Germinating seeds in dry soil: examining the process of frugal innovation in micro- and small-enterprises at the base of the pyramid

Abstract

Purpose This study aims to examine the process of frugal innovation (FI) in micro- and small-enterprises (MSEs) at the base of the pyramid (BOP) through the analytical lens of business models. Design/methodology/approach A case study was conducted with 30 MSEs from three different industries in a very poor region in Brazil. Findings The findings indicate that, in cases where FI is intense and dynamic, the start of the FI process is based on the reinterpretation of fashion trends and influences from the business ecosystem while the consolidation of FI in MSEs occurs through the reconfiguration of resources. Additionally, this study shows that FI depends on conditions other than the production of frugal products for BOP consumers. Research limitations/implications This study points out that the presence of end-of-life non-BOP raw materials distributed by large distributors in the case of fashion products, along with the interaction between MSEs at the BOP and these distributors, trigger FI and are profitable for both. For non-fashion products with long life cycles, there is no demand for innovation. Originality/value This study addresses the research void present in the literature on FI by presenting the process of FI and the conditions that leverage or stagnate FI in MSEs at the BOP, as well as how business models are shaped by these conditions.

Predicting the performance of MSMEs: a hybrid DEA-machine learning approach

“…Second, by using data from more than 5400 Vietnamese manufacturing MSMEs operating during the 2010-2016 period, yielding a total of 37,557 observations, this study is among the first (DEA) studies focus on the performance of manufacturing MSMEs in developing countries to use big data. It is noted that the performance of manufacturing MSMEs has been examined in a few countries such as India (Kamble et al, 2020), Brazil (Borchardt et al, 2021), and Turkey (Sariyer et al, 2021), but a study combining big data and predictive analysis has not been conducted in the Vietnamese context. More importantly, the novel use of CSW means that it can provide widely acceptable recommendations for the MSMEs to help them improve their performance.…”

Sustainable development through frugal innovation: the role of leadership, entrepreneurial bricolage and knowledge diversity

“…The present study investigates this phenomenon in the context of SL. We propose using SET (Blau 1964) to explain how SL stimulates FI via DKS. This theory argues that people feel obliged to others who provide them with support and resources needed and reciprocate desired behaviors.…”

“…Accordingly, frugal innovation (FI), which is based on simplification, striving for less instead of more (Albert 2022), has emerged as highly effective (Kroll and Gabriel 2020). It works by promoting the development of affordable products with only essential elements that meet the needs of resource-constrained consumers (Borchardt et al 2021;Cortese et al 2023). FI is not only an appropriate strategy to deal with resource constraints but also improves the customers' quality of life at the BOP level (von Janda et al 2020;Iqbal and Piwowar-Sulej 2023b).…”

Exploring BoP Generations through Business Model Innovation Lens: A Review and Framing

“…Bricolage, another innovation mindset, proves fitting for maneuvering through resourcescarce environments [27,60]. This approach encourages the amalgamation of available resources to solve problems and seize opportunities, serving as an engine for value creation [174]. It particularly finds application in situations where firms are resourceconstrained, enabling them to outpace competitors and generate value [175].…”

“…This includes customers, partners, suppliers, producers, investors, competitors, research institutions, civil society organiza-tions, the government, and other actors connected to the components of the business model. The configuration or reconfiguration of a business model responds to the ecosystem it operates within, and certain events or innovations can trigger systemic changes within the business ecosystem [6,32,174,177].…”