Frugal Innovation and Development: Aides or Adversaries?

Abstract

Frugal innovations aim to bring products, services and systems within the reach of billions of poor and emerging middle-class consumers. Through significantly cutting costs while safeguarding user value, frugal innovations open opportunities for new business models and may well disrupt innovation processes in entire economies. The debate on the developmental implications of frugal innovation is ideologically polarized. Whereas advocates suggest a business view of 'win-win' in which companies can earn profits while simultaneously alleviating poverty, critics argue that frugal innovation will merely exacerbate capitalist exploitation and inequality. In this contribution we argue that an empirical approach is needed to assess where and when frugal innovation is more likely to enhance inclusive development.Les innovations frugales portent des produits, des services, et des systèmes à la portée de billions de consommateurs pauvres et de l'aspirante classe moyenne. Les innovations frugales baissent les couts et préservent la valeur pour les consommateurs, et créent des nouveaux modèles économiques qui ont le potentiel de perturber les processus d'innovation dans plusieurs économies. Le débat sur les implications développementales de l'innovation frugale est idéologiquement polarisé. Les défenseurs des innovations frugales suggèrent un scenario d'affaires bénéfique pour toutes les parties, ou les entreprises peuvent réaliser des profits simultanément soulageant la pauvreté. Les critiques des innovations frugales soutiennent qu'elles vont simplement augmenter l'exploitation capitale et l'inégalité. Dans cet article, on soutien qu'un approche empirique est nécessaire pour établir où et quand une innovation frugale est plus susceptible de soutenir le développement inclusif.

Sustainability value creation in frugal contexts to foster Sustainable Development Goals

“…By participating or involving local BOP actors or low‐income people in value chain processes of designing, producing, and distributing of frugal innovations, inclusive growth can be created (Knorringa, Peša, Leliveld, & Van Beers, ). Only by the joint collaboration and integration of the respective groups addressed by the social exclusion framework as well as profit‐sharing business models, frugal innovations can become inclusive innovations (Brem & Wolfram, ; Heeks, Foster, & Nugroho, ; Knorringa et al, ; Papaioannou, ; Soni & Krishnan, ). Bocken, Short, Rana, and Evans () define business model innovations for sustainability as “innovations that create significant positive and/or significantly reduced negative impacts for the environment and/or society, through changes in the way the organization and its value‐network create, deliver value and capture value or change their value propositions” (Bocken et al, , p. 44).…”

“…In BOP research, selling to the poor did not appropriately mitigate poverty and social exclusion (Papaioannou, 2014;Prahalad & Hammond, 2002) and was strongly criticized (Shivarajan & Srinivasan, 2013;Simanis & Hart, 2008). By participating or involving local BOP actors or low-income people in value chain processes of designing, producing, and distributing of frugal innovations, inclusive growth can be created (Knorringa, Peša, Leliveld, & Van Beers, 2016). Only by the joint collaboration and integration of the respective groups addressed by the social exclusion framework as well as profit-sharing business models, frugal innovations can become inclusive innovations (Brem & Wolfram, 2014;Heeks, Foster, & Nugroho, 2014;Knorringa et al, 2016;Papaioannou, 2014;Soni & Krishnan, 2014).…”

Frugal Innovation and Development Research

“…However, little is known about the entrepreneurial opportunities this offers for domestic firms. On the one hand, there is an optimistic view that polycentric innovation can indeed lead to more chances for domestic firms; on the other hand, there is a critical view that points out possible crowding out or exploitation of (informal) domestic firms (see Knorringa et al, 2016). Both views lack empirical evidence though when it comes to the Global South.…”

“…A frugal innovation angle to development research is well positioned to critically explore the interactions and conflicts between informal and formal actors and various bodies of knowledge, and to identify under what conditions such innovation processes are more likely to contribute to more inclusive developmental outcomes. For this, we need a critical multidisciplinary approach to frugal innovation practices as well as an empirical approach (Knorringa et al, 2016) the articles in this special issue aim to contribute. The next section will position the several articles in this special issue in the frugal innovation and development debate.…”

Frugal MOOCs

“…Content customization. Numerous studies, including those by Kop (2011), Gunawardena (2014, Palin (2014), and Knorringa, Pesa, Leliveld, and Van Beers (2016), have highlighted the overall need for content customization in MOOCs in order to make them adaptable to and repurposable for learners' contexts. This involves incorporating content in the local official and vernacular languages used by learners, as well as providing relevant course materials by adapting the content to the participants' contexts (Gunawardena, 2014;UNHCR, 2016b).…”