Frugal Innovation - When functionality meets affordability !

Cost-Effective Innovation Without Compromising on Quality and Performance – Is That Possible

Every process or a product faces a situation to upgrade from its current position. The need for this could be attributed to the increasing demand from the consumer. Or it could be as a result of tough competition from its peer, pushing to the race of survival among the crowd. The resource on which the product/process relies could be scarce. Thus, the need demands a response to adapt quickly to the needs of the situation for marching forward. But what is the way to meet those demands? How could this be achieved? The answer to all these questions lies in Innovation.

What is Innovation?

Innovation can be as simple as fine-tuning the existing properties to make things efficient and optimized. The term ‘Innovation’ has a wide variety of definitions. But the term 'Improvement' can be seen as a common word in most of the definitions. Innovation becomes important when a product becomes obsolete and demands a revival. Innovation also helps in the optimum use of resources. Thus, it ensures the sustainability of the environment. As the saying goes, 'Necessity is the mother of innovation', it’s that necessity which acts as a catalyst to bring in the innovation factor in a process. It was that necessity which Amazon utilized to become a behemoth in e-commerce. It was that necessity for an easy way for accommodation that Airbnb understood and turned the tide in its favor.

Frugal Innovation

There are different kinds of innovation. Some are meant to be disruptive; some are meant to achieve optimization. Sometimes, these changes come at a cost that may not be economically feasible at the beginning. If you think that improvement is pricey, you are wrong. There is a specific branch of innovation which deals with minimizing the cost and complexity involved in a process without affecting the performance, that is none other than Frugal Innovation. The point to be noted is that frugal innovation doesn't compromise the durability of the product. Rather it delivers the expected performance with the removal of non-essential things.

The Reason for Frugal Innovation

Often the need for frugal innovations arises due to scarcity of the resource. Some other factors include producing cheaper components due to stiff competition without compromising on quality and so on. But the main reason being behind the need for frugal innovation is less resource and the need to utilize that resource in the most efficient manner. Frugal innovators do not aim at sophisticated technology. Rather they make use of available resources to produce a quality product at a low cost. In our country, people term frugal innovation as 'Juggad' in Hindi.

Example of Frugal Innovation

Solar Light Bulb

One of the famous examples of frugal innovation is the solar light bulb which started from the Philippines and reached all parts of the world. This was brought as a solution to light homes of millions of people with minimal access to electricity. By making use of reflection and refraction of light in a soda-bottle filled with water and a little quantity of bleach, the solar light bulb was able to produce bright light equivalent to a 40-watt bulb. This helped people to reduce their electricity cost during day time to a greater extent. A modified version of the former enabled people to use it even at night by attaching a mini bulb within.

Cheapest Voice Box

For people affected by throat cancer, especially laryngeal cancer, getting back their voice after the operation was far away from reality. Since the larynx had to be removed, people had to be implanted with an artificial voice box in their throat to help them talk. But the artificial voice box was too expensive to be in reach for an average Joe. Dr. Vishal Rao came up with a unique solution and produced an affordable voice box with a price tag of fifty rupees only. Medical equipment requires extreme quality and performance and his affordable voice box had all these functions included in it.

India – a Leader in Frugal Innovation

It is said that most of the frugal innovation happens in Asian and African countries. And India has been touted as one of the leaders in this field. Due to scarce resources, people are forced to come up with a solution satisfying the local needs. This demand has indeed made people come up with unique, yet low-cost solutions. Some of the examples include Tata Nano, the world's cheapest car and Reliance's Jio 4G smartphone, etc... As innovators in India required delivering products at less cost without sacrificing quality, frugal innovation made a strong growth.

Is it a sustainable approach?

To be economically profitable, companies need to sell at a higher volume to achieve profits while employing frugal innovation. And not every product has a huge market base to help companies achieve the break-even point in their business. This has been one of the reasons for frugal innovation not being implemented in all products. But a company can be successful while combining both innovation and a robust business model. An example can be the one-rupee shampoo sachet, which is the cheapest. Yet companies were profitable due to robust distribution channels and marketing strategies.

Frugal Innovation – the Game Changer

Frugal Innovation and a viable business model are two sides of a coin to achieve success. For instance, Samsung has been successful in both developed and emerging markets. It has broken a myth that a company can sustain well either in emerging or developed markets, but not everywhere. It competes well with Apple in a developed market. At the same time, it retained the higher position in the low-end market, edging out Nokia and others. The reason is finding out the right balance in innovation and business model.

To sum it up, frugal innovation requires an in-depth understanding of the problem to come up with a unique solution. Turning a problem like scarce resource into opportunity, combined with robust execution and business model helps people to be successful in the field of frugal innovation.

Article by

Hayagrivan Balaji

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