Frugal innovations are innovations that take scarcity and not abundance of resources into account. They are the meeting point between lack of resources and need for development, and they contribute to improved living standards in underprivileged parts of the world whilst keeping the local conditions and capabilities in mind. Frugal innovations are a new face to an old concept; to improve society by using what resources are available. This typically leads to simplified innovations that are affordable and accessible to people at the “bottom” of the world’s socio-economic pyramid (BOP) – innovations that are easy to distribute and use, and innovations that use a minimal amount of scarce or finite resources.
One face of the recent wave of frugal innovations is so-called reverse innovation. Reverse innovation is a process where distribution and/or marketing of products and services is done in developed markets, while the innovation of the product/service is done in developing markets. This is a fairly new concept, which is closely related to frugal innovation. Frugal innovations, as mentioned, typically (re)design products and services in a cost- and resource effective way. In other words; it can produce highly profitable solutions, that are not only desired for developmental reasons in developing countries, but also for financial reasons in developed countries.
Furthermore, by contributing to socio-economic development while dealing with scarce resources, or in other words – doing more with less, frugal innovations have quickly been praised as the key to achieve sustainable development. With the current climate crisis in mind, sustainable development has gained traction and relevance in the past years, and efforts to combat climate change are only likely to increase. Sustainable development is climate conscious socio-economic development; meeting the needs of today without compromising the needs of tomorrow. Frugal innovations have typically taken on the role of promoting and enhancing development efforts in BOP societies, whilst saving resources in research, design, production and/or distribution of the product or service in a way that usually can be considered sustainable.
Nevertheless, it should be mentioned that frugal
innovations are not automatically, per definition, sustainable innovations. Large
MNCs that capture frugal innovations for the sake of profit do not automatically
consider the product’s impact on the climate, and small businesses that develop
frugal innovations might find that a non-sustainable product is
beneficial for short-term development. There are many types and forms of frugal
innovations, and some are more sustainable than others, just like some are more
developmentally focused than others.
Frugal innovations have influenced the
global dynamic of who makes what for whom (reverse innovation), they have given
a new face to the old efforts of strengthening developing countries’
socio-economic prosperity (societal development), and they have been praised as
a possible key part of a greener future (sustainable development). The world of
frugal innovations is expanding and developing every day, and it will be
interesting to observe which face of this new wave will end up taking centre
stage, if any.