Frugal innovation: Models, means, methods

A world of innovation reimagined

A new book on frugal innovation seeks to challenge its definition but also hopes to inspire the next generation of social innovators...

In the introduction to Frugal Innovation: Models, Means, Methods, the authors observe that research, policy and practice on these topics have grown significantly over the last decade but deserve fresh attention from business school thinkers, researchers, and senior executives. They argue that frugal innovation bridges the motivations of standard business practices with the aspirations of social entrepreneurs to work through a common purpose: to profitably serve customers and promote inclusive growth and sustainable development.

The Tata Nano is one of the most obvious mainstream examples of frugal innovation, where an existing consumer product is made more affordable by re-imaging core processes and using input resources in novel ways. In 2008, Tata Motors designed an automobile aimed at Indian families who couldn’t afford a car. They stripped out a host of features and set the asking price at less than £2,000.

Despite winning a string of awards and generating a wealth of publicity, the Nano is not yet a commercial success. Production in India ceased last year. This points to a core lesson shared across the book and in practice: these kinds of innovation are not simply one-off ‘make things cheaper plays’ and instead build on the insights of changing whole systems of activity over time.

This book was inspired by the Oxford doctorate work of one of its co-authors, Yasser Bhatti, who sought to explore beyond this conventional view of frugal innovation, centred on stripping down existing products, and instead look at the work of social innovators who are rethinking whole systems and business models. The author team includes Bhatti, Marc Ventresca, Oxford Prof David Barron, and Dr Radha Basu (Anudip, IMerit).

Co-author Ventresca, Professor of Strategy and Innovation at Oxford Saïd, says, “If you do index search on the words ‘frugal innovation’, a lot of the media has been about how global multinationals start to ‘do leaner, healthier’ production in this way. Much innovation is also focused around tech change and large companies making systematic efforts to improve their products or processes or activities.

Frugal Innovation – book cover

“But over the last 20 years we’ve seen that large companies are not the only source of innovation, in part through Silicon Valley, but also the rise of entrepreneurial ventures and social entrepreneurs. The source has shifted.

“Also, innovation can be about trying to reimagine things in areas like health and sanitation or even traditional manufacturing.”

And the origins and test cases of these corporate efforts start from social enterprise initiatives around the world. Essentially, the book juxtaposes a series of case studies that exemplify how innovation is at the heart of finding new ways to solve old problems.

Ventresca says the book looks at innovation with “fresh eyes”. As an example, he says “a lot of innovation around providing electricity to sub-Saharan Africa no longer tries to build big grid systems; let’s use local resources and local ways of doing things to make electricity available through off-grid supplies.

“People are taking advantage of new materials and new resources and new business models. I hope people are inspired.”

Although academic research on these issues is in its early days, the book argues for linkages to a range of relevant other cases and established research on resources constraint and institutional activity systems. The promise of the book is a prompt to turn to social innovators to help solve some of the challenges related to social wellbeing in water, sanitation and energy services, providing people- and community-centred starting points to advance the targets for global sustainable development goals. 

The book serves as a fascinating entry point into the promise of frugal innovation and what it could achieve for the greater good.


Read: Frugal Innovation: Models, Means, Methods by co-authors Marc Ventresca and Yasser Bhatti, along with Radha Basu and David Barron (Cambridge University Press, £85)