FRUGAL INNOVATION

Introduction
Science, technology and innovation are key factors in the economic and social change.
Which can play an important role in building a comprehensive community for all. In
addition to its traditional role in improving the productivity and competitiveness of business.
This paper aims to define the frugal innovation and its concepts depending on the review
of some papers that had been written in this field of knowledge. And also put some
examples from different countries.

Frugal Innovation: Definition

The origin word of frugal comes from Latin language, which has word called "frugalis"
means the thrifty in food and money. Oxford Dictionary also has exactly the same
explanation of frugal (Soni and Krishnan, 2013). On the other hand, Innovation is define as
a creating of new idea and translating it into new good or service. So what is the Frugal
Innovation?
The first report about frugal innovation was published by the Economist Journal. The
report said that the frugal innovation aims to redesign product in a new way by eliminating
unimportant activities to reduce the total cost. This innovation not only in production but
also could be in delivery process (Bhatti and Ventresca, 2013)
Researchers and authors use many different terms to express this kind of innovation. The
most common terms are Good enough which used by many authors like Hang, Cheng,
and Subramanian, Cost Innovation which used by Williamson, and Frugal Innovation
which used by Economist Journal (Zeschky;Winterhalter; Gassmann, 2014).
The Frugal Innovation, sometimes called reverse Innovation, refers to the innovation that
aims to create a new product or service in a cheap way without reducing the quality level.
Also Bhatti and Ventresca ( 2013) define Frugal innovation as a novel, effective and
efficient way to produce more with low cost for many people.

Principles of Frugal Innovation

There are 6 principles of frugal innovation (Radjou et al.,2012)
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a.
b.
c.
d.
e.
f.

seek opportunity in adversity;

do more with less;
think and act exibly;
keep it simple;
include the margin; and
follow your heart.

Why we need Frugal innovation?

According to Bhatti and Ventresca ( 2013) both emerging and developed markets need
frugal innovation. Although the emerging markets have the technology today. But there are
many reasons for companies to do their jobs in frugality. One of them that the resources
still in scarcity and the cost of raw materials tend to increase every year. Another reason is
that emerging countries dont have a lot of powerful institutions that help to improve
production. But the most important factor is the huge population in these markets and the
low level of GDP per capita. So, these are the reasons that make frugal innovation
required in emerging countries. But why developed ones need to work in frugality? Not
only in emerging market but also in developed ones The resources scarcity still a problem.
But this isnt the only factor for developed countries to think about frugal way to produce.
Other reasons lead them to do that are poverty in some areas, increasing in public debt,
willing to save more money, and the problem in global liquidity.

Frugal Innovation Concepts

1. Jugaad Innovation
This word comes from India Countryside. The principle of this approach is to find
the problem, imagine the solution and do it in low cost to produce a good thing from
the waste in short time. This kind of innovation is very common in India and became
a part of the Indian daily life (Brem and Wolfram, 2014) . So, it looks like sleeping
activity, you cant sleep if you dont close your eyes. The same thing here you cant
produce the products if you dont think about the problem.
2. Frugal Innovation
An advanced approach of Jugaad. Whereas Jugaad focuses on own needs, Frugal
approach aims to meet poor consumer needs (or Bottom of pyramid like they
called). Frugal innovation aims to solve the problem by increasing value for
consumers and reducing costs for producers(Brem and Wolfram, 2014).
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3. Frugal Engineering
This term used for the first time by Mr. Carlos Ghosn, CEO of Nissan-Renault, in
2006 to express the approach that was used by Tata Motors Company when it
produced its new Car called Nano. This approach aims to develop the product by
focusing on the whole process to maximize value and eliminate unnecessary costs
(Radjou et al.,2012).
4. Gandhian Innovation
There are three kinds of this approach. First, bring the same business models from
developed countries and run it by using a low cost labor. Second, combine the
existing models and adjust capabilities to create a new product with added value.
Finally, try to get new capabilities to solve technical problems (Brem and Wolfram,
2014).
5. Catalytic innovation
There are five qualities for this approach (Brem and Wolfram, 2014).
a. make a social change by increase scale and replication.
b. meet overserved needs or not served ones.
c. offer simple and good enough products and services with low costs.
d. use unique and cheap resources, like volunteers and intellectual capital.
e. ignored by current players
6. Indigenous Innovation
This approach focus is on a national perspective rather than individuals one. It aims
to improve national capabilities for innovation and improve plans for technology and
science (Brem and Wolfram, 2014).
7. Reverse Innovation
Reverse Innovation is the approach to innovate in low- income markets and then
distribute these innovations in developed countries. The difference between frugal
and reverse innovation that frugal innovation aims to meet low- income people in
emerging countries, whereas the start point in reverse innovation is emerging
markets then the products are developed to sell it in the developed markets (Brem
and Wolfram, 2014).

Example from India

The Indian local government currently has an initiative, in share with the Cherie Blair
Foundation and Vodafone, aims to increase women's entrepreneurship. This project
provides an application from the mobile phone applications especially suited the needs of
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women belonging to rural India network. Although women who use this network already
have mobile phones, but the project has created a special mobile phone service that
allows them to contact the network management and ensure supply levels and send short
text messages orders immediately. The application uses mobile phones 'java' interface. By
it, women can receive sales orders and order new stocks by using their cell phones which
has simple features. This information is collected and transported to a central database
Using text messaging style. The final episode of the application stores information in order
to Indian network management and to meet the requirements relating to financial matters
and review Accounts. This application also provides women's mobile phones with reports
to help them to keep the basic information about their businesses and individual activities
and access it easily (Cherie Blair Foundation for Women, 2012). This project can help in
reducing time spent and travel costs, in addition to improve efficiency in processing time.
this will help to increase income and offer more time for women to do other activities like
improve their businesses and take care about their families ( UNCTAD, 2014).

TataNano Car
We learnt that the main goal of frugal innovation is to meet the needs of poor people in
emerging markets. From this idea the Tata company started to build its car Nano after
Tatas CEO noticed the way that Indian families riding their motorcycles in dangerous way.
So, the company now offers Nano car in a low price and follows the safety standards.
Nowadays, Nano car becomes very common in India and Sri Lanka (Brem and Wolfram,
2014). In addition, the company add some features to the car to be suitable for UK narrow
streets. For instance, the car which called Pixel in UK has wheels that can turn in 90
degree for easily Parking(Bhatti and Ventresca, 2013).

The Civilian Clothing - CC41

This example illustrates that the idea of frugal innovation is not new and it was used many
years ago. The idea of this kind of job comes from the austerity policy was taken by the
Britain government during the second world war. In that time, the government ran the
policy to offer success factors for The army to win the war by reduce using the necessary
things and offered it to army like woods and chemicals, etc..
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During 1940s, the prices in UK started to rise. So, the board of trade wanted to stop prices
and offered good clothes in good prices for all people despite the scarcity of resources.
The clothes that sold in that period were fashionable and in good quality, but they had less
buttons, pockets and seams. Also, some clothes were made from used clothes. For
instance, they used adult clothes to make children ones. In addition, Britain women were
encourage to make clothes by themselves (Bhatti and Ventresca, 2013).

Conclusion
In this paper I tried to clarify my understanding about Frugal Innovation. I started with the
definition of the terms and its principles, then I put the reasons that make the idea of frugal
innovation very important and both emerging and developed markets need it. After that,
the different concepts of Frugal innovation were explained like Jugaad and reverse
innovation. Finally, some examples were given to match the idea of Frugal innovation with
real society.

REFRENCES
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Alexander Brem and Pierre Wolfram (2014), Research and development from the
bottom up - introduction of terminologies for new product development in emerging
markets, Journal of Innovation and Entrepreneurship,3:9, http://www.innovationentrepreneurship.com/content/3/1/9
Bhatti, Y. A. and Ventresca, M. (2013), How can frugal innovation be conceptualized?
Said Business School Working Paper Series, Oxford. Available at
http://ssrn.com/abstract=2203552
Cherie Blair Foundation for Women (2012). Supply chain management solutions in
India.
Available at http://www.cherieblairfoundation.org/supply-chain-managementsolutionsin-India/ (accessed 11 September 2013).
Marco B. Zeschky, Stephan Winterhalter, and Oliver Gassmann (2014), From Cost to
Frugal And Reverse Innovation: Mapping the Field and Implications for Global
Competitiveness.
http://www.iriweb.org/imis15_dev/Main/Library/RTM_Journal/Public_Site/Navigation/Publications/Re
search-Technology_Management/index.aspx

Pavan Soni; Rishikesha T. Krishnan , (2014),"Frugal innovation: aligning theory,

practice, and public policy", Journal of Indian Business Research, Vol. 6 Iss 1 pp. 29
47.
Radjou, R., Prachu, J. and Ahuja, S. (2012). Jugaad Innovation -- Think Frugal, Be
Flexible, Generate Breakthrough Growth. Jossey-Bass.
UNCTAD (2014). STI and innovation policies for women in South Asia. Current studies
in science technology and innovation. (Forthcoming.)