New Business Models for Frugal Innovation: Experience from an Enterprise Supporting Sustainable Smallholder Agriculture in Kenya

Abstract

Prior frugal innovation studies have highlighted their role in promoting ecological and social sustainability. The way enterprises coordinate a value proposition with the upstream and downstream value chain activities and a workable financial model are noted to be key in the delivery of innovations in low-income settings. However, the extant literature does not explicitly explain how enterprises combining socially oriented practices with economic rationality, successfully deliver their frugal innovation to low-income consumers. The current study thus contributes to this gap by employing the business model theoretical framework-via a single-case study design for a Kenyan enterprise supporting precision farming by serving smallholder farmers with digitally enabled low-cost soil sensors and interactive support services. Analysis of the case reveal four approaches that led to the successful delivery of the innovation: long-term focus, adjustable commitment, continuous experimentation, and the bricolage principle. In addition, digital technologies positively influenced the success of the soil sensors and respective business models. The study contributes to the literature streams around frugal innovation and social sustainability, by expanding knowledge around bringing frugal innovations to the market. Moreover, the study develops a framework of value creation and capture, in digitally enabled frugal innovation. This is of practical significance to enterprises engaging in frugal innovation in low-income contexts.

Social Innovation: A Retrospective Perspective

“…Furthermore, within social practices, it is even more complicated to derive distinctions between social and business innovations (e.g., Pol and Ville 2009) since even nonprofit organizations might follow economic as well as social purposes for various reasons (e.g., competition) (see Weerawardena et al 2021). In addition, frugal innovations can be examples of integration between social, business, and technological innovations, e.g., the case of smallholder farmers in Kenya (see Musona 2021). Consequently, some scholars doubt that the concept of social innovation should be understood as only a category in the classification rather than as an independent paradigm that characterizes the social aspects of any innovation activity (van der Have and Rubalcaba 2016).…”