the emergence of a paradigm of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare. In many instances, results on the ground have been, however, rather sobering as firms have generally worried that “good quality, low price” may cannibalize into their regular business. At the same time those very customers that were intended to benefit from the new approach have tended to shy away from them fearing low quality and social stigma of using cheap products. Using multiple case studies of successful affordability-driven innovations (“frugal innovations”) from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers. The key criteria to success seem to lie in reducing the overall cost of ownership and enhancing customer perception of quality and image. The case studies reveal that affordability-driven innovations are especially successful when firms turn to open global innovation networks for collaborative development in all phases of the innovation value chain.

The Emerging Market for Frugal Innovation: Fad, Fashion, or Fit?

Abstract: There is growing interest among both private and public sectors to serve the underserved in emerging or developing countries leading to, what we call the market for frugal innovation. This paper is divided into two parts. First, we discuss the rhetoric surrounding frugal innovation and attempt to understand the discourse surrounding it as fad, fashion, or fit. Second, we seek to map the emergence of this market by suggesting drivers and the making of a social movement involving different actors pursuing both contentious and complementary approaches to achieve the same outcome, i.e. one of creating value for underserved populations. An understanding of how the rhetoric and market for frugal innovation has emerged will be useful in opening a research agenda. Consequently we cover opportunities and challenges to growth of the market as well as draw implications to academic theory and practice.

Frugal Innovation: A Global Networks’ Perspective

Abstract: Recent years have seen the emergence of a paradigm of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare. In many instances, results on the ground have been, however, rather sobering as firms have generally worried that “good quality, low price” may cannibalize into their regular business. At the same time those very customers that were intended to benefit from the new approach have tended to shy away from them fearing low quality and social stigma of using cheap products. Using multiple case studies of successful affordability-driven innovations (“frugal innovations”) from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers. The key criteria to success seem to lie in reducing the overall cost of ownership and enhancing customer perception of quality and image. The case studies reveal that affordability-driven innovations are especially successful when firms turn to open global innovation networks for collaborative development in all phases of the innovation value chain.

Jugaad—From ‘Making Do’ and ‘Quick Fix’ to an Innovative, Sustainable and Low-Cost Survival Strategy at the Bottom of the Pyramid

Abstract: Until recent times, Indian jugaad was commonly constructed to be a frugal form of innovation engendered from the lack of resources and unhealthy financial conditions, and has been recently imported...

Open global innovation networks as enablers of frugal innovation: propositions based on evidence from India

Abstract: Recent years have seen the emergence of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare In many instances, results on the ground have been, however, rather sobering as firms have generally (probably justifiably) worried that “good quality, low price” products may cannibalize into their regular business At the same time those very customers that were intended to benefit from the new approach have tended to shy away fearing low quality and social stigma of using cheap products Using multiple case studies of successful affordability-driven innovations (“frugal innovations”) from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers The key criteria to success seem to lie in reducing the overall cost of ownership and enhancing customer perception of quality and image The case studies reveal that affordability-driven innovations are especially successful when firms seek recourse to “open global innovation networks” (OGINs) for collaborative development in all phases of the innovation value chain

Can We Progress from Solipsistic Science to Frugal Innovation

Abstract: Energy demand in the twenty-first century will be driven by the needs of three billion people in the emerging world and three billion new inhabitants to our planet. To provide them with a renewable and sustainable energy supply is perhaps the greatest challenge for science in the twenty-first century. The science practiced to meet the energy needs of the twentieth century responded to a society of wealth, and energy systems were designed to be large and centralized. However, the inability of the emerging world to incur large capital costs suggests that a new science must be undertaken, one that does not rely on economy of scale but rather sets as its target highly manufacturable and distributed energy systems that are affordable to the poor. Only in this way can science provide global society with its most direct solution for a sustainable and carbon-neutral energy future.

Frugal Innovation: Learning from Social Entrepreneurs in India

Abstract: Over the last 60 years, innovation and improvements in India's public services have frequently emerged in the absence of state intervention or involvement. Social enterprises have stepped in to address the challenges where the government has failed. As a consequence, radical new perspectives have developed that might not have emerged if governments had imposed top-down initiatives adopted from the West. "Frugal Innovation" is the idiom applied to this sweeping revolution in public service design and delivery. The term is used in India and other developing economies to describe innovation that minimises costs by creating frugal solutions to deliver improved or previously non-existent public services. Frugal innovation has given more people access to a wider range of services. This paper provides insights into how solutions developed from the bottom-up in some of the most challenging public service environments can better meet the needs of citizens. It investigates a range of new perspectives applied to services by over 40 social enterprises in India. It challenges the notion that uniformity in delivering public services driven by a top-down centralist ideology translates into good value for money.

4 Frugal innovation in Africa: Tracking Unilever’s washing-powder sachets

Abstract: Western-based multinational enterprises (MNEs) have played a major role in the introduction and marketing of new products and services in Africa?s consumer markets. Frugal innovations are the result of the recent ambitions of mostly MNEs to design and sell products for and to consumers at the Bottom of the Pyramid (BoP). This chapter presents a case study which suggests that better collaboration with African partners in order to supply goods to the BoP in a profitable way is of great importance. The OMO sachets were a success from a sales perspective and turnover increased greatly over figures from the early 1990s due to the introduction of the more affordable economy-sized sachets. Finally, the chapter considers whether, by addressing frugal innovation for Africa, product innovations brought into Africa by foreign parties can increasingly become influenced and transformed a priori by Africans, before the products have entered the African market. Keywords: Africa; Bottom of the Pyramid (BoP); frugal innovation; OMO sachets; Western-based multinational enterprises (MNEs)

Learning from Failure: Case Insights into a UK-India Technology Transfer Project

Abstract: The success of firms in emerging economies like India and China can be generally attributed to their low-cost R&D and manufacturing capabilities, scalable resource pool, and rapidly growing domestic demand. However, in recent times, emerging economy firms have been employing new innovation strategies to morph into higher orbits and drive profitable business growth. Increasingly, many emerging economy firms are deploying their earnings to invest in R&D and to acquire advanced technologies from developed country firms to boost their innovative capability and to drive their global business competitiveness. Drawing on recent literature on international technology transfer, this paper presents a case study of an Indian MNC to provide theoretical and practical insights into the dynamics and process of technology transfer. Lacking strategic orientation is identified as a main missing factor in recent literature.

Innovation from Emerging Markets: The Case of Latin America

Abstract: Today, ‘innovation’ is a priority all over the world, particularly in emerging markets. The President of India declared this decade the ‘Innovation Decade’. In emerging markets the word means much more than catching up by imitating innovative policies and firms from more developed economies. Some called it Reverse Innovation, meaning that it originates in places other than the ones traditionally linked to research and technology. Others use the word ‘frugal innovation’ with the idea that you need to innovate in a context of scarcity of resources and has to have an impact in the society. The goal is to reduce price and functionality and increase quality for a large audience. If we look at Latin America, the region is well known for its music, Nobel laureate writers, excellent TV soapoperas (‘telenovelas’). In several revealing cases, Latin American businesses are redefining global business by developing new business models. There are many examples of promising policy reforms, such as Vive Digital in Colombia among governments in the region. Latin America can offer lessons about innovating with scarce resources in volatile and unpredictable environments — indeed, innovators in countries leading in research and development (R&D) increasingly face similarly challenging conditions.

Towards a Theory of Frugal Innovation: What is frugal, what is innovation?

Abstract: Innovation in emerging markets offers fertile ground for theory development. In recognition of the growing trend in “frugal innovation” discourse among practitioners, we parse “frugal innovation” i...

Reverse Innovation: inversing the international product life cycle model and lead market theory

Abstract: The interest of firms in emerging economies has until date been largely an issue of exploiting low production cost possibilities and growing sales potentials. More and more, however, their interest can also be explained from an innovation and product development perspective. I.e., from a reverse innovation point-of-view where new products from emerging economies can be trickled up to satisfy the needs of more demanding customers, be they from emerging countries as well or from developed companies. Whereas reverse innovation has largely been identified with frugal innovation, in this paper it is argued that emerging markets will increasingly bring about more advanced and high end products. Both due to the R&D and innovation assets and resources put in place in situ and a growing sophistication and purchasing power of the (middle class) consumer groups in these markets.

Open global innovation networks as enablers of frugal innovation: propositions based on evidence from India

Abstract: Recent years have seen the emergence of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare. In many instances, results on the ground have been, however, rather sobering as firms have generally (probably justifiably) worried that 'good quality, low price' products may cannibalize into their regular business. At the same time those very customers that were intended to benefit from the new approach have tended to shy away fearing low quality and social stigma of using cheap products. Using multiple case studies of successful affordability-driven innovations ('frugal innovations') from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers. The key criteria to success seem to lie in reducing the overall cost of ownership and enhancing customer perception of quality and image. The case studies reveal that affordability-driven innovations are especially successful when firms seek recourse to open global innovation networks (OGINs) for collaborative development in all phases of the innovation value chain.

L’innovazione nei Paesi Emergenti: Resource Constrained Innovation

Abstract: Il rapido sviluppo economico e imprenditoriale dei paesi emergenti e l’affacciarsi sulla scena economica mondiale di nuovi attori multinazionali (Ramamurti, Singh, 2009) da essi provenienti hanno portato alla luce processi di innovazione diversi rispetto a quelli tipici dei paesi sviluppati e potenzialmente forieri di significativi mutamenti nelle dinamiche competitive internazionali (Khanna, 2008). I nuovi attori emergenti sono degni di nota anche in ragione del fatto che hanno saputo crescere ed innovare in presenza di carenze infrastrutturali molto gravi (trasporti, telecomunicazioni, energia, ecc.) e di “institutional voids” (Khanna, Palepu, Sinha, 2005), in assenza di intermediari specializzati, di sistemi regolamentari e di strumenti per dare esecuzione ai contratti. Tutti aspetti che hanno ostacolato la competitività e la penetrazione commerciale delle imprese occidentali nei paesi emergenti ma che hanno sviluppato specifiche competenze innovative negli attori locali. Si parla a questo proposito di resource constrained innovation, ovvero innovazione sotto il vincolo di risorse scarse, ricomprendendo in questo concetto diverse forme di innovazione: frugal innovation, defi-