1. Frugal Innovation: A Literature Review CFIA / EADI Workshop
Centre for Frugal Innovation in Africa
CFIA / EADI Workshop
‘How can frugal innovation become
inclusive innovation?’
26 and 27 November 2015, ISS, The Hague
Frugal Innovation:
A Literature Review
Iva Peša (CFIA) & André Leliveld (ASC/CFIA)
Contact: ;

2. Literature review The ‘emergence’ of frugal innovation
The definition of frugal innovation
The cycle of frugal innovation
Frugal innovation as inclusive innovation?
Conclusion: towards a research agenda
Centre for Frugal Innovation in Africa

3. The ‘emergence’ of frugal innovation
The Economist, business guru talk and academic debate
Historical precedents: WW II, East Africa, India
Dominant innovation trajectory:
capital intensive, high-tech, exogenous to the low-income context
1970s: Appropriate Technology Movement
1980s – now: Internationalisation of innovation
Global Value Chains
Global diffusion of capabilities
Rise of low income (BoP) and middle class consumers in Asia, Africa and Latin America
Economic crisis and trade collapse in North America and Europe (2008)
Polycentric innovation
Changing policy context: more focus on the role of private sector and business in development (PSD)
Jugaad is a Hindi word, referring to ingenuity in fixing, in making something you do not have. Making use in an inventive way of what you have to solve a problem.
Centre for Frugal Innovation in Africa

4. The definition of frugal innovation
Aspects highlighted in literature
(Re)design / technology:
Value sensitive design
Basic functionalities
Good enough quality / durability
Cost and affordability
User value
BoP / middle class consumers / preferences
Innovation environment
Resource constraints
Informal sector
Polycentrism
Working definition
The (re)design of products, services and systems to make them affordable for low-income customers without sacrificing user value.
Centre for Frugal Innovation in Africa

5. The cycle of frugal innovation
Leading idea in literature: frugal innovation > product development
Focus on:
Contextual challenges (low income / resource constrained)
Organisational collaboration that fosters frugal innovation:
Role MNCs and MNC subsidiaries
Polycentric networks (e.g., MNCs – local entrepreneurs, MNCs-NGOs, etc.)
Bottom up (communities, informal sector, ‘prosumption’, ‘popular economies’)
Role knowledge centres
Business model: production, distribution, consumption, marketing
Institutions:
Governance and policy, including legal aspects
Motivations / interests
History / path dependency / institutional change
Centre for Frugal Innovation in Africa

6. Towards an integrative approach?
Centre for Frugal Innovation in Africa

7. Frugal innovation and inclusive innovation
Definition inclusive innovation:
“the development and implementation of new ideas which aspire to create opportunities that enhance social and economic wellbeing for disenfranchised members of society” (George, MacGahan & Prabhu, 2012, 663).
Frugal innovation as inclusive innovation? Two assessments:
Celebratory discourse on ability of international business to serve the needs of the BoP: ‘inclusive business for the poor’, ‘social business’, ‘pro-poor business’, ‘inclusive capitalism’
Role of corporate business might have adverse effects, redefining ‘the poor’ into consumers, delivering products poor people do not need, etc. Plea for more focus on locality, role of informal sector (not as part of GVCs)
The role of standards: a balancing act
Centre for Frugal Innovation in Africa

8. Towards a research agenda
More empirical macro / meso / micro studies needed on:
roles and interests of actors (entrepreneurs, types, consumers, knowledge) involved
technological conditions for frugal innovation
social, cultural and instutional contexts of frugal innovation
business models
transformative dimensions of frugal innovation: innovation systems, technology, economy, communities, society, capabilities, consumer behaviour, etc.
Theoretical contributions to:
- ethical literature focusing on early engagements in new technologies
- the socio-technical systems literature
- the innovation and entrepreneurship literature
- the literature on inclusive business models and development
- literature on economic transformation and local economic development
- the emerging literature on patterns of consumption at the BoP
Centre for Frugal Innovation in Africa