4. Frugal Innovations as Responsible Innovations

In the previous lecture set, we examined what an innovation is, how innovations come about as well as the implications for responsible innovation. This lecture set focusses on a specific form of innovation associated with global development, i.e. frugal innovations. In fact, your lecturers this week work closely with the Centre for Frugal Innovation in Africa (www.cfia.nl) on these very issues.

But what do we mean by frugal innovation?

Frugal innovation is a new global phenomenon.  It is usually defined as stripping down and/or re-engineering products and services, to offer quality goods at very low prices to the people in who are at the “Bottom of Pyramid”.  A recent comparison of product prices has shown that frugal innovations can lower the price of a product between 50% to 97% (Rao, B. C., “How disruptive is frugal?” published in 2013).

But there are also broader definitions of ‘frugal‘. If you look in the dictionary, frugal is defined as “economical in use or expenditure; prudently saving or sparing; not wasteful; entailing little expense; or requiring few resources”. From an economic perspective, frugal products and services seek to minimize the use of material and financial resources in the complete value chain with the objective of substantially reducing not just the price point, but the complete cost of ownership/usage of a product; while fulfilling or even exceeding pre-defined criteria of acceptable quality standards.

Frugal innovations often – considering the clients – should be able to cope with everyday conditions like dust, heat or power failure.  So, the design – and the mindset of the designers-  has to take this into consideration. It has to serve users who face extreme affordability constraints, in a scalable and sustainable manner.

Take note! Frugal does not mean a poor-quality, off-the-mark, improvised solution!

We do hope these materials help you get inspired!

One good example of a frugal innovation is the TATA Swach. Developed by the Indian multinational TATA Group, the TATA Swach is a water purifier designed as a low cost purifier for low-income Indians, who lack access to safe drinking water.

Read more here: TATA Swach

Outline for this lecture set

  • We start by illustrating an example of frugal innovation: the TAHMO project in Africa.
  • We will briefly explain the concept of frugal innovations.
  • We present the business perspective of a private firm and how profit-related motives drive commercialization of frugal innovations. You will thus learn about the main economic determinants of frugal innovations.
  • After that, you are invited to do some research, pick a project that impresses you, and pin it on a world map, so everyone can see a global list of frugal innovations.
  • We switch then to discussing responsibility in frugal innovations, questioning how labour standards are important in the design and production of frugal innovations.
  • Our last focus pays attention to ways in which frugal innovations can be inclusive innovations, i.e. taking to heart the preferences of the local customers in developing countries. You will gain basic insights into how frugal inclusive innovations can contribute to local economic development.
  • We have some great bonus material, including a great running example of frugal innovation in India: a hospital that is affordable even to the poor, accomplished by both innovative services and cost-saving products with no concessions to quality.
  • 1. Case Study: TAHMO Wheather Stations
  • 2. Frugal Innovation: A Bussiness Perspective
  • 3. Frugal Innovations around the world
  • 4. The Issue of Social Standards
  • 5. Frugal Innovations & Inclusive Development
  • 6. Bonus: Affordable Healt Care in India

Readings are provided in the Readings section.

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