4. Frugal Innovations as Responsible Innovations – Readings
The readings for this lecture set are listed below, with a small explanation accompanying each title:
Readings for the Case Study on TAHMO weather stations
During the past 2 years, the TAHMO community has grown rapidly. The enthusiasm and energy that the TAHMO initiative generates is truly amazing and very encouraging. You can read all about this in the article by N. van de Giesen, R. Hut and J. Selker, 2014 titled ‘The Trans-African Meteorological Observatory (TAHMO)‘, (WIREs Water 2014, 1:341–348. doi: 10.1002/wat2.1034) .
Plase also check the TAHMO website: http://tahmo.org/.
Readings for Frugal innovation: a business perspective
Serving the World’s Poor, Profitably
by Prahalad, C.K. and A. Hammond, 2002. Harvard Business Review, 80(9): 48-57.
This article is about strategies for Serving BOP Markets, about new business models and about the need for innovation. Notably, the article states that:
Having young managers spend a couple of formative years in BoP markets would open their eyes to the promise and the realities of doing business there. To date, few multinationals have developed a cadre of people who are comfortable with these markets.
Hindustan Lever is one of the exceptions. The company expects executive recruits to spend at least eight weeks in the villages of India to get a gut-level experience of Indian BoP markets. The new executives must become involved in some community project — building a road, cleaning up a water catchment area, teaching in a school, improving a health clinic. The goal is to engage with the local population.
To buttress this effort, Hindustan Lever is initiating a massive program for managers at all levels — from the CEO down — to reconnect with their poorest customers. They’ll talk with the poor in both rural and urban areas, visit the shops these customers frequent, and ask them about their experience with the company’s products and those of its competitors.
In addition to expanding managers’ understanding of BOP markets, companies will need to make structural changes. To capitalize on the innovation potential of these markets, for example, they might set up R&D units in developing countries that are specifically focused on local opportunities.
Readings for Frugal innovation & Inclusive Development
We have 3 suggested and in-depth readings for this lecture set:
- Understanding Frugal Innovation in Africa: Schumpeter revisited
by your teachers for this week: Cees van Beers, Peter Knorringa & André Leliveld.Familiar with economic theories? In this article, the authors explore to what extent Schumpeterian economic theories could improve our understanding of the role and relevance of frugal innovations for economic transformation in Africa. The authors indicate that these theories provide useful entrances to capture and understand frugal innovation. But at the same time, it is clear that Schumpeterian theories need to be further refined and complemented to become an adequate analytical framework for analyzing frugal innovations in a developing country context.
- Inclusive innovation: an architecture for policy development
by Chataway, J., R. Hanlin and R. Kaplinsky, 2014This paper is about how inclusive innovation needs to be understood and developed in the context of the innovation cycle (process and product innovation), and about the roles played by the poor as both producers and consumers.
It further charts the growing interest of private sector actors in inclusive innovation. Consideration is also given to the role which growth trajectories play in determining the direction of innovation. We advise you to read the article in section 4.3 first and then compare the conclusions.
- Cracking the Next Growth Market
Chironga, M. A. Leke, S. Lund and A. van Wamelen, 2012.This article is about the emerging African economy. In the 2000s, the African economy finally began to stir. Africa is today the world’s third-fastest growing region, and its collective GDP is equal to Brazil’s and Russia’s. Africans spend nearly $900 billion on goods and services — far more than Indians do. Pent-up consumer demand on the continent is enormous, and so are the opportunities! Consider that African telecom companies have added 316 million subscribers — a number higher than the U.S. population —since year 2000!
And yet, because of political instability and poverty, many companies have reservations about Africa. To help managers assess whether growth will continue there — and if so, where — McKinsey conducted an economic analysis of the continent and studied its consumer markets. The conclusion?
Companies can no longer ignore Africa. But they need to manage risks, develop innovative strategies to deal with gaps in infrastructure and training, and recognize that it isn’t one market. There are seen to be four main types of African economies: diversified, oil exporting, transition, and pre-transition. Each presents a different set of opportunities and challenges, and executives must develop their strategies accordingly.
Responsible Innovation by TU Delft OpenCourseWare is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Based on a work at https://ocw.tudelft.nl/courses/responsible-innovation/.