The study develops a case-based comparison between practices in sustainability that have arisen from margins of formal capital markets in two different institutional frameworks. The first framework is that of the U.K, a ‘developed’ market and the latter is that of India, a ‘developing’ market. Transcending economic ideas about development, the case comparison articulates similarities and differences in institutional factors such as cultural mindsets (e.g. frugalism), dimensions of innovation, and the market structures of both countries. Finally, the study investigates the link between sustainability and frugal innovation within the broader question of capital systems, circular economy principles and climate pressures.
18th February 2017
Frugal innovation or “doing more with less” is an idea “whose time has come” (The Economist, 2015). Rooted in the multidisciplinary field of frugality, the concept is age-old and is grounded in the idea that “scarcity of resources in not an impediment but an enabler” (Peter Loscher, Siemens CEO in INSEAD, 2013). The Financial Times (2012) says that frugal innovation has become “increasingly fashionable” and The Economist (2015) knells its bell as “cheap and cheerful”. However, frugal innovation is more than cutting-costs and “doing more with less”, it’s about delivering value through learning something “like new processes- or a whole new mindset” (Harvard Business Review, 2012). It’s also about doing better with less, through solving problems and meeting unmet needs in areas like education, infrastructure and healthcare for community well-being. These needs are particularly pressing in developing markets, where large segments of the population have been “structurally denied access to resources, capabilities and opportunities”. (George et. al., 2012, p.1).
As a young term in scholarly literature, frugal innovation is dispersed and difficult to trace formally. The extant research on frugal innovation focuses heavily on understanding the context of frugal innovation and its applications within the institutional framework of developing markets (Radjou and Prabhu, 2015; Tiwari and Herstatt, 2012; Zeschky et al., 2014). There is also very limited mention of frugal innovation in developed markets (Bound and Thornton, 2012; Tiwari and Herstatt 2013), even though it is steadfastly being established by the realities of mainstream market-based exchange. These realities include ageing populations, depleting natural resources, falling disposable incomes and competition from the swelling middle classes of emerging markets. Coupled new institutional and technological structures in knowledge societies, the space for frugal innovation has already been made (Welz, 2004).
This study suggests that frugal innovation is an important idea to move forward because, if reconfigured, it can drive sustainable growth for community wellbeing that is socially inclusive and ecologically prudent, without moving away from market-based exchange entirely. The concept has the ability to bridge this gap between market-based exchange out of scarce resources and community well being, through the using information and knowledge, neither of which are limited in supply. This can be done through activating creative improvisations from localised innovations, and by placing value on the knowledge of people in micro-communities, most often inhibited by the constraints of tight institutional regulations. For example, during the financial crisis of 2008, European economies that possess strong informal sectors coped better than those that are tightly regulated (Neuwirth, 2011).
Furthermore, frugal innovation as defined here, does not discard market-based exchange or the need for financial sustainability but emphasises some market principles such as affordable pricing and scalability. This is particularly true for those innovations that consumers purchase out of an apparent and exhibited preference for frugal solutions that have not come from severe resource constraints. In fact, such choices suggest a match in the mindsets of consumers and producers, hence supporting the dissemination of socially informed consumption choices that adhere to the constraints of sustainability. Such consumption can be explained through a combination of factors unrelated to higher consumer spending or the need to amass resources. These might include an overall mindset of frugality and institutional frameworks shaped towards collaboration, unused assets, informal knowledge, technological platforms and abundant information.
To bridge the gap between market based exchange and sustainable growth, this study aims to build a conceptual framework around “doing more with less for more people” that can be used to move the concept forward to developed markets (Bhatti and Ventresca, 2011). It also intends to contribute to the literature on frugal innovation through juxtaposing institutional frameworks and innovation processes in developed and developing markets.
In moving the concept forward, the study considers the novelty and theoretical shakiness of frugal innovation, and thus builds on the conceptual underpinnings of frugal innovation around the core features that have been recognized for their applicability in different contextual settings. The suitability of these core features is considered in the context of developing markets and extended to developed markets. The two cases considered in this study, Mitticool and Sugru, are innovations that have emerged from the bottom-up and have used existing knowledge in resource-constrained settings to meet social, economic and ecological needs. In so doing, this paper makes an important contribution to the literature that has largely focused on corporate cases emerging from India, like the Tata Nano, General Electric’s (GE) ECG machine, Aravind Eye Care, Tata Swach and M-Pesa, with fewer and more recent mentions of innovations from the developed world, such as low-cost airlines and sharing economy products in non-academic literature (Bhatti and Ventresca, 2013; Radjou and Prabhu, 2014; The Economist, 2015; Hossain, 2016; Tiwari et al., 2016). Manuskhbhai Prajapati of Mitticool built a clay refrigerator for people without electricity in rural India, while Jane Ni Dhulchaointigh of Sugru developed a mouldable glue-based material in the U.K, in order to enable more fixing and less waste. Minimizing the use of resources is a key element of frugal innovation. This indicates an “in- built dimension of sustainability” within its conceptual structure (Tiwari et al., 2016). For this reason, the study treats sustainability as a core feature of frugal innovation and investigates the robustness of this relationship in differing institutional frameworks are evaluated. A key ramification of differing contextual settings for frugal innovations is the idea that institutional frameworks within which innovation occurs, “may condition what they do” (Hall and Soskice, 2001). By considering frugality as a mindset and thus a core feature of frugal innovations, its position within a larger institutional framework is evaluated. Finally, by focusing on two examples of frugal innovation in different institutional settings, this study hopes to advance our understanding on how far the core features of the innovations adapt to their own contexts through reflecting upon the innovator’s mindsets and studying the innovation journeys of the two successfully scaled, bottom-up innovations.
The paper is divided into four main parts. Chapter 2 builds a conceptual framework around frugal innovation through providing an overview of the concept in a historical framework and the complexities associated with what it means to do “more with less” and “more for more people”. Following this will be a brief overview of related concepts like “jugaad innovation” and an explanation of the core features of frugal innovation established by the literature. It will then extend the conceptual definition of frugal innovation to sustainability and developed markets, by building on existing literature about sustainability and its need in developed markets. As a vehicle to investigate establish the linkage between frugal innovation and sustainability as intertwined concepts, given current systemic challenges, sustainability is further broken into social, economic and ecological dimensions.
After laying the conceptual foundations of the concept, chapter 3 explains the methodology of this study and its qualitative orientation towards a case comparison. Through expanding on empirical data, chapter 4 lays the institutional frameworks of two similar but contextually different cases of frugal innovation; Mitticool in India and Sugru in the U.K. This juxtaposition will explore the role of support from external institutions along the innovation process. Following the case study presentation, Mitticool and Sugru are further evaluated in chapter 5 along the core features of frugal innovation, including, novelty, resource-constraint, affordability, scalability and the mindsets driving frugality in developing and developed countries. The concluding section weighs the similarities and differences that exist within the institutional frameworks surrounding frugal innovations and the impact of their responsiveness to seismic challenges today.
This chapter will introduce the idea of frugal innovations through considering the place of frugality within its multidisciplinary context and tying it together with innovation through a brief historical overview. Additionally, the idea of frugal innovation as a means of “doing more with less” and “for more people” will be considered separately in order to break the concept down and explain the wider complexities associated with it. This is followed by a brief overview of related concepts in the literature, the core features that differentiate frugal innovation and ends with positioning the concept in the larger framework of developed markets through considering the role of sustainability in frugal innovations.
2.1 Frugality and Innovation
According to Tiwari et al (2016), with only 11 entries on Google Scholar in 2009, tracking the novelty of the term “frugal innovation” precisely is difficult due to the fact that there is considerable overlap with similar terms such as Jugaad Innovation, Reverse Innovation and Low Cost Innovation, which will be explored further in this paper (Zeschky et al., 2014; Tiwari and Herstatt, 2014). Although frugal innovation is a relatively young term in scholarly discourse, “frugality” is embedded in history. A brief overview of frugality’s place in history will help establish its relevance for this study by identifying some of the “factors that eventually affect the acceptance of frugality in society” (Tiwari et al., 2016; p.7).
Beyond Merriam Webster’s (2011) dictionary meaning of frugality as “characterizing by or reflecting economy in the use of resources,” the concept spans across religious, psychological, cultural and economic literature, but is scarcely found in academic literature (Bhatti and Ventresca, 2013). For example, 16th century Puritan society prided itself on a philosophy of frugality aimed at saving money for more charitable purposes, while Indian culture is characterized by practicing “jugaad” or “making do”, and out of Zen Buddhism comes Japanese minimalism which rejects consumerism for frugalism. In China, Shanzai companies practice frugality in economics or “zizhu chuagxin” through producing based on established designs rather than research (Leadbeater, 2014). Levi-Strauss (1966) pays homage to frugality in anthropology through the term “bricolage”, which is applied to using existing and constrained resources to develop new tools. Thus, Tiwari et al., (2016) suggest that frugality has only recently been adopted in business terms but has existed in discourse on Psychology and Ethics, Anthropology and Engineering Sciences.
In business terms, Lastovicka et al’s (1990) research on behavioral sciences defines frugality as the “degree to which consumers are both restrained in acquiring and in resourcefully using economic goods and services to achieve longer term goals” (p.88). Rather than a negative connotation, thrift has its positive connotations with the word thrive, where frugality counters “unrestrained materialism” by making “the best, most efficient use of limited resources” (Lyubomirsky, 2013, p.133). Hence, frugality moves beyond being sparing, thrifty or cost- effective on an individual level, to being conscious of inputs and value-creation on a social level. In creating more value for stakeholders and society, frugality is “responsive to social and ecological conditions” of “excessive and unfair consumption and production”, including resource constraints in the form of finance, raw materials, machinery, time and skill (Nash 2000, p.169). Drawing on its multidisciplinary background, the frugality associated with responding to resource-constrained environments implies a degree of improvisation and progress that is not nearly as novel as the attention it has been gaining recently.
Similar to frugality, the concept of innovation is also responsive to social and ecological conditions. Born from the Latin word, ‘innovatus’, which means to ‘renew or restore’, innovation implies progress. Closely linked to the idea of improvisation and often used interchangeably with terms like invention and improvement, Phills, Deiglmeier and Miller (2008) describe innovation as either a process or outcome based concept, which must be novel in the context to which it adds value, but does not necessarily have to be entirely novel in creation. Traditional innovations most often capture their value creation through profitability. For technologies, this implies that an innovation must add value over its cost and is either motivated by a response to market trends or to existing resources. Most often, such a definition restricts innovation to firms who have resources for R&D. However, to restrict the definition of innovation just to feasibility and commercialization, takes light away from its ability to add value to society through non-traditional institutions, like small households (Phills, Deiglmeier and Miller, 2008). A more wholesome definition of innovation is that which is most often a recombination of existing ideas applied in a novel and feasible way, that permit greater efficiency, greater effectiveness or both within a given context (Van de Ven, 1986).
An early example of frugal innovation as a “means of doing more with less” is traced back to Neanderthals in their ability to craft tools like hunting spears by making do with materials they had at hand (Bhatti and Ventresca (2013). In the Frugal Innovator, Leadbeater (2014) traces Frugal Innovation back to Japan after World War Two, when it was faced with extremely limited natural resources, starvation and social upheaval. At the time, Toyota, the car manufacturing company, followed the process of small batch production, which took long periods to assemble and relied on inventories for sale in a time of severe austerity. Near bankruptcy and fighting for the company’s, Taiichi Ohno, Toyota’s President at the time, exercised his philosophy against waste, “which he defined as human activities that absorb resources without creating any value,” to develop ‘just-in-time’ production (Leadbeater 2014, p.67). He directed his team to leverage team to existing machines for multiple tasks rather than fixing them to one task and without relying on inventories for sale, he was able to cut costs and deliver more efficient results.
Bhatti and Ventresca (2013) trace identifiable examples of frugal innovation even further back to Benjamin Franklin, who invented the Franklin stove and the lighting rod out of scarce resources to solve daily problems in the 18th century. They illustrate a more comprehensive initiative in frugal innovation by examining the case of a British clothing scheme during the Second World War. The example cites the British Board of Trade, who introduced the Civilian Clothing scheme of 1941 in order to ensure high quality but affordable garments when civilians were faced with austerity. Through enforcing certain limitations, like no more than 2 pockets in a skirt and restrictions on using materials such as wool, the scheme commissioned top London designers to develop fashionable collections that helped the scheme gain legitimacy (Hull, 2011). Even British Vogue praised the collection of 1942 for “the clean elegance of a style stripped of all superfluities” (Mendes 1999, p. 45). In addition to social endorsements that aimed to educate society in frugal practices, the scheme involved removing all unnecessary features that added extra cost to the products.
2.1.1 “Doing More with Less”
The idea of “doing more with less” is manifest in C.K Prahald’s (2005) conception of the “bottom of the pyramid”. This idea was explored by Gibbert et al (2009), who do not specifically mention the term “frugal innovation”, but touch upon the idea that parsimony in using resources “provide stimuli for finding innovative solutions” (p.17). The first appearance of frugal innovation in academic discourse is difficult to place due to an overlap with other concepts, however Bhatti (2011) first attempted to formally define the concept as a means of “doing more with less”. Citing “frugal innovation”, he suggests the practice arises in response to constrained resource settings through providing functional solutions in settings where formal institutions, such as financial services or healthcare facilities, do not exist to meet local needs. The concept is not limited to a single entity but relevant to multiple entities in developing markets, ranging from small and medium enterprises, to multinationals, and from non-governmental organizations to state organizations.
In an effort to make products and services more affordable for lower income population segments, cost reduction arises from the idea of proving the “same for less” (Zeschky et at., 2014). Rao (2013) suggests that “doing more with less” relates to “scarcity induced” innovations that aim to make minimal use of financial and natural resources. However, providing the “same for less” and minimal use of resources imply a focus on cost reduction that may focused solely on reduction in the cost of resources for producers rather than focusing on affordability for consumers. Nearly all definitions concerning frugal innovation emphasize the significance of affordability but most fail to differentiate on whether this must be from a customer perspective or producer perspective (Weyrach and Herstatt, 2016). Cunha et al (2014, p.202) partly clarifies this by explaining that doing more with less through frugal innovation entails “responding with extreme efficiency to some essential need”.
A clearer definition of “doing more with less” surfaces as in Tiwari and Herstatt (2012) establishment of the relationship between “doing more with less” and affordability “for more people” through reducing the “total cost of ownership”. Evidently, this relationship depends on what else is accessible in the market and consumer perceptions of how far “the total cost of ownership” is reduced by an innovation.
2.1.2 “Doing More with Less for More People”
Following the significance of affordability and accessibility in frugal innovations, Bhatti and Ventresca (2013) define frugal innovation as “the means to the ends to do more with less for more people”, by highlighting the importance of understanding resource constraints within certain environments, including the limited purchasing power of customers. Rao (2013) also emphasizes the importance of making purposeful products, that have no extra features in order to lower price and add value for customers rather than costs. Coupled with constrained resources, “institutional voids” are used to explain the absence of infrastructure that regulates and supports businesses in market ecosystems. It is in these institutional voids, that frugal innovations arise in response to meet the unmet needs of “more people” than the market is serving. Finally, Bhatti and Ventersca’s (2013) definition assumes frugal innovation come from developing markets, where resource constraints and institutional voids are very observable.
By providing “more people” with access to better products, services and processes, frugal innovations create value for customers through providing relevant alternatives to what already exists in their environment. This process of value-creation is captured in the capacity of frugal innovations in meeting unmet needs or higher quality products and services in novel ways, as in the case of better and more affordable education and healthcare models. The dimension of inclusion in frugal innovations goes beyond meeting basic needs, to promoting novel alternative to what exists in local environments. These solutions are characterized by higher quality through features like functionality, durability and efficiency when compared to existing solutions in local conditions (Rao, 2014; Cunha et al., 2014). Building on this idea of inclusion and taking the definition given by Kahle et al. (2013), frugal innovations aim to raise living standards for “more people” in developing countries in five areas where unmet needs exist: distribution, education, income generation and security, and infrastructure.
R.A Mashelkar (2010), former Director General of the Counsel on Scientific & Industrial Research, emphasizes how the inclusion of lower income households in the formal market also leads to individual and social mobility through value creation. It is for this reason that he says that a frugal innovation is rooted in “transformational innovation” (Mashelkar, 2010, 07:53). Inspired by low cost designs from Gandhian Engineering, the idea of “transformational innovation” goes even further than market inclusion through technological innovation and cost cutting techniques because it transforms the fabric of society through social inclusion. It does this by empowering consumers who have been excluded from certain markets, through increasing their buying power, real income or alternative payment schemes. In this process of value creation, enhanced feelings of social inclusion and a rise in their future prospects, the poor may be made better off.
2.2 Related Concepts
The complexity associated with the defining frugal innovation formally is partly related to its overlap with other concepts in the field of social innovation2. Therefore, it is useful to briefly outline what the concept of social innovation entails and then to differentiate “frugal innovation” from similar ideas that are mentioned frequently in the literature.
2.2.1 Bottom of the Pyramid
Traditionally, the focus on innovation has been on corporations who innovate for populations who guarantee high purchasing power and have trickle down effects to lower income brackets and countries. Prahalad (2005) shifted this focus to developing markets, through “bottom of the pyramid” innovation by focusing on 95% of India’s population living on less than 3 USD a day (World Resources Institute, 2007). As mentioned in 2.1.1, those at the “bottom of the pyramid” represent a captive market, where resource-constraints and poor infrastructure provide an opportunity for providing solutions to those with low purchasing power. Like frugal innovation, these environments are associated with low costs and high efficiency in order to meet the needs of customers in an affordable and durable way.
However, Gupta (2016) cites the example of microfinance and high interest rates in the long run, to question whether this approach really benefits the poor in the long run. He further suggests that people may be living at the bottom of the economic pyramid but “are not at the bottom of the knowledge, ethical or social pyramid” (Gupta, personal communication, October 4th 2016). Unlike frugal innovation, the approach treats the poor as economic agents for multinational companies, who can consume or aid production in the form of unskilled labor, rather than innovators, who co-create products and services. Furthermore, it ignores the role of local innovators and entrepreneurs who can work from the “bottom-up” and are able to build very relevant solutions for unmet needs through understanding the extend of local resource constraints (Gupta, 2013).
2.2.2 Social Innovation
Building further on the idea of BOP innovation, social innovations are relevant to frugal innovations because they focus on value creation for society as a whole. Rather than following the “top down” model of innovation that delivers value to private individuals and is aimed at population segments with high purchasing power, social innovations address problems in society and deliver more efficiency, effectiveness and sustainability than existing solutions (Phillis et al., 2008). Due to the overarching framework of the concept, it does exclude local innovators, NGOs and charities, large corporations or limit its definition to any particular kind of innovation model. This framework includes the often differentiated form of market-based organizations, where resource acquisition is through direct financial returns from economic value creation, and charity-based organizations where resource acquisition depends on donations for indirect social value creation (Miller et al., 2012). In overcoming the apparent tension between these forms, the social value created from frugal innovations, aims to equalize (or exceed) financial returns (Porter and Kramer, 2011).
Like social innovations, frugal innovations transcend the form of organizations, but emphasize the role of meeting unmet needs over profitability through social value creation. A key characteristic of social innovations is their ability to derive clever and creative solutions within resource-constrained environments and in the absence of existing institutions to meet user needs. For this reason, frugal innovations fall within the larger framework of social innovation in their aim to use limited resources most effectively and efficiently for value creation.
2.2.1 Jugaad Innovation
Rajdhou et al. (2012) drew inspiration from the mindset of improvised solutions that are born out of cleverness, and termed the concept “Jugaad Innovation”. Similar to frugal innovation, the concept focuses on how to innovate through working with creativity and intelligence by creating opportunity in adversity. Those innovations born from the “jugaad” mindset aim to encompasses the characteristics of flexibility, simplicity and inclusion. The term, however, also means a “temporary fix” in Hindi, and is founded upon examples in the complex and volatile environments of emerging markets, often characterized by immature industries, great scarcity and rapid change. As part of his seminal book of Innovation and a Global Knowledge Economy in India, Thomas Birtchnell (2013), found that 13.88% of pedestrian casualties of 2139 cases in road traffic incidents were due to “jugaad”. In a sense, the mindset of “jugaad” nearly implies a compromise on quality or the production of an inferior product through using cheaper materials. This raises questions about the durability and hence sustainability of the product or service, whereas in order to enable long term affordability and value creation for more people, the durability and sustainability of a frugal innovation are imperative.
2.2.3 Reverse Innovation
A similar definition lies in the concept of “Reverse Innovation”, which Govindarajan and Trimble (2012), define as innovations that are first adopted in emerging markets of the developing world and then possibly applied to the developed world. As a means of meeting needs in resource-constrained environments, reverse innovations aim to “do more with less” like frugal innovation. Zeschky et al., (2014) argue that a reverse innovation in developed markets is actually a frugal innovation in developing markets. While Reverse Innovation addresses gaps in performance, infrastructure, sustainability and regulations, it fails to go beyond strategy and capture the role of value chains in reconfiguring ecosystems within developing countries (Bound, Thorton 2012).
Moreover, Reverse Innovation acknowledges the global role of social innovations rather than limiting them to underserved communities in emerging markets, but unlike Inclusive Innovation, the concept does not pay much attention to removing barriers for inclusion and well being in both developed and developing markets. Instead, limiting reverse innovations to low-resource settings dismisses frugal ideas born in the developed world where the innovator faces the same environmental conditions as the customer.
2.2.4 Inclusive Innovation
Underscored by George et al. (2012), Inclusive Innovation builds on reverse innovation by providing “low cost and high quality products and business models originating in developing countries and exportable to other developing countries or even the developed world” (p.1). By doing this, the concept aims to reduce social and economic barriers for marginalized populations through innovation in products, processes and institutions, but does not focus on the scalability of the product or service through commercialization. This is because efforts in Inclusive Innovation allocate a large responsibility to governments in funding, in the form of grants, which mean that products and services encounter issues in commercialization but become dependent on government funding (Dahlaman, 2014). Furthermore, both Reverse and Inclusive Innovation fail to address the question of how scalability in either developed or developing markets may be achieved while ignoring important questions like the impact of these innovations along social, economic and ecological lines.
Although comprehensive in describing important qualities that frugal innovations should have, the above definition fails to differentiate it from similar ideas, which are often used interchangeably in literature on social innovation. These include the aforementioned Jugaad Innovation, Reverse Innovation and “Inclusive Growth” (Radjou et al., 2012; Govindarajan and Trimble, 2012; George, McGahan and Prabhu, 2012). While these terminologies are certainly similar in their focus on resource constrained environments, they are evidently not defined well enough if used interchangeably. Further concepts like “disruptive innovation” also have synergies with frugal innovation but cannot be analyzed due to the limited space in this study.
2.2.5 Bottom-up Innovations (and Grassroots Innovations)
Bottom-up frugal innovations are often cited closely to the category of grassroots innovations, where the outcome is as significant in defining a frugal innovation as the process (Basu et al., 2013; George et al., 2012). However, these innovations often face challenges in scalability, which inevitably limit their impact beyond local communities and make their effects in difficult to assess. This is not aided by cultural, language and regulatory barriers between regions, however, the presence of external institutions that provide access to financing, distribution and mentorship may enable them to “do more with less for more people”.
Gupta (2013) highlights the important role of grassroots innovations as those that know local problems first-hand, understand the limited availability of resources and have the potential to address them through trial and error. The concept of grassroots innovation is unspecific but for purposes of simplicity, this paper will be follow the most frequently cited definition of “activists and organizations generating novel bottom-up solutions for sustainable development and sustainable consumption; solutions that respond to the local situation and the interests and values of the communities involved” (Seyfang and Smith, 2007, p. 585).
In this definition, there is no apparent incompatibility between the concepts of grassroots innovations and frugal innovations, except that frugal innovations as defined in this study, do not discount commercial interests and may not necessarily emerge from the community level as grassroots innovations do. Thus, cases of grassroots innovation may also be frugal innovations but frugal innovations may not always be grassroots innovations. Furthermore, grassroots innovations are frequently used in tandem with just developing markets, where resource constraints and institutional voids are more prominent than in developed markets (Gupta, 2013). Given existing challenges for populations in developed countries and a growing awareness about limited natural resources, social and sustainable innovations are important in developed markets as well. In order to avoid confusion with the terms, this paper will refer to “bottom-up innovations” rather than grassroots innovations as a concept that contains the core features of frugal innovation relevant to this study.
2.3 Core Features
Like Jugaad Innovation, frugal innovations imply a mindset that responds to resource constrains, whether institutional, financial, human or material, in a cost effective, affordable and quick manner. However, unlike the above terminologies, frugal innovation emphasizes adding value to the community either by improving standards of living or outperforming other alternatives in a durable and sustainable manner. As key drivers in the innovation process, resource constraints and environmental contexts like institutional support, frame the nature of frugal innovations in either product, services or process forms. Thus adding value through frugal innovation as “doing more with less for more people”, becomes subjective to overcoming problems or meeting unmet needs in different socioeconomic contexts (Bhatti, 2012; Welz, 2003). This section builds on the previous sections to distinguish the core features of frugal innovations as mentioned in the literature and establish the framework for further conceptualization in the following sections.
2.3.1 Frugal Mindset
As a complex concept, a frugal mindset is strongly linked to the idea of frugality explored in Chapter 2.1, however it is important to provide a brief overview of why frugal innovations are bound to frugality as a mindset for consumers and producer. The mindset of frugality accounts for different environmental complexities and forms of scarcity that benefit from less costly innovations, but manage to deliver higher value than what already exists. Therefore, it can be argued that frugal innovations come from understanding unstated or neglected needs, knowing their problems first hand and ensuring that the product or service are designed to fit the resource- constrained environment in which they function. For this reason, Gupta (2012) calls frugal innovators “empathetic innovators”. Additionally, Soni and Krishnan (2013) suggest that the frugal mindset also illustrates a higher tolerance for risk and uncertainty in creating solutions (as cited in Miller et al., 2012). Such understandings are based on knowledge of the local ecosystem and benefit from feedback. On an individual level, intrinsic and extrinsic motivators that influence decisions along the frugal innovation process may change with time, which makes them difficult to asses. Badhuri and Kumar (2011) suggest that extrinsic motivators such as financial reward often become intrinsic after the innovation is ready for application.
The mindset of frugality may also be responsive to contextual factors, which make it difficult to determine whether mindsets are shaped by the larger social setting or independent of it. For example, a frugal mindset already exists in countries like India, where there is a culture of “jugaad” or the “drive to extract every last drop of value from a purchase” (Leadbeater, 2014, p.14). While this mindset is based on paying low prices due to underlying economic realities like affordability, it emphasizes the need to husband resources and use products without waste, which implies constant reinvention through reparations and recombination. In India, this mindset of frugality amongst innovators may be a response to local conditions of resource constraints rather than a personal preference for frugality. In the same way, a frugal mindset amongst customers is also necessary for an innovation’s success. Frugal innovations in India may not always meet the same success elsewhere due to different resource endowments and thus must be contextually relevant to its local environment.
A telling example lies in Tata Nano’s failure in the Indian market as early models of “the world’s cheapest car” burst into flames (The Economist, 2015). The unsuccessful launch is explained by this misunderstanding of income classes and their preferences for frugality. Those people who cannot afford electricity are likely to receive higher utility from a non- electric refrigerator than those consumers who are aspiring to own a car. These people choose not to buy a seemingly “lower end” product because it is contrary to class perceptions of a higher social and economic status even if it is frugal (The Guardian, 2014). Thus, in such circumstances the frugal value from usage must remain complementary to the value derived from other factors such as the effect of the product on perceived social status and a mismatch appeared to exist between customer orientations toward frugality and producer expectations.
Navi (2015) likens a frugal mindset to a mental model, in which he states that “if your staff are not trained and incentive, you can have it (a frugal mindset) for a while” but people will “go back to doing things the way they were before” (The Hindu Business Line, 2015). Following from this, cultures and institutions may condition frugal behavior through socialization, power relationships and incentivization that creates a positive reinforcement for frugality (Hall and Soskice, 2005). Navi (2015) makes an important point with respect to the embeddedness of frugality in a mindset, rather than just a response to resource constraints. Building on the embeddedness of frugality in mindsets, March and Olsen (1989) (as cited in Hall and Soskice, 2001) posit that they may be influenced by a set of expected behaviors, rooted in a deep sense of common knowledge that is bound to a shared history, that becomes a culture. In turn, the propensity for a shared culture is characterized by traditions, norms, social networks and collective learning processes that influence wider public perceptions as they evolve into social movements. Rao (1998) shows how political movements shape cultural values and socioeconomic systems once they start being legitimized by public opinion.
This culture may also frame a social value-system that prioritizes the virtues of frugality within individuals, as may be seen in a social-consciousness that actively displays preference for frugality when less frugal alternatives also exist and may be consumed. Radjou and Prabhu (2015) explain this preference through citing a move from “value-conscious” to “values-conscious” consumers, where surveys show a willingness to substitute old consumption choices for more social and environmentally sustainable brands. Furthermore, Egal at al (2010 as cited in Fraunhofer ISI and Nesta, 2016) suggest that consumers in developed markets are developing a “new frugality” that acknowledges the value in purchasing products that are sustainable along economic and ecological dimensions. In Europe, the Circular Economy, a form of “cradle to cradle” production that aims at full recyclability of products, has been adopted as a strategy aimed at reducing the pressure on limited natural resources and extending the value from inputs such as time and energy (Kimivaa et al., 2015). With key implications on efficiency in ecological and economic areas, movements such as the circular economy are rooted in frugality as a choice by both consumers and producers. The progress of these movements imply that users must also adopt the mindset of frugality in their consumption decisions.
2.3.2 Novelty
Moving to a less complex and more observable feature of frugal innovation, the idea of innovations imply novelty in terms of application, process, material or technology but are not necessarily restricted to any one feature. An important part of frugal innovations is their ability to provide relatively higher value than existing solutions in the same environment. While not restricted to being radically novel, the feature of novelty refers to some added- value that is not achieved through existing solutions; thus accounting for relevance within user-contexts. To add value, whether relevant in technical or market contexts, they offer either “new for less” or the “same for less” along some dimension (Zeschky et al., 2014).
2.3.3 Resource-constraints
As a means to “do more with less” for more people, the dimension of resource-constraints in frugal innovations is inextricably linked to frugality as already established in Section 2.1. Based on the fact that natural resources are scarce and populations are faced with limited resourced in skill, funding and knowledge, the concept of frugal innovation is based on making minimum use of materials and promote efficiency and affordability for those on limited income budgets. Furthermore, frugality does not imply just reducing costs but also designing and recombining a product for it to operate with high functionality but fewer resources. This suggests a difference between induced constraints that may be imposed on corporate innovation processes to cut costs, and naturally resource constrained environments, as seen in rural communities. Thus, without the existence of resource-constraints, frugal innovations as a means for “doing more with less” is difficult to differentiate from traditional models of innovation.
2.3.4 Affordability
As mentioned in the previous sections, the dimension of affordability in frugal innovations is strongly related to the customer perception of a reduction in the “total cost of ownership” as opposed to simply cost cutting measures or compromises on quality (Weyrauch and Herstatt, 2016). This is because a more affordable innovation is one that is expected to add value for customers beyond just the immediate future, rather than provide a “jugaad-based” solution that is just good enough. The idea of adding value goes beyond low cost, and means that products or services must also have complementary solutions and infrastructure that make it relevant for users (Bhatti, 2012). With no specific boundaries on what a frugal innovation is, they could account for any range of activities that aim to provide better solutions than existing ones across technological, social or institutional areas (Bhatti, 2012).
The context for affordability clearly differs when considering different situations and income levels, however taking the contextual fluidities of frugal innovations into consideration draws attention to the significance of relevance as a core feature of the concept. The concept of relevance aims to address “local needs in terms of price and function”, it is closely tied to the dimension of affordability and will be considered in tandem with it in this study (Weyrach and Herstatt, 2016).
2.3.5 Scalability
In market settings, an innovation gains traction from its ability to be profitable and commercialized. While most frugal innovations serve niche markets and target populations, this thesis considers their ability to scale as a determinant of their success. Without scalability, the lines between frugal innovations and charity-based products and services are blurred. If not scalable, innovations are restricted to local settings where their impact cannot be gauged or do not achieve self-sustainability to create long term value for society.
That said, this study recognizes that many bottom-up frugal innovations do not have access to the same resources as firms and most often are scalable through support from external institutions. Due to the novelty of the innovation, most often a market does not exist yet and in order to create it, the role of funding is key. With constrained budgets faced by innovators, institutions are crucial in offering support in the form of funding, mentorship, IP Rights and are supported by macroeconomic policies. Most often, during its early stages, the innovation is financed by the innovator’s network of friends and family. The advantage of such is the flexibility of repayment, however, large scale commercialization may need to fulfill the preference of different consumer groups that require institutional help (Kumar and Bhaduri, 2014).
Gupta (2013) argues that the commercialization of frugal innovations enhances knowledge sharing through scalability and must be encouraged by creative partnerships with universities and institutions. Such an institution was conceived in 1997 as a means to scale-up frugal innovations through market research and funding (GIAN 2008a). Thus, institutional support appears plays a significant role in the scalability for bottom-up innovations, whereas corporate frugal innovations rely on adoptions by existing and new consumers and are able to leverage slack resources to enable scalability of their products. Another factor that determines the scalability of products is in their relevance to local environments (Immelt et al., 2009). The need for sustainability in generating financial returns to achieve long term scalability of both frugal innovations is significant and increasingly relevant today.
2.3.6 Sustainability
Extending sustainability beyond financial sustainability for individuals or firms, the overarching notion of frugal innovation as a mindset is strongly tied to the need to “do more with less for more people” in consideration for future benefit rather than reckless resource- consumption and waste. Similarly, the definition of sustainability as that which is “committed to meet the needs of the present without compromising the ability of future generations to meet their own needs” is critical for environmental longevity as well (WCED, 1987, p.3). Yet, economic growth is structured around “doing more for more people” while simultaneously trying to balance scarcity of resources.
Over the last century, innovation in the developed world has been framed by the culture and economic mindset of capitalism, as a way of improving the features and functionality of products and services, in order to justify higher prices through research and development (Leadbeater, 2014). This model of growth dictates economic prosperity and cannot exclude developing economies who are aspiring to “catch up” with developed economies but it also cannot sustain growth the way it has taken place since the Industrial Revolution. It also suggests a deeper cultural disposition related to consumption and a post-Industrial Revolution mindset of production, profit and technological progress without much concern for sustainability5. Added to this, Credit Suisse’s Global Wealth Report indicates that half the world’s wealth is owned by 1% of the global population, thus suggesting that recessionary pressures, income inequality and poverty is on the rise in most developed economies (Kersley and Stierli, 2015, OECD, 2008). An example lies in the case of incomes for male unskilled workers in the US, which have not risen in line with inflation in over a decade (Leadbeater 2014, p.26).
Viewed in conjunction with global interdependence, resource constraints and the fact that the world population is projected to rise by more than 30% by 2050, there is a strong argument for the fact that innovation requires a new cultural mindset aimed at “doing more with less” rather than the post-industrial economic mindset associated with capitalism6. London and Hart (2004) believe that the potential in creative destruction lies in the bottom of the pyramid of both developed and developing markets. Here, sustainability-informed innovations that serve this segment can counter current challenges without depleting existing resources excessively. This awareness is not limited to governments and transnational organizations, but is being adopted by the business world as well. Paul Polman, CEO of Unilever, has speculated that by 2030, human beings will require two planets to provide the resources needed to meet current consumption trends and waste absorption (Radjou and Prabhu, 2014). Modern day frugal innovations in developed markets such as the USA are emphasizing the core element of sustainability in design, as seen through academic research and innovation hubs in Santa Clara University’s Frugal Innovation Lab, Archeworks, MIT’s D-Lab, Nesta.
Mary Midgely (2003) traces this mindset further back to the Enlightenment and its emphasized separation of the mind and body, of man and nature, of subject and object, to illustrate our attitude towards nature as a resource for personal use. Schumacer (1973) points out that an important element of innovation, is that it must be global in its methods, and aim to be “cheap enough so that they are accessible to anyone” (p.20). and even along policy levels like the Obama Government’s Office of Social Innovation and Civic Participation.
Michiel Schwarz and Joost Elffers (2010) call this mindset of frugality “sustainism”, where understanding the creative nature of constraints and sharing knowledge, is vital to moving from a culture of “make something new” to “make things last”. The example of IKEA’s successful do-it-yourself furniture model in Sweden is another example of sustainable frugal innovation, while the modern day Maker Movement enables customers to design solutions to their own problems in spaces such as “FabLabs” and “Techshops”. In other areas of the developed world are very profitable business models have leveraged spare assets and “free information” to generate new sources of income through the sharing economy. By using the digital space as a platform for information-sharing, these businesses have successfully innovated to make novel, accessible, relevant and affordable solutions in areas of lifestyle (e.g.Airbnb), transport (e.g BlaBlaCar) and crowd-funding (e.g. Kickstarter).
The need for sustainable solutions in developed markets is evident as they experience slow economic growth fueled by recessionary pressures and lower purchasing power, aging societies and high resource constraints (Bound and Thornton, 2012). Coupled with growth in technology-enabled solutions and new “knowledge economies” via open-source information, there is ample room for doing better with less for more people (Welz, 2004). Since frugal innovation is aimed at solving unmet and pressing needs of citizens and is defined as “doing more with less”, the dimension of sustainability is hypothetically built into frugal innovation. It has implications along economic, social and ecological dimensions of society, to which frugal innovation either offers alternatives to existing needs or meets unmet needs. To explore this linkage, the concept of frugal innovation is moved forward to developed markets through building a case-comparison that addresses questions of sustainability, the frugal mindset and how far frugal innovation can do better with less.
The paper uses a multiple case study based approach to juxtapose the institutional frameworks and innovation process of Sugru in India and Mitticool in the U.K. It does this by building on primary and secondary data through interviews, literature reviews and archived data. The idea of using multiple case studies follows the logic that frugal innovation is not an absolute but a relative concept. As a novel concept, this study uses Eisenhardt’s (1989) case- based research approach to inducting concepts through case studies and evaluating logical coherence in the empirical data. The definition of a frugal innovation does not depend on a specific threshold and cannot be measured qualitatively but through its properties of applicability and context specific utility, that provide (higher-value) alternatives to those from other solutions available in the market. For this reason, a multiple case study approach that follows the method of qualitative comparison is best suited for this comparison.
Furthermore, frugal innovations and related concepts remain “ambiguous, fuzzy and even chaotic” and thus would benefit from a qualitative case study aimed at understanding a social phenomenon that remains conceptually undefined by existing literature on the subject (Gummesson, 2008).
3.1 Research Design
An exploratory research design method is used to compare cases of frugal innovation in Europe and India, due to the emerging nature of the topic. Four direct and in-depth personal interviews were possible during the study, even though the geographical distance from the market being researched created coordination barriers in organizing the semi-structured interviews. Thus, as Streb (2010) further suggests, an exploratory research method enhances reliability and validity, without compromising flexibility in the data collection of the subject.
Additionally, the paper used multiple cases, to illustrate a comparison between two cases, in an effort to illustrate several different elements relating to frugal innovation and their respective implications on sustainability in their local settings. The cases have been evaluated based on similarities and situational differences, which account for different sociopolitical, economic and institutional contexts in the U.K and India. In this sense, a comparison that highlights similarities and differences in mindset, features, processes and institutional frameworks of frugal innovations in distinct market settings, makes the results more powerful and reliable (Chmilar, 2010).
Corporations and particularly multinationals are most commonly driven by profit, revenues and market shares. A brief contrast between the institutional frameworks of bottom-up innovation highlights the role of “frugality” as a mindset in the process of “frugal innovation”. Two cases have been selected based on shared dimensions as innovations that have come from the grassroots but are referred to as “bottom up” frugal innovations, in order to evaluate the role of sustainability and the impact of these innovations along economic, social and ecological dimensions in their respective contexts. The logic of this method is based on the idea that “sustainability-informed motivations” are “at least a weak condition to consider process innovation as genuinely frugal” regardless of its source, process or outcome (Fraunhofer ISI and Nesta, 2016, p.7). Furthermore, the paper has focused on matching product-based innovations rather than service-based innovations, due to a lack of research material on the latter in India and a very stark difference in the nature of services in developed and developing countries.
As a concept frugal innovation is based on the ideas of “meeting basic needs” and “resource constrained environments”. Both concepts have been applied to “bottom-of-the pyramid” populations in developing economies, but are less specifically defined and remain understudied in the European context. Thus, it is important to consider that frugal solutions in developed markets may not meet all the criteria outlined in the literature on frugal innovations in developing markets. The cases used are similar as technological or material innovations, however providing a juxtaposition between developed and developing market innovations, aims to highlight those aspects of frugal innovation that have not been raised fully in the literature and are not comparable to developing market initiatives on several levels. The aim of this design is to add something novel to the understanding of frugal innovations, their contextual settings and to evaluate their impact on along the ecological, economic and social dimensions of sustainability.
3.2 Data Collection
For a broad overview of the context of frugal innovation and related concepts, several sources were used to collect the data on these cases. In order to provide a wholesome conceptual analysis of theoretical questions on the phenomenon, most of the data was gathered from secondary sources such as books, journals, articles, blogs and multimedia content that was available online. The method for gathering secondary data was through using keywords in online search engines and major journals that were selected according to relevance and credibility. Using secondary and primary source data, and combing theoretical and empirical approaches intends intends to enhance the validity and generalizability of the research question (Rasmessen, 2008).
3.2.1 Primary Source Data
Since the research is being conducted at a geographical distance from the observed phenomenon in both India and Europe, the primary data takes the form of direct information from websites and articles by innovators, online interviews and talks, four unstructured interviews to enhance the validity of the study.
The data collected through semi-structured interviews followed an interview guide that aimed to allow for the generation of reliable and comparable qualitative data while leaving the conversation open-ended to reduce the effects of ecological invalidity or interviewer bias. This was done with the aim of allowing new ideas, and to gather information about how different innovators or enablers interpret the process of innovation, where it comes from and the factors that influence it. The conversations allowed interviewees to explain their work, motivations and experience on the matter. Two of these conversations took place separately through online video call with Mansukhbhai Prajapati, the creator of Mitticool, and Anil Kumar Gupta, Executive Vice Chair of the National Innovation Foundation and scholar on grassroots innovations, as well as founder of the Honey Bee Network.
With the Internet, open source data and knowledge platforms have allowed access to data at no cost except time (Rasmussen, 2008). Information was obtained through studying the websites of the innovation cases in order to extract information on their innovation process and their motivations. As managers of these sites, the data arguably comes directly from the innovators.In particular reference to Sugru, the website provides an archive of information on the innovation process, the story, questions about the product’s sustainability and is a virtual community that exchanges knowledge on Sugru’s applications. More specifically, Sugru’s inventor, Jane has given several article interviews on blogs and websites such as lifehacker.com, speaking about the product and its usability. She also made a talk available on her patenting process available on the UK government’s IP website, and another on the story behind Sugru at TEDx Dublin called “Can We All Be Fixers?”. She accounts for her her personal journey and the barriers along the innovation process called “The Magic is in the Process” at a conference on design called 99U. Additionally, Mansukhbhai, the innovator of Mitticool also gives an online talk in a TED Talent Search event in India.
3.2.2 Secondary Source Data
The selection of literature for this study was based on a systematic method of identifying cases that are either claimed as frugal innovations or similar concepts in social innovation, given the ambiguity of a theoretically embedded definition on the concept (Bhatti and Ventresca, 2013).
Journal Articles
Through using “frugal innovation” as a search word on the databases of SSRN (Social Science Research Network), Google Scholar and EBSCO, all articles were downloaded onto a folder and any overlaps removed. Furthermore, existing articles were cross referenced and additional articles were found through using these keywords in journals that are cited as relevant authorities in the fields of social sciences and business, according to the rankings provided by the SOM Research Institute. The abstracts were scanned for relevant or explicit references to a table of keywords relating to “frugal innovation” and these were selected and downloaded into a temporary folder.
Since frugal innovation does not have clear conceptual boundaries, the theoretical implications of the concept are still being explored. This leaves broad generalizations and overlapping areas with similar concepts like “Inclusive Innovation”, which also suggests that an innovation could be anything that enables community advancement (Radjou et al., 2012). Thus, the methodology applied to this study uses similar keywords in this larger category of “Social Innovation” in order to evaluate implications that the literature on frugal innovation may not have included. After identifying the most frequently used keywords, any publications that did not include the keywords “Frugal Innovation”, “Inclusive Innovation”, “Jugaad”, “Reverse Innovation”, “Grassroots Innovation”, “Sustainable Innovation” and “Resource Constraints” were removed. This is because these keywords were had the highest citations in literature and showed the strongest overlap with theories on frugal innovation.
Books and Reports
Building on the literature from academic articles, the study extended its references to books by key authorities, policy reports by sustainable organizations and non-academic articles in order to take a holistic approach to the conceptualization and relevance of the “frugal innovation” today. Through identifying academic authorities and key research institutions associated with the subject, a number of book chapters and reports were downloaded and scanned. Key authors in the process include C.K Prahalad (2004), Henry Chesborough (2006), Vijay Govindarajan (2012), E.F Schumacer (1973), Navi Radjou (2015), Jaideep Prabhu (2015), Charles Leadbeater (2014) and Anil Gupta (2016).
Additionally, after identifying key online magazines such as The Economist, Harvard Business Review, Fortune, as well as online blogs, all articles containing the aforementioned keywords were downloaded. Further information was obtained from media outlets such as the New York Times on Sugru, the Hindustan Times and the Economic Times of India on Mitticool. The National Innovation Foundation also awarded Mansukhbhai for his innovation in 2009, and has archived part of his innovation process online including the price of the innovation and information about his patent. The Grassroots Innovation Augmentation Network and the Honey Bee Network have also published case studies on Mitticool, while Nesta has created a case study for Sugru online.
Videos
Since visual data can be seen as a means of adding knowledge on the innovation process and innovators and given restricted geographical access to the innovators, video material was also taken into consideration for this study. As Pink (2006) explains, visual data is subject to research biases, which were considered while analyzing the data. The emerging nature of this field in academic study, alongside the fact that it carries a strong message for existing traditional innovation, means that video recorded talks and documentaries are used for inspirational purposes and virility. The videos included content from TED talks, by the by scholars, Navi Radjou and Vijay Govindarajan. Documentaries included BBC iPlayer’s “Frugal Innovation” and a longitudinal documentary by Amit Virmani (2012) called “Mentrual Man”, which provides the context for the production of low cost sanitary napkin production machine, which scaled from the grassroots in India.
3.3 Criteria for Case Selection and Evaluation
The selection of cases for this study was based on a systematic method similar to that used in identifying relevant journal articles. After selecting the relevant secondary source data, the information was collected by listing all cases mentioned in social innovation literature on frugal innovation and similar concepts, as well as through searching 19 online organizational webpages11. The cases were then categorized under those in developing and developed
economies, and tabulated according to the case name, frequency of citations, problem being addressed, age of innovation, and core dimensions in areas like “origin”, affordability, “innovation source” (e.g. grass root), innovation type (e.g. product or service), and scalability (e.g. commercialization). Based on these criteria and the availability of secondary and primary source data, two cases from India and two cases from Europe were selected for comparison.
The study considers the two extreme categories of bottom-up or grassroots-based innovation and top-down corporate innovations as defined by literature, to be on two different ends of the spectrum in the overarching notion of frugal innovation. These categories are considered in the context of criteria relevant to emerging market conditions, business orientation, motivations for actors, innovation processes, or then as a sub area of reverse innovation. However, the literature ignores aspects of frugal innovation such as ecological and social sustainability in resource efficiency within the different market contexts of developed and developing markets. In order to enable a strong comparison in a field where there is no single threshold for the context specific utility derived from frugal innovations, this comparison aims to highlight the different implications of bottom-up innovations in developing and developed economies along three core dimensions concerning implications on the triple- bottom line: social, economic and ecological. The study focuses on bottom up innovations as representations of frugal innovations that are born from within the environmental constraints of the users they are developed for based on the assumption that resource constraints in such conditions are likely to be higher than in the case of corporate based frugal innovations. Additionally, as representations of civilian or grassroots networks, bottom-up frugal innovations are unique in their ability to express solutions to problems that affect consumers directly rather than from a distance, as in the case of corporate institutions.
By matching cases in Europe and India, a qualitative comparison of different institutional, sociopolitical and cultural environments, and a more robust evaluation of the implications of frugal innovations in the aforementioned areas is possible. This includes comparisons between the roles institutions and policy in these areas, and environmental factors that are driving the innovation process (e.g. resource constraints).
There is not much attention given to the mindset underlying frugality for innovators, users and their differences in different contextual settings, thus this study addresses that gap and assesses the respective motivations guiding innovators. The first section lays out three contextual categories that qualify these innovations as frugal, namely novelty, resource- constraints, affordability, scalability, the frugal mindset and sustainability. The formation of these categories is meant to be broad enough to encompass the core features of frugal innovation while being narrow enough to be applied to different contextual settings. The selection was based on comparing core features of frugal innovation, as defined by the literature12, with the different contextual settings. Part of this evaluation was also informed by the different institutional frameworks of two resource-constrained settings, and their roles in informing the innovations’ scalability. This was done in order to summarize where each innovation comes from, who it serves and why it diffused.
After establishing frugal innovations in their local context, it compares the mindsets driving frugal innovations in each empirical context by studying innovations driven by pro-social factors such as awareness of macroeconomic issues, legitimacy and values, as well as pro-self factors such as profit and prestige. This method of comparison is used to evaluate similarities and differences in the socioeconomic and situational factors that influence the innovators’ mindsets.
Furthermore, in this study’s focus on the implications of frugal innovations on society rather than the individual innovator, it aims to assess the creation of value for society as a whole. It follows the generally accepted idea of the need for sustainability as a means of contributing to short and long run value creation through “the development and well being of human needs and institutions while respecting the worlds’ natural resources and regenerative capacity” (Yoon and Tello, 2009, p.88).
In order to gauge the capacity of local frugal innovations in promoting sustainability beyond financial sustainability, the concept is broken into the dimensions of social, economic and ecological impacts. With no generally accepted measurement of sustainability, this method aims to assess the impact of frugal innovations in their local contexts. Although these implications of the assessment may not be generalizable to other frugal innovations in different settings, the three dimensions used are relevant and common to societies in all market settings and are thus considered indicators of sustainable value creation. The dimensions include social welfare through community enhancement and standard of living, economic sustainability through cost minimization and inclusion, and the need for ecologically friendly consumption patterns given dire environmental conditions.
Since it is difficult to measure each dimension fully and without reducing the definitions of sustainability and frugality, the paper uses the United Nations Sustainability Development Goals of 2015 as a reference point in the comparison along the three dimensions in each market setting13. Equal weightage for each indicator is assumed and the indicators have been selected by cross comparing them to the core features of frugality as suggested above.
The two cases were further matched with respect to core dimensions relevant to the triple bottom line of economy, social and ecological impacts, which will be discussed towards the end of the study. Part of the selection criteria for India’s grassroots innovation was that Mitticool has been cited frequently in the literature and there is no dearth of accessible primary and secondary data for analysi77s. The European case, Sugru, was matched with Mitticool based on similarities in areas like innovation type, innovation source and motivation, and scalability through commercialization. Sugru was then matched based on finding categorical matches in areas like innovation type, innovation source and motivation, and scalability, with differences in the origin, problem being addressed and innovation source.
Due to the absence of concrete criteria in defining frugal innovations and that the frugality of (innovations) depends on what alternatives are available in the market as a point of reference, frugal innovation is a relative concept. Thus, while the criteria for defining frugal innovations is important and it has received attention in the literature, the boundaries of its definition are insufficient and still remain open to interpretation. Therefore, the study focuses on the core features of frugal solutions and instead builds a comparison through an overarching framework of reference aimed at highlighting differences in the context of these innovations through considering similarities and differences in frugal environments, their functions and their utility through a qualitative study rather than a “measurement” that responds to these conditions. With fewer mentions and studies than Indian cases, the case of Sugru is based essentially on online media content such as interviews and talks, innovator’s blogs, articles and Nesta’s database for frugal innovation.
Given broad contextual differences, each case shared similarities along three key parts of their innovation process. These elements include the period before the innovation, in which the innovators acquired knowledge and skills that would later be used in their idea. Another key element is the lengthy time between the conception of their ideas and their development of each innovation, and key turning points in each story that involved the entrance of an external institution to help commercialize their ideas and create confidence about the potential scalability of their innovations. For this reason, each case is presented in an order that depicts these key elements in the innovator’s journey.
4.1 Mitticool in India
As a fertile ground for both innovation and consumption, India is a forerunner in emerging markets, with 18% percent of the world’s population and a growing middle class. The sociocultural value set amongst many Indians is conducive to frugality, as it favors “design features which avoid excessive or unjustified economic rents” while “enabling technological innovation and diffusion” (Quitzow, 2015, p.236 as cited in Tiwari et al., 2016). Additionally, India is unique in its cultural disposition towards a “jugaad” mindset, where constraints are not seen as restrictions but as opportunities necessary for facilitating frugal innovations (Randjou et al, 2012). However, infrastructure remains poor and the Gross National Income is still below the average of lower income countries, with 21.9% of the population living below the national poverty line as outlined by The World Bank (2015). Therefore, frugal innovation has a double edged benefit for India.
4.1.1 Institutional Framework
India’s National Innovation System is founded upon creating new business models, but it is oriented towards “short term profits, and promotes jugaad innovations rather than invest in R&D” (Boillot, 2013 as cited in Micaelli et al., 2016, p.14). Tiwari et al (2016) state that 18% of the literature on frugal innovations cite “India” as a keyword, however the concept of sustainability is still young in the emerging economy, and value-creation beyond a “quick fix” or “jugaad” is essential for a sustainable future. Thus, it is no surprise that the rhetoric in public and private institutions is increasingly geared towards creating an innovative ecosystem through providing organizational support and investments in an area where institutional voids contribute to unmet needs and unclear boundaries between informal and formal businesses (Bhatti and Ventresca, 2013).
India’s public orientation toward frugality exists in certain areas like R&D, where its R&D expenditure is still under 1% despite a 2% target by 2007 (World Bank, 2015). An example is evident in the Indian Space Research Organization’s recent launch of a Mars orbiter at one- tenth of the cost of NASA’s missions (Hindustan Times, 2013). This included cost-cutting by using indigenous composites for the probe and rocket, lean manufacturing and development through time constraints, and far lower spending on salaries than at NASA or the European Space Agency. However, economic metrics miss the potential of frugal innovation in India, where local innovators are filling institutional voids on their own. Apart from Indian CSIR labs that conduct applied research and application for poorer social segments, most Indian universities invest very little in R&D (Nature Index, 2014). With high rates of poverty and dis-inclusion in the market, civilians in local contexts are neglected in terms of education and healthcare as well. Furthermore, many local innovators such as farmers, are often robbed of the knowledge they have spent their lives acquiring without any accountability for those taking their knowledge and translating it into other languages (Gupta, personal communication, October 4th 2016).
A mix of factors arguably further India’s disposition towards frugal innovation, including deep technical talent, a growing middle class, low purchasing power and progressive businesses. Through building its affinity for recombining existing solutions and local materials for resource efficient innovations, India’s competitive position in the global market may be enhanced while tackling societal challenges such as poverty and serving a “new middle class” rather than excluding them from existing market opportunities (Micaelli et al., 2016). Moreover, with the 21st Century announced as the “Decade of Innovation” by the the Five Year Planning Commission (Indian Express, 2012), there is heavy focus on sustainability, economic growth and technology in India. Thus, support from public policy becomes crucial in areas like Intellectual Property, Research and Development and training frugal innovators to develop and test their products. Institutions like the Honey Bee Network, the National Innovation Foundation and the Grassroots Augmentation Network15 are steps in this direction and receive public support. Furthermore, several government policies are attempting to create dispersed innovation clusters rather than urban concentrations in big cities like Dehli and Pune. These include the National Innovation Council’s plan to foster 20 traditional craft clusters, setting up the National Innovation Network which will use fiber optic networks to facilitate collaboration between top research institutions in different locations, and developing state Science and Technology Councils to aid innovation. The results of these initiatives are yet to be seen, however growing support for frugal innovations from policymakers is evident.
When compared to Europe, India also has a more flexible regulatory environment with respect to compliance and standards like ecological standards. In some respects, this creates hurdles with respect to resources that support the development of frugal innovations, as in the case of India’s patent system. Intellectual Property Right protection laws in India make frugal innovations difficult to patent, as any innovation becomes non-patentable within a year of entering the public domain. Long patent times and communication make it difficult to balance secrecy with people-to-people networking in environments with very high information asymmetry16. Furthermore, frugal innovations are usually adapted to the context in which they are demanded, thus creating difficulties in defining how to interpret their novelty (Bound and Thornton, 2012). However, as with institutional voids, less regulation means that “compliance costs” are less of a barrier to developing innovations that may reach the market such as market entry and price (Carlin and Soskice, 2006).
4.1.2 Institutional Support
Founder of the Honey Bee Network, Anil Kumar Gupta made the first attempt to fill the high institutional gap between bottom-up innovators and market inclusion, and to address the potential lying in the segments of the population that had been ignored. In the 1980’s, the Honey Bee Network was set up as an attempt to reduce existing constraints and encourage co-creation amongst local innovators like farmers, carpenters and artisans. Through collecting knowledge from innovators and sharing any benefit that comes through them, the Honey Bee Network pools solutions amongst people and enables them to have IP rights when their knowledge is applied. An international NGO, the Society for Research and Initiatives for Sustainable Technologies and Institutions was also set up to support data collection on innovations and now helps stimulate reward-programs amongst local universities in Gujarat and Rajhastan. The programs aim to scout innovation through a land-to-lab-to-land approach rather than a lab-to-land (Gupta, personal communication, October 4th 2016). A local network of partnerships assists this approach through allowing collaboration, research and development, and diffusion of innovations. This leads to an institutional network effect that helps in the process of commercialization through knowledge sharing, and allows collaborators to share in any profits generated from innovators. Partners include Gujarat Information asymmetry refers to an economic term of imbalance between those who can use information and those who produce information. Agricultural University, Jai Research Foundation, Indian Institute of Science Bangalore and MS University Baroda.
However, as a lone operator in this framework, much may be done to improve the efficiency of knowledge dispersal which usually is collected through organizing walks or “shodhyartas” across more than 2000 rural villages in India (Gupta, 2016). With the absence of Venture Capital Funds in India and a highly risky rate of return, the funding space for small ventures is limited to grants from external organizations like the International Development Research Centre. Also, very limited access to technology exists amongst marginalized societies.
Inspired by the Honey Bee Network’s philosophy and recognizing a gap in policy and institutional support, the NIF was founded in 2000 as part of the Indian Government’s Department of Science and Technology and is sustained by the country’s national budget. In this ecosystem the NIF founded in 2000 with the aim to scout technological innovation in local, resource constrained environments and without external support (NIF, 2014a), and the Grassroots Innovation Augmentation Network, institutionalized in 2003, intended to support innovators in funding, design and market entry through scaling their products and services (GIAN, 2008a). Through collaboration with the Honey Bee Network, the NIF has a database of over 225,000 technological innovation ideas from over 585 districts, and has rewarded 815 local innovators (NIF, 2017).
Further collaboration with Massachusetts Institute of Technology has led to stronger product development and research through setting up a Fabrication Laboratory. The NIF has also attempted to support patent registrations through setting up pro bono arrangements with local firms and the setup of the first Micro Venture Fund at NIF. With a single signature, the fund attempts to reduce red tape and invest in highly risky innovations that have no established market, unlike traditional microfinance. Apart from financial viability, a key criterion for selection is whether the technology supports social value creation at large. Gupta (2016) says that a barrier to servicing loans is in the fact that they cannot be monitored but still have an 80% collection rate. At present, the fund is limited about 0.5 million USD and has undertaken first phase of funding for 193 projects but has no recorded second-stage funding (NIF, 2017).
Apart from local institutional support, India is attracting investment for social impact from both multinationals and philanthropic organizations like the Gates Foundation. Currently seven venture capital funds have raised close to 151 million USD and invested approximately 100 million USD in 72 different social enterprises (Singh et al., 2012). These include the Acumen Fund and Omdiyar Network. This is furthered by the Indian Inclusive Innovation Fund, of which the government is expected to commit 20 million USD to risky capital to meet the gap in funding for early stage ideas (The Guardian, 2013).
There is concerted evidence that the government’s policies to support frugal innovation are entirely successful, however India is at the forefront of frugal innovation. With the existence of institutional gaps but increasing policy attention, the country offers considerable knowledge on the topic of frugality and innovation with a focus on co-creation from the bottom-up. The case of Mitticool was chosen due to its recurrence in literature as a successful social innovation, accessibility to primary data from the innovator, and the fact that it contains key contextual dimensions affecting the triple bottom line in its comparison with the European context. Furthermore, the process of developing Mitticool as a bottom-up frugal innovation involved external institutional support and thus may be considered a good example of successful bottom-up innovations in the absence of institutional support and resource constraints.
4.1.3 Innovation Journey
As the eldest child of a traditional pottery-making family, Mansukhbhai was not motivated to pursue the profession in his early years. Masukhbhai saw his family lose whatever they had when the Macchu Dam broke down in Gujarat in 1979, and although his family encouraged him to finish, he dropped out of school when he failed his 10th Year examination. In order to contribute to the family’s precarious financial situation, Mansukhbhai started working for a tile company but after injuring his eye, he decided to set up his own tea stall in 1984. Six months later, the young man was working in the manufacturing unit of Jugdamba Potteries, another tile company, where he acquired knowledge about the properties materials such as the clay used in pottery, and the technology and skills needed for tile manufacturing, such as using a hand press machine (NIF, 2009).
His knowledge of the technology led him to realize the inefficiency related to producing earthenware in his village. The process involved using a large amount of time to make earthen pans and hot plates by hand, whereas the hand press machine enabled tile manufacturing in large quantities and less manufacturing time. With a curiosity for trying new things and a drive to help people in his village, Mansukhbhai decided to quit his job to experiment with the uses of the hand press machine (Prajapati, personal communication, September 9th 2016). By 1988, the young potter used his community network and approached an informal money lender for a loan of 500 USD, with which he acquired a small piece of land, an electric potter’s wheel, a soil mixing machine, some dyes and hand presses, to set up a small factory (NIF, 2014). In 1989, he was a proprietor who could make up to 50 clay pans a day, which he sold in a container on his bicycle (Mitticool, 2011). He says he was always interested in innovation and helping people, and was always trying new things.
Mansukhbhai collected feedback from his early customers, and realized that the pans could not withstand high heat temperatures when used for cooking. First he tried keeping customers by reducing their price but given continued negative feedback, he started experimenting with the material through trying different proportions, types of clay and mixes (NIF, 2009). These iterations succeeded in improving the product’s quality and by 1989, demand for Mansukhbhai’s clay products increased to the point that he rented an automatic rickshaw to sell products because his bicycle couldn’t carry enough products and he registering his manufacturing plant, Mansukhbhai Raghavbhai Manuskhbhai at DIC, Rajkot (Prajapati, personal communication, September 9th 2016). He received his first bulk order within three years and paid off his loan. Through the virality of word of mouth channels, the quality of Manuskhbhai’s products spread amongst the trading community in Rajkot. In 1995, a trader approached Mansukhbhai on recommendation of his former employer, and asked him to make a water filter within 8 days. The quality of the water filter exceeded his expectations, and the trader paid Mansukhai double his asking price (3.30 USD) for 500 water filters (NIF, 2009).
In 2001, Manukhbhai’s stock was virtually finished as a powerful earthquake shook Gujarat. In a local newspaper called Sandesh, he saw a photo of a broken water filter by him titled “the broken fridge of (the) poor)” (NIF, 2014). He felt a sense of responsibility to help his community and decided that something had to be done (Prajapati, personal communication, September 9th 2016). He thus decided to use his knowledge to “make a fridge out of poverty” out of the resources readily available to him. Mansukhbhai’s logic followed that of Gandhi’s, “earth provides enough to satisfy every man’s need but not every man’s greed” (Prajapati, personal communication, September 9th 2016).
The development and design process of Mansukhbhai’s clay fridges spanned a period of three years, in which he revisited old struggles of finding the right clay mixtures and materials. Following a similar process of user feedback from friends and family and enlisting his wife’s help in sales, by 2005 he had found the right combination of sawdust and sand to make the clay absorbent enough to water that would conduct its cooling properties for refrigeration through attaching water chambers. All materials used in this process were locally sourced (Permaculture News, 2013). In this sense, the institutional absence of sophisticated energy networks and social welfare systems, had mobilized Mansukhbhai to create a radical innovation for his local community but not without further institutional difficulties.
He sold the first version of Mitticool, which could store up to 20 litres of water and 3kg of food for 25 USD (NIF, 2009). However, the development of the product required a loan of 31,670 USD with interest, thus forcing him to sell his home to pay off his debt and in need of further financing (Hindustan Times, 2014). At this point and thanks to a local newspaper, Mansukhbhai was scouted by the Vice Chairman of the NIF, who provided him with a further 3340 USD and business support. Four years later, Mitticool broke even and Manuskhbhai continued receiving external institutional support from GIAN and NIF in the form of product and business development, testing and intellectual property protection (Economic Times, 2012). The institutions further assisted in the value addition, packaging, marketing and networking for the products’ diffusion amongst customers in India (GIAN, 2008). Important parts of this institutional support came in the form of developing a patent application for design even though the mixture of oxidizers and clay was already in use, assistance from Tata Chemicals’ Design Department in facilitating longer preservation of food and from the Industrial Design Centre of IIT Mumbai in enhancing the aesthetic appeal for consumers (Trivedi, 2011). For marketing and sales, in which Mansukhbhai admits great difficulty, GIAN registered a company called “Clay Creation” in 2008, in order to establish sales channels through big outlets (Trivedi, 2011).
Furthermore, GIAN supported the development of online sales channels and involvement in the Traditional Food Festival in Ahmedabad, which inspired new ideas and allowed feedback on Mitticool. In 2009, Mansukbhai was awarded the Technological Innovation and Traditional Knowledge Award by the NIF, after GIAN and NIF were key in providing Mansukhbhai with the resources to test, develop and patent Mitticool. Without the NIF’s loan of 3340 USD, Mansukhbhai was in heavy financial debt (Economic Times, 2012). While GIAN helped Mansukhbhai register a trademark and protect the clay’s unique mixture, it also aided the registration of the “Clay Creation” company and building sales channels at national outlets. Without the assistance of its partners, it seems unlikely that Mitticool would have been able to establish a brand name if the innovator was working alone.
In 2012, Mittcool had a staff of 25 employees and had sold over 3500 refrigerators (SRISTI, 2012). Today, Mansukhbhai’s enterprise uses home appliance companies and an online store across 40 countries, to sell refrigerators that can run for up to 5 days without electricity due to the natural properties of clay (Davidson, 2015). He has expanded his product line to pressure cookers through experimentation and feedback from the network he has built, and is working on creating a clay pan that avoids the risk of health concerns coming from aluminum-based cooking (Prajapti, personal communication, September 9th 2016). He also aspires to build a Mitticool home that will run without electricity. The fact that the entrepreneur recovered his investment and has created an environmentally friendly product that is self-sustainable dispels questions about whether frugal innovations are limited to executions from outside the bottom of the pyramid, but still do not make up for a lack in the literature about the innovation’s sustainability. Additionally, a grass-root innovation like Mitticool, is not as durable as traditional ones in capacity and design, and may be replaced as its customers’ income increases. This however should not negate its position in raising customer living standards and increasing their buying power through affordable inclusion.
4.3 Sugru in the U.K
In Europe, an orientation towards frugality is not new, given Europe’s frugal history in times of war (e.g. Britain’s CC41 clothing scheme). Also present in European cultures are some dispositions toward frugality, as seen in Germany’s Baden-Wûrttemberg region where “tüftein” or “productive tinkering”. This implies that frugal mindsets are not specific to developing markets but seem to occur in response to situations of scarcity, crisis or are embedded in value systems. Whether current market conditions are signaling crises and what exactly crises may be defined as, is beyond the scope of this paper, however, the existence of scarcity and the need to respond to societal challenges like resource scarcity, is clear.
4.3.1 Institutional Framework
Although faced with a different contextual setting than a developing country like India, the occurrence of frugal innovation in developed markets remains understudied and is much less specific in its definition. However, ideas like “meeting basic needs” or “resource constrained environments”, social needs, affordability and sustainability on economic, social and environment levels, are as relevant as the needs for resource conservation and increases in efficiency. As already established in the beginning of this study, global economies are increasingly characterized by low growth, political uncertainty, austerity measures, global resource constraints and environmental concerns (Nesta, 2012, p.16-19). As the effects of recessionary markets endure, consumers continue to show changing spending habits alongside a higher regard for social responsibility (Radjou and Prabhu, 2015; Egal et al, 2010 as cited in Fraunhofer ISI and Nesta, 2012). This means that consumers are also growing aware of the consequences of overconsumption, the need for affordability and reduced waste.
A growing social awareness about the consequences of reckless consumption, production and a preference for spending within personal means are not indicators of dying consumerism, but certainly suggest a growing affinity towards consumer ‘frugality’ in Europe. This is furthered by a focus on durability, sharing economy solutions, circular production principles and Do-It-Yourself ethics through a greater desire for products that can be repaired or recycled. Leo Babuata calls this kind of minimalism “the power of less” (Leadbeater, 2014).
Additionally, given the growth in the population of emerging markets coupled with ageing populations in European markets, European firms display a need for frugal innovation capabilities to remain competitive in producing affordable products and services. For these reasons, policy makers are realizing the need for promoting social and economic inclusion in order to rebalance resource distribution, as well as ecological sustainability in Europe rather than simply taking austerity measures.
Howald et al (2013) highlight the EU’s increasing policy orientation toward innovations that are driven by not just profit generation but that also socially beneficial in their ends and means. Policy support in Europe takes the form of overarching financial and infrastructural assistance as in the case of Tekes in Finland, Nesta in the U.K and the Dutch Good Growth Fund (Granqvist, 2016). However, institutional support for innovations in developed countries seem to have a high priority of meeting demands in developing countries such as India. These include programs like the Dutch Good Growth Fund, BEAM by the Finnish Funding Agency for Innovation and Tekes. Healy (2006 as cited in Granqvist, 2015) highlights the focus of institutions on impacting growth in these countries as an alternative to aid based development and on tapping into their emerging markets rather than focusing on local frugal initiatives.
Furthermore, governments such as the UK, USA, Germany, France and China are focused on partnering with India for research and innovation because of the potential for knowledge sharing, technology adoption and new markets (Bound and Thornton, 2012). Nevertheless, collaborative efforts are not focused entirely on frugal innovation and largely follow a traditional R&D focus rather than along the lines of frugal elements in areas such as energy, healthcare and education.
The European Commission (2015) further outlines the need for financial returns to be balanced or outperformed by returns that create value for society rather than individuals as part of the EU’s 2020 strategy. With this orientation, like India, European policymakers recognize that solving societal challenges can be aligned with economic growth, through inclusivity and efficiency in innovation. Unlike India, policy in Europe is not explicitly geared toward frugal innovation. While there are examples of “frugal thinking” such as efficiency in savings, taxation efforts and such, there is no real innovation coming from institutions for low income consumers. Europe faces its own in promoting this mindset, as seen by high bureaucratic barriers and embedded organizational cultures that are difficult to overcome, a lack of understanding of frugal innovation as a concept and misunderstandings with concepts such as “good enough innovation” or low-cost products that are unappealing to customers, and an underdeveloped ecosystem to support these solutions (Granqvist, 2015; Michaeli et al., 2016). Nevertheless, the European context as a growing ecosystem for frugal innovation provides an important but understudied example of a growing “frugal mindset” in which policy and infrastructure are aiding this growth and civil society is increasingly growing aware of its importance.
4.3.2 Institutional Support
Support from public institutions follow themes in which there are high potentials for profitable success, as shown in the EU’s H2020 strategy. These include new models for healthcare, clean energy and the promotion of circular economy principles given public policy’s orientation towards this area (Granqvist, 2016). With a higher focus on sophisticated technology and digital services, frugal innovation in Europe manifests itself in a different way than that in India. In Europe, frugal innovations are likely to be aimed at sustainability, collaborative consumption following sharing economy principles, where lower income customers are included in certain markets through deriving affordable utility through renting assets rather than buying them.
Moreover, institutional support through funding mechanisms in Europe often exist in the form of venture capital funds and impact investors. In this sense, finance is less risky than in the case of the Inclusive Innovation Funds or the MVIF, where uncertainty is much higher. Yet, given higher accessibility to portfolios and sophisticated technological mechanisms for monitoring and screening processes, the possibility for funding frugal innovations without the influence of a network effect, is arguably more prevalent in Europe than in India. Additionally, low geographical barriers and highly sophisticated technological platforms make funding between countries easier in Europe. That said, there are very few institutions that are explicitly geared towards social impact.
Moving beyond just Europe, institutional support through crowd funding is a new and relevant trend for local innovators all over the world. Crowdfunding requires the creation of simple online profiles that allow innovators to share their stories all over the world and collect finances through civilian donations or in exchange for equity or products. Crowdfunding is a frugal innovation on its own, as it is less costly than most forms of financing, much more efficient and at is possible at relatively negligible transaction costs. Since local frugal innovations in India are not supported by an infrastructure as strong as in Europe, crowdfunding is limited to local networks of family and friends. Unlike other forms of support, crowdfunding in Europe is based on funds and provides no additional support such as mentorship.
Although the geographical make-up of Europe means carrying economic conditions and standards of living, the overarching framework of institutional support is not as distinct as in India. Additionally, since European countries have been highly integrated thus far, treating Europe as one market is reasonable for this study. Amongst the premier institutions that support frugal innovation initiatives within their local contexts are Nesta and the Nordic Frugal Innovation Society. Nesta is an innovation foundation in the UK and supports innovation efforts all over the world, but with a heavy focus on the UK. Similarly, the Nordic Frugal Innovation Society is a non-profit organization registered in Finland. Both organizations are set up as a charity and assist innovators with funding, intellectual property and product development. The nature of both institutions focus on early stage funding and given Europe’s openness towards knowledge sharing platforms, they provide assistance in terms of network and collaborative efforts. Furthermore, the role of institutional support in Europe often comes in the form of academic and research institutions, that enable collaborations in research, experimentation and product development. However, high prices of rent and membership fees may often act as a barrier for local innovators.
As mentioned in the previous chapter, recent examples of frugality in Europe can be seen in the successful development of products such as Renault-Nissan’s Dacia-Logan in Eastern Europe for 6000 USD, that is often seen as the European counterpart of the Tata Nano, and ‘no-frill’ airline operators like Ryan Air and EasyJet. However, although such products are relatively more affordable and socially inclusive than other market solutions, they are arguably unsustainable given their ecological footprints, whereas platform services such as Airbnb or Transferwise can be argued as more ecologically sustainable in their social value- addition, and operatively efficient in their services. For this reason and the fact that the methodology of this paper is based on selecting extreme cases of frugal innovation to reduce complexity, the case study chosen to be examined is that of Sugru, which meets the criteria of ecological, economic and social sustainability while adding the interesting dynamic of a grassroots innovation- based product. Furthermore, the presence of Nesta as an external institution in the successful development of Sugru creates an interesting parallel to Mitticool and its support from India’s NIF.
4.3.3 Innovation Journey
Jane Ni Dhulchaointigh, a 37-year-old designer and entrepreneur, is the daughter of a farmer. She grew up on a family farm in Kilkenny, Ireland where she enjoyed sculpting and where “fixing and making things is just a way of life because there were no shops to go to” (99U, 2013). In 2003, she enrolled in a graduate program in Product Design at the Royal College of Arts in London, where her ambition was to design and develop new, “great products”. During her program, she started bringing home her experiments with materials like clay and silicon sealants and applying them to “broken things” at home. She used the material to stop leaking pipes, for grip on the handles of knives and repairing mug handles (New York Times, 2016).
The idea that it was in fact normal for people to redesign their own things followed the Do-It- Yourself culture that had existed before the ability to replace things almost immediately, and was something that she grew up around in her small and humble hometown. Jane noticed that she was developing an aversion to having to “buy new stuff all the time” and decided she wanted “to improve and re imagine the stuff she already had so it works better”. She “got the sense that people are getting tired of superficial and throwaway relationship with their stuff” and instead felt that there was a need for “the world to get fixing and making again” (TEDxDublin, 2012; Fortune, 2015).
Combined with this feeling and an interest in the creativity that people possess on their own, Jane experimented with materials for a self setting rubber on suggestion of her partner, James Carrigan (Fortune, 2015). Her first experiment was random. It was a combination of silicone and wood, that “looked like wood and bounced like a ping pong ball” (99U, 2013). After building a student prototype, Jane received very positive feedback from the network around her and held onto the idea “that felt bigger than herself” but had no sense of “disrupting an industry” (TEDxDublin, 2012).
After graduating and without a particular use in mind for the material, Jane began the journey of what would accumulate to be 5000 experiments, 8000 laboratory hours and 6 years of continuous user testing in her personal network, approaching scientists for support and knowledge, self-learning and pitching for investment. In 2005, she received a grant from Nesta for 50,000 USD and 50,000 USD in equity investment from a Venture Capital Firm called LaComp, of which about 10,000 USD went towards 3 contract laboratories for conducting material experiments. With no experience in material sciences Jane gathered a team of specialists to further the project. The specialists’ skills ranged from chemistry to business to marketing. Moreover, with the support of Nesta, Jane applied for patents for her first successful chemical formulation.
While struggling with the materials consistency and stickiness, she asked people to send her pictures of their applications, what they would improve and created a story board of these picture. The feedback was similar across the board: “make it stick to more stuff” (Sugru, 2016a). With low finances without a business model, and just her personal credit card, Jane built her own laboratory to make the most efficient use of the limited resources around her. Part of this innovation process involved teaching herself chemistry for 2 years and lean prototyping in her immediate network, through continued testing with family and friends. They enlisted the help of a London-based consultancy, Viadynamics Ltd., in order to help communicate the product’s potential (Fortune, 2015).
In 2006, the team had their first successful chemical formulation and approached multi national corporations in order to build partnerships for growth. The development of partnerships was slow and bureaucratic, and Jane felt resources were being wasted, particularly time. Before the financial recession of 2008, there was also a lower social consciousness about repairing, frugal spending and wastage amongst consumers but she still felt that her idea was big and was more about helping to “fix a broken culture, not just a broken product” (Sugru, 2016a). However, it was a difficult message to convey to investors and funding started drying out. Overcome with inertia, Jane realized the need for building a personal brand when a friend advised her to “start small and make it good” (99U, 2013). She realized the need to communicate the product’s potential for its many different uses and decided to call it “Sugru”, from “sugradh” the Irish word for play.
As the recession hit by May 2008, things did not get easier and the institutional environment for financing was bleak. Jane and her partner, pitched Sugru to nearly 100 investors, and were nearly in overdrafts in their personal financial accounts. By June 2009, Sugru received 150,000 USD in funding by a private investor, which was short of what they needed (New York Times, 2016). Over six months, Jane and her partner bought a small mixer and received assistance from an engineer friend to design a packaging machine for 5000 pounds. Within a month, and with the help of close friends and family, Jane converted her laboratory into a factory and managed to make and pack 1000 packets of Sugru. They used channels like blogs, videos and built a website to give the product attention, and spent no money on anything considered unnecessary.
After reaching out many technology bloggers on social media, Sugru caught the attention of an influential technology blogger at the Daily Telegraph, Harry Wallop, with a sample product, Wallop gave Sugru a very strong review online. The promotion caught the attention of all his readers and the reputable technology websites; Wired and Boing Boing. The product went viral through online channels and word of mouth and within 6 hours, the work of 3 months was sold on the internet. The following day saw 2000 pre-orders sold out in 10 hours.
All the attention, awareness and positive feedback meant that Sugru had an influx of investors and finances to build a team and a factory. While organizing the supply chain, Jane and James went out and met their customers personally. They also reached out to the online community, and within 6 months scaled online sales to 40 countries via shipping partnerships, and Sugru was named as one of the top 50 inventions of 2010 in Time Magazine (Time Magazine, 2010). The team was able to stock Sugru in their first retailer, the London Design Museum, and from 250,000 USD in 2010, sales reached 3.4 million USD by 2014. Through online channels, Jane receives all kinds of feedback, stories, pictures and applications from Sugru’s users. These stories on value creation have ranged from fixing iPhone cables, to waterproofing a camera attached to a helium balloon that has been sent into space, to fixing a wheelchair’s joystick to helping a woman without fingers complete a 700km canoe race through modifying her paddle (Sugru, 2016c). In 2014, Jane was awarded the title of ‘Design Entrepreneur’ at London Design Festival.
Currently, Sugru is sold online in more than 160 countries and through 19 retailers in 6050 stores in 4 countries (New York Times, 2016). The product is highly durable, heat-resistant, waterproof, dries within 24 hours for a rubbery finish, and can be removed without damaging the surface of an item if necessary. While it still has limitations in the form of a 13-month shelf life and can hold weight up to 4 pounds, it is priced at 12 USD for three packets and can bond to almost any solid surface (New York Times, 2016). Jane says “Sugru has always beenabout so much more than itself. We felt strongly that we could help fuel a conversation about why a culture of fixing is important - so we made the Fixer's Manifesto.” (Sugru, 2016a).
Based on novelty and affordability, amongst other core features of frugal innovation, each case is compared in the contextual conditions of its market environment, to determine how the cases qualify as “innovations” by understanding where they come from, who they serve, their process and their diffusion. As bottom-up innovations, the study will focus primarily on the dimensions of novelty, resource-constraints and affordability (which also ties in the feature of relevance) as established features in the existing literature on frugal innovation. Firstly, the literature surrounding this concept as focused on the process and outcomes of frugal innovation under resource constraints or institutional voids, but have neglected the mindset of frugality and its connection to sustainability.
Therefore, this section evaluates the key similarities and differences of frugality as a (2) mindset driving frugal innovation in each context. Secondly, as bottom-up innovations, the study will focus primarily on the dimensions of novelty, resource-constraints and affordability (which also ties in the feature of relevance) as established features in the existing literature on frugal innovation. The core feature of scalability is identified and considered as part of the frugal innovation process in developed and developing country settings and with respect to external institutional support. Finally, the discussion evaluates the role of sustainability within the empirical framework of Sugru and Mitticool, as a necessary (but weak) condition for frugal innovations to be truly frugal. It does this through applying triple bottom line as a proxy for evaluating the implications and capacities of these frugal innovations along economic, social and ecological dimensions of sustainability.
5.1 Frugal Mindset
In comparing the two contexts in which innovation occurs, the mindset of frugality is influenced by frugal heuristics such as knowledge, cognitions, values, emotions and social legitimacy. A frugal mindset is arguably necessary for the innovator and those adopting the innovation. Otherwise, frugal solutions may be used for the short run, but are not embedded mindsets, and are likely to be dispensed of in the long run and without external incentivization. To simplify a complex interplay of factors driving frugality, the study refers to frugality as a mindset that assumes the inclusion of the aforementioned heuristics as drivers in the innovation process and refers to a mindset of frugality the individual applies beyond his or her lifestyle, and extends to society.
Need-Based
India is noted for its “jugaad” mindset, “quick fixes” imply solutions that are just good- enough, and may actually be counterproductive for frugality as they appear to undervalue the role of sustainability in innovation. Manuskhbhai struggled for about four years but refused to compromise on the quality of the product until it proved that it was adding value to society without added-expenses or higher pricing. Although he has accumulated knowledge over years of learning-by-doing, his innovation process involved new, self-taught skills like using the hand press machine to cut costs of production and increase efficiency. To overcome internal challenges and develop a strategy which is absent until the product proves some success, Mansukhbhai’s had to persevre for a long time.
While assisted by external funds, Mitticool was also designed to appeal to its consumers aesthetically. Hence, Mansukhbhai arguably used compassion and empathy to understand the perspective of other customers in designing a simple product that was easy to use. Finally, Mansukhbhai’s knowledge of his local environment and his own experience with financial difficulties enabled him to address the needs of those in a rural setting. Although it took him several iterations, his determination to provide social value to those in his village highlights the significance of empathy and compassion in recognizing these needs. In this sense, his motivation follows an “other oriented” behavior through “a commitment to alleviate others suffering” rather than self- driven goals such as profit (Miller et. al., 2012, p. 627).
This is not to say that the innovator’s goals are susceptible to change over time and may orient to profit, or that compassion in itself is not a self-directed feeling as explained by Adreoni’s (1989) “warm glow effect” (as cited in Miller et. al, 2012). However, Mansukhbhai’s prosocial behavior suggests the presence of compassion as enough of a driver to “consider the suffering of another as a significant part of his or her own scheme of goals and ends” (Nussbaum, 2001, p.319). It also suggests less of an aversion to risk than rational cost-benefit analysis, in which action is warranted if the benefits of personal gains are said to be higher than perceived costs. Part of this risk was in the decision to make clay refrigerators rather than water filters, for which Mansukhbhai had received a large order in 1995. Cognitive processes that lean towards high-risk decisions arguably demonstrate a commitment to alleviate other’s suffering because the innovator’s sense of self identifies with other people, hence delaying attention to higher risks such as financial bankruptcy.
In Mansukhbhai’s case, after quitting work at the factory, he had already started making products for those around him, thus supporting the idea of a strong sense of shared values and culture with his rural community. Furthermore, in the situation where Mansukhbhai had to sell his family home in order to develop his product, there is evidence of increased support for his commitment to alleviate suffering, as he was willing to incur hardship not just for himself but also for his family in this commitment (Hindustan Times, 2014).
This orientation away from the individual or household and towards the community’s unmet needs, cannot be explained wholly by conventional cost benefit analysis, or by emotions such as compassion on its own because emotions are conceptually difficult to capture, explain and are transient. Hence it is necessary that an underlying mindset encompasses emotions and perceptions in a way that allows innovators recognize and formulate potential solutions to meet community problems of unmet needs. Yet, the ability to maintain this mindset and develop solutions is also driven by a nexus of socioeconomic and institutional factors in the macroeconomic sphere, such as the availability of funding that frame such opportunities. Furthermore, the response to these innovations is crucial for their market success and without a customer base, the product is unlikely to be sustainable, thus posing a key question regarding consumer mindsets in the context of frugal innovations.
Since a products’ success depends on the adoption by its users, the consumer mindset is as significant as that of the innovator. Mitticool provides an example where the value proposition of an innovation is aligned with the consumer mindset, however Sugru represents a mindset of frugality amongst consumers as well. Those consumers purchasing Sugru depict a choice of lifestyle that shows a preference of making things last as opposed to buying new things, even though Sugru is considered relatively more expensive than its closest substitutes. While there is no evidence to suggest that those consumers buying Mitticool do not represent a frugal mindset and although it is frugal in its design, it is more affordable than close substitutes and may be purchased due to resource constraints like the absence of electricity, rather than a preference for frugality in design. It follows from this that the perception of frugality differs significantly between differing socioeconomic contexts.
In the example of Mitticool, the average rural customer is likely to be someone who is looking to improve his/her financial and social position by moving out of the “bottom of the economic pyramid” and towards a growing middle class (Gupta, 2016b). Mitticool as a need- based product, has customers that are likely to be purchasing the product out of frugal behavior induced by necessity rather than a preference for frugal products. As income levels rise, it is likely that the same consumers would prefer to purchase a higher-end product without consideration for its resource efficiency. In comparison, customers buying Sugru in other countries have already achieved a certain standard of living with basic needs like electricity being met. Hence, the utility derived from meeting these basic needs is arguably higher in Indian society than in the U.K. where the income class being addressed has already achieved or inherited a certain level of comfort. While this does not imply that customers of Sugru are satisfied with their economic positions or do not struggle to meet needs, Indian society’s level of need appears to be more pressing and widespread on average.
A fundamental difference in the mindsets of the two innovators is evident in the circumstances that triggered their initiatives. Although Mansukhbhai had inadvertently been acquiring knowledge for Mitticcol since 1988 through other jobs, it took a natural disaster to mobilize his work in 2001. The innovator refers to a predisposition towards helping society and building products, yet it was this event coupled with his frustration with existing market failures that triggered Mansukhbhai’s determination and creativity. To him it was clear that institutional voids were not going to be filled and that he had to meet unmet needs that the market had ignored. Furthermore, it enabled him work on an idea that he had apparently just conceived rather than a product he had been considering for some time (Prajapati, personal communication, October 10th 2016).
While, Jane’s initiative was also born from a preexisting desire to create value for society, her motivation to promote a culture of fixing rather than consuming indicates an overarching sense of awareness about scarcity. She embarked on her innovation process after feedback from her immediate network and after experimentation with different materials. While both lacked strategy, Jane was not propelled the clear, pressing need that triggered Mansukhbhai, nor was she thrust forward by a particular event around her. Thus, while Jane’s innovation certainly disrupted the balance of existing market solutions, it was guided by a culture beyond her local market setting and driven by a mindset oriented towards frugality as a societal value. Mansukhbhai also refers to the desire to create ecologically friendly products like non-aluminum pans after the success of Mitticool, however his primary motivation was to respond to unmet local needs where frugality was necessary and thus induced rather than voluntary.
The mindset of both entrepreneurs is characterized by cultural values and norms, such as the Eastern (and Indian) emphasis on community as opposed to the Western orientation towards individualism (Brem and Freitag, 2015). It is difficult to assess this on a fundamental level as it is neither measurable and requires deeper anthropological analysis, however cultural contexts are also changing and evolve with new challenges as seen in Europe’s renewal of frugalism as a culture (Egal et al., 2010 as cited in Fraunhofer ISI and Nesta, 2012). Manuskhbhai and Jane depict mindsets that respond to their local contexts but cannot be reduced to reflections of their local values even though these are likely to have influenced their ideas. In this sense, specific factors like Mansukhbhai’s emphasis on ecological sustainability and Jane’s orientation towards prolonging product lifecycles appear to be more than just responses to local contexts, because they offer something novel to customers. This novelty also enhances the overall value to society when compared to existing solutions and is representative of a social awareness that transcends local contextual factors and frameworks.
Socially Driven
While mindset of frugality may be characterized by an awareness of environmental and social challenges, it cannot be separated from frugal heuristics such as values and culture. Jane’s upbringing took place on a farm where “fixing and making things is just a way of life because there were no shops to go to” (99U, 2013). Although contextual factors appear to frame their mindsets differently, like Mansukhbhai, Jane’s orientation towards frugality may be partly explained by her values and cognitions rather than simply as a response to systemic challenges. In this respect, the role of empathy cannot be disregarded for Jane’s innovation process. Through her own experience at home and through observing those around her, Jane “got the sense that people are getting tired of superficial and throwaway relationship with their stuff” (TEDxDublin, 2012). Yet, unlike Mansukhbhai who identifies with his local community, Jane does not mention a similar kind of “shared identity” in her local context. Perhaps this is due to a higher level of cohesion in local communities where resource constraints are high and there is a shared desire to overcome environmental and social pressures (Millbrath, 2002 as cited in Miller et. al., 2012). Arguably then, then the role of compassion and empathy in Jane’s prosocial orientation appears to be less fully explained than in that of Mansukhbhai’s case.
However, like Mansukhbhai, Jane’s innovation process involved determination, persistence and an effort worth 8 years of work. The personal risk of using her own finances and post- crisis recessionary market conditions, made a successful product launch very uncertain. As drivers in the process, the role of recognition and profit were not apparent until after Sugru was commercialized and with high risk and high uncertainty, Jane’s mindset was clearly driven by a motivation in which conventional cost benefit analysis would indicate high costs. Thus, her mindset may instead be explained by a prosocial cost-benefit analysis in which an over-arching orientation towards creating value for society partly explains Jane’s persistence.
With a market context that is framed by higher regulatory hurdles and a different consumer mindset than in developing markets, the success of a product is arguably constrained by market structures in which the definition of success and scalability are closely related to revenue and profit. This provides support for the idea that strong institutions may actually act as constraining forces for innovation. Thus, in her endeavor to empower people through technology, Jane was operating in an environment framed by formally and informally defined institutions that create moral and practical legitimacy for innovation success. In this sense, the role of legitimacy in Jane’s innovation process is more observable than in Mansukhbhai’s where an informal market setting exists.
Sugru is a response an orientation towards promoting a culture of fixing rather than buying, and while the product is technologically novel, it is not an exception in this cultural framework. Solomon (1998) identified the existence of higher trend towards prioritizing social and financial efficiency amongst businesses and investors. Furthermore, with the effect of resource scarcity and global climate change, the moral legitimacy for sustainable products is gaining traction in popular culture (e.g. The New Heroes television series), social enterprise award programs (e.g. Hult Prize for Social Innovation, Fast Company’s Social Capitalist Award) and New Foundations (e.g. Skoll). Sugru’s award from Nesta is a clear indication of the practical legitimacy as a market opportunity, as it was awarded a grant for $50,000 because of its orientation toward social empowerment. As mentioned earlier, the legitimacy of sustainable innovations may be enhanced by attention given to new trends like the sharing economy, circular production and the do-it-yourself culture which Sugru propels. Since populist opinion is already tainted by disillusionment with the existing status quo, Nicholls (2010, p. 622) calls the effect of moral legitimacy on shaping mindsets and encouraging innovation a “bandwagon effect”. Ergo, it may be argued that Jane’s frugal mindset was enhanced by the effect of social legitimacy on her decision-making process.
While Sugru depicts the mindset of frugality in a different context to Mitticool, the study does not intend to disregard the presence of pro-self motivators for both innovators, where even empathy can arguably be linked to a relieving personal guilt or acquiring social power (McCleveland, 1984 as cited in Miller et. al., 2012). Given the nature of such motivations, cognitions and emotions, it is not possible to capture or assess the degree to which such factors influence the mindsets of innovators. Additionally, the role of profit cannot be dismissed as a factor guiding innovations. This is because the innovation’s success, scalability and impact is dependent on its adoption amongst consumers and as consumers in the developed world differ from those in the developing world, their mindsets do as well. Nevertheless, as long as pro-self motivators like the personal drive for profit or prestige are not conflicting with the creation of social, economic or ecological value for society, there is no reason to believe that they undermine the mindset of frugality.
5.2 Novelty
To qualify Mitticool and Sugru as “innovations”, it is necessary to compare them to solutions that already exist in their respective markets or are used in similar conditions. This is because whether the solution is considered frugal is relative to existing alternatives as a point of reference and in their ability to fulfill user needs. The absence of grid connectivity makes electricity inaccessibly or then too expensive for many people, which means rural populations often go without it. This means that many homes lack refrigerators and cannot store their food items. They also lack storage space in small homes and collect water from communal wells, which also leads to time spent walking collecting water and food. In some cases, such as small fruit vendors, refrigerators may add value to the supply chain by preserving the life of fruits, thus the absence of refrigeration and storage takes away from higher margins and income. Similarly, those who can afford refrigerators end up purchasing higher-end refrigerators, which waste electricity and lead to wastage in the form of landfill.
Although a technological innovation with social value, Sugru offers a solution to a completely different problem. In developed markets, consumers waste time and financial resources in buying new products when their things break. Apart from frustration and wastage, this leads to an inefficient use of these resources and higher consumption levels. In situations where things need to be repaired, users are often excluded from the reparation process and face problems like information asymmetry because they are either not aware of how to fix or reuse products, or then lack the material needed to do so. This also leads exclusion from doing-it-yourself or to spending resources towards hiring extra services like plumbers.
In other circumstances where products are broken or are being recombined for other purposes, materials such as “super glue” are used for fixing. Such materials are not consistent in their durability, nor can they withstand very high temperatures (New York Times, 2016). Sugru has successfully provided a novel solution to this challenge by supplying a novel product that is durable, water and heat resistant, can bond to almost any solid surface and can fix broken things. In both cases, the successful filing of patents emphasizes that novelty of each product in their respective markets. Furthermore, this novelty in technology and material use alongside their successful scalability, indicate that the innovations were able to create or expand a market for their products which did not exist before.
5.3 Resource-constraints
In both cases, technological innovations can arguably be seen as a response to resource constraints. Frugality does not imply just reducing costs but also designing and recombining a product for it to operate with high functionality but fewer resources. However, a key difference between Sugru and Mittcool is in the definition of resource constraints for each market. Mitticool was clearly developed in response to a need and in a market characterized by the absence of funding, technology and materials, disequilibrium of resources existed in the case of Sugru as well. From the project’s beginning, Sugru took 10 years to launch because of difficulty in getting funds.
In the initial experimentation phases and development, the founders had to use their personal finances and networks to make use of limited resources. Mansukhbhai borrowed money from an informal lender to experiment with clay combinations, while Jane built a laboratory on her own because she could not afford to use contract laboratories for material experiments. This included building on her knowledge base through adding new skills and teaching herself chemistry to minimize the cost of research and development. The process was likely to be time intensive and may have meant less efficiency but given financial constraints, Jane had to keep manufacturing and R&D in-house for cost purposes (Business News Daily, 2015). It also meant that Mansukhbhai had to teach himself how to use new machinery like the hand press through independent learning and experimentation. Furthermore, both innovators used lean prototyping methods in their immediate network and iterated based on feedback. For Jane, it was first through her classmates and for Mansukhbhai, it was through his village and family members.
Faced with the recession of 2008 and no personal funds, Jane explains that months were spent searching for investors. Close to Sugru’s launch, Jane and her partner leveraged their personal network to design the packaging machine for Sugru and in packaging the first batch of products. Similarly, Mansukhbhai’s Mitticool started with a team of two, himself and his wife, who handled the initial sales for the refrigerators. In both cases, disequilibrium of resources appears to lead to frugality in how the product is designed and in minimizing its costs. In this disequilibrium and faced with constrained resources, the innovations arguably came from an understanding of the problem that target users faced.
This understanding was based on close proximity to users because as members of the community, the innovators were able to experience the respective problems firsthand and collect feedback from the users who were not essentially economic “consumers” but “co- creators” along the process. By treating their target customers as co-creators facing with the same problem as them, their innovations remained relevant in the market as they continued to improve each product while keeping costs low. For Sugru, the material’s stickiness took months of iteration and improvement, while landing the right clay mixture for Mitticool also took many iterations. It is plausible to suggest that although faced with different constraints in terms of resources, both innovators had an understanding of these constraints and were able to make products that were lasting, novel and relevant, through perceiving the creativity in these constraints.
Nevertheless, a key difference between the two market conditions is in the manifestation of resource constraint and the degree to which it is constraining. In the case of Mitticool, Mansukhbhai was faced with resource constraints that were both situational and personal. These included the availability of knowledge resources, personal financing and access to institutions, whereas Jane’s environment is arguably different. Open source knowledge, computerization and the availability of platforms for learning meant Jane was less constrained in this respect. Though faced a recessionary economic environment, Jane was aware of opportunities by many supporting financial institutions within her environment. Conversely, Mansukhbhai was not aware of institutional support opportunities until GIAN approached him. Moreover, as time progressed, Jane’s situational constraints were partly relieved by technology and access to social media as a platform to drive her innovation. It was through social media that her innovation received its first commercial success. Mansukhbhai relied on word of mouth and local sales channels instead, and thus was far more resource constrained in terms of available technology and platforms for scalability. At a second glance, Manuskhbhai’s village could be seen as more an enabler than a constraint, as he was able to leverage the local network effect to increase his initial user-base and gain feedback directly. Additionally, the existence of fewer regulations than in the U.K and more informal communal structures can arguably also be seen as an enabler in developing Mitticool, offering the innovator more freedom and flexibility than in the case of Sugru.
In both situations, the innovators are able to generate higher business value for their users and society while considering the scarcity of resources in their environments. In comparison to these grassroots examples of resource scarcity; corporates are either faced with a different degree of material and human resource constraints, have a scarcity of customers, are time constrained or then are choosing to innovate frugally by putting constraints on their own available resources. Tata Nano is an example of a different kind of frugal innovation, in which the company had scarcity of customers in lower income segments and thus put constraints on its own production line by creating a car for under 2500 USD. Ironically, the Tata Nano failed to achieve success amongst its lower income target group even though it met its 2500 USD target price (The Guardian, 2014).
5.4 Affordability
Mitticool successfully meets the need of rural customers by supplying clay refrigerators to those who are not connected to the grid or cannot afford to be. In a space where refrigerators are absent for customers who cannot afford them, Mittcool offers a novel product to the market with higher material efficiency than any other alternatives. It’s price also means that it is economically inclusive, at about 25 USD for a refrigerator that can store 20 liters of water and 3kg of food as compared to low-end electrical refrigerators that are nothing short of 75 USD (NIF, 2009). This makes Mitticool frugal from a customer perspective by reducing its overall cost of ownership since it runs without electricity and offering a lower purchase price, without compromising on its functionality as a refrigerator. The core value proposition of Mitticool and its ability to run without electricity does not discount it from urban and developed markets in the rest of the world, in which resource constraints are increasing electricity prices (European Commission, 2012). This scalability may benefit from a rise in consumer awareness about electricity wastage and the possibility of a niche market for more “circular” products, as seen in summer cottages in Europe.
Through user based innovation, Sugru as a technological innovation is not faced the condition of institutional voids as Mitticool, but is arguably responding to a perceived systemic flaw and was developed under conditions of resource constraints. Jane describes her motivation as getting “the world to get fixing again” and incurred 8 years of experimentation, prototyping and frugality in the development process of the world’s first moldable glue (New York Times, 2016). While the product is arguably inclusive in its ends by allowing all users greater functionality and adding value to existing products through fixing, Sugru’s creative applicability means its value can be extended to many different uses. These vary from using Sugru to mend an iPhone cable or a cracked refrigerator, to making gadgets like cameras resistant to drops, to using Sugru in the process of sending a Helium Balloon into space (Sugru, 2016b).
However, a key difference between the two cases is that of financial inclusivity through affordability. This is because Sugru is priced at 12 USD for packet of 3, as compared to a roll of multi-purpose duct tape for 9 USD or 15g of highly adhesive super glue for USD 6 (www.amazon.com). While relatively expensive to its closest substitutes is super glue or duct tape, neither of these products compete with Sugru’s functionality as seen through its ability to pack and stick to almost all solids overnight without compromising the material’s flexibility. This makes it difficult to determine a specific value threshold for Sugru’s price though it is arguably minimalist in its composition. Sugru is the first product of its kind and inadvertently reduces the overall cost of ownership of other products by increasing their lifecycle. Thus, while the moldable glue does not offer a low purchase price relative to its closest substitutes, it arguably reduces the total cost of ownership.
It is important to highlight that the income bracket of average consumers in India and those buying Sugru online and in stores in developed markets are very different. In India, the average rural customer is living on less than 2 USD per day, whereas the average British customer customer is living on over 10 USD per day (World Bank, 2014). While a subjective measure in itself, the income disparity adjusted for purchasing power is clearly highly varied between developed and developing markets. Given higher costs of scalability and a higher propensity of consumption amongst users, it is also important to recognize that if Sugru’s price is too low, it will not achieve scalability and financial sustainability to make an impact in developed market settings. In this sense and adjusting for purchasing power parity, from the customer perspective, affordability is certainly important for frugal innovation but arguably less relevant than other factors in developed market compared to developing market conditions. Furthermore, this difference highlights the fact that frugal innovation is contextually very fluid in two contrasting market settings and while the mindset of frugality may be universal, the innovations are adaptable and must be considered with respect to the context in question.
5.5 Scalability and Institutional Support
The need for external support along the innovation process is evident in both Sugru and Mitticool. Although the innovations faced different policy and institutional environments, neither achieved scalability without support from an external partner. This is not to say that the nature of scalability is the same for each innovation, as Sugru’s scalability has reached a global market and Mitticool reached a national market, but that research institutions, knowledge partnerships and financial assistance entered each innovation process.
Through the NIF and GIAN, Mitticool was able to receive assistance in areas where he lacked knowledge, skills and access to a larger market. This took the form of MVIF’s funding support, GIAN’s patenting assistance, mentorship and a network through which wider experimentation and product development was possible. Similarly, Sugru received support from Nesta through an award of 50,000 USD through the Creative Pioneers program. Nesta provided access to knowledge, expertise, training, and support for Jane, who says that Nesta got involved at a very early stage and helped to make a plan and gather together a team of people who could make this happen (Sugru, 2016a). The award was crucial for starting the business because it was issued gratis and enabled product development that was necessary at the time. Furthermore, it contributed to the building of a network that could assist the innovators in the form of research, patenting, knowledge sharing and experimentation.
However, the turning point for both innovators appears to have occurred at different times. For Mitticool, it appears that a turning point came when Dr. Anil Gupta scouted Manuskhbhai’s product and then inducted him into the Honey Bee Network and the NIF, which gave him resources when he was severely constrained and lacked institutional support. The innovator also makes particular mention of Dr. Anil Gupta as his mentor. For Sugru, the turning point is less clear and the innovation process was certainly assisted by Nesta and by further investment. However, the turning point appeared to have occurred when an influential technology blogger, Harry Wallop gave Sugru a very positive review. This is because Wallop’s review had a viral effect on his online readership, and was caught by other reputable websites. While this does not imply that Sugru’s success was dependent on Wallop’s review, it suggests an important difference in the support the innovations received. The difference in the institution that enabled this turning point in each case suggests that contextual factors for developing and developed markets are very relevant. For Sugru, mass media was key for the frugal innovation. On the other hand, Mitticool’s dissemination also reached online channels but later in the process. Initially, it was through the NIF’s network and through the local network that Mansukhbhai could scale his innovation.
Another key difference between the institutional support in each case arises with respect to policy. For India, a clear effort is being made to counter the voids left by institutions that are absent necessary areas like education and training and in stimulating frugal innovation. In Europe, however, policy is not explicitly geared towards countering these institutional voids and fostering frugal innovation but towards fostering frugality in other respects. Frugality in Europe appears to take the form of funding and developing platforms, digital services and technologies and promoting ideas following the principles of “cradle to cradle” production or the circular economy. Thus, while it appears that European policies are not interested in frugal innovations, they are taking interest in frugal innovations that are relevant to local contexts. Apart from Europe’s H2020 strategy, the EU has also developed a Circular Economy Package that aims to reduce waste and enhance recycling and reuse. Such initiatives are strongly supported by organizations like The Nordic Frugal Innovation Society, which has helped developed platforms that use wasted food for consumption.
As noted earlier, regulation can also act as a significant hurdle to scaling up frugal innovations. The nature of public support for frugal innovations take a different face to those in developing markets. While support in India takes the form of support for tangible products, European markets are characterized by an exponential increase in digital products and services as seen through the Techfugees initiative set up in the UK in September 2015. Many of these initiatives and funding mechanisms show a trend of democratization in capital, where crowdfunding enables the development of novel solutions through digital platforms. Carlin and Soskice (2006) explain this difference through arguing that a case like Mitticool offers much lower “compliance costs” due to higher flexibility and lower quality standards to meet. This is because of an absence of certain regulatory mechanisms that arise with institutional voids. On the other hand, Mitticool also lacked the same kind of “incentive impact” in terms of resources available for innovation. Sugru had access to resources such as skills, human capital and knowledge at a much lower cost than Mitticool. For Mansukhbhai, it was after meeting Dr. Anil Gupta that he had access to more resources whereas Jane did not face the same barrier. Yet, Jane faced a high price for the resources available to her, as in the example of having to pay 20% of her grant or 10,000 USD for contracting labs to conduct experiments. Hence, regulation cannot be specifically defined in contextual settings because the incentivization through regulation is not direct.
Furthermore, the difference between the institutional support in each case arises with respect to policy. For India, a clear effort is being made to counter the voids left by institutions that are absent necessary areas like education and training and in stimulating frugal innovation. In Europe, however, policy is not explicitly geared towards countering these institutional voids and fostering frugal innovation but towards fostering frugality in other respects. Frugality in Europe appears to take the form of funding and developing platforms, digital services and technologies and promoting ideas following the principles of “cradle to cradle” production or the circular economy. Thus, while it appears that European policies are not interested in frugal innovations, they are taking interest in frugal innovations that are relevant to local contexts. Apart from Europe’s H2020 strategy, the EU has also developed a Circular Economy Package that aims to reduce waste and enhance recycling and reuse. Such initiatives are strongly supported by organizations like The Nordic Frugal Innovation Society, which has helped developed platforms that use wasted food for consumption.
A key observation in both cases was that even though funding was not incredibly large in either case, relative to their market settings. In the early stages of development where experimentation is high, it was enough to benefit the innovator at a time when the need was also high. With respect to Sugru, the market facilitated this process as it allowed her to signal her need early in the innovation process. Moderate funding also possibly acted as a positive constraint early in the innovation process as it pushed the innovators to “do more with less”.
Once along the development process, the need for investment funding was the only way to get the money the product needed to launch in the market. As Jane explains, it took over 100 investment pitches to get funded. While Mansukhbhai also required more rounds of funding, the nature of these funds were not from venture capitalists but from the NIF’s Micro-Venture Fund. This suggests a kind of institutional stickiness in the case of Mitticool, whereas Nesta’s presence was not as consistent as Mansukhbhai’s. Furthermore, for Sugru, funding from Nesta was not enough and meant the need for a larger ticket size. This also meant additional constraints such as equity a higher rate of return. Sugru could not show market success until after the product could be commercialized and this in itself is a significant barrier along the innovation process. However, this difference also meant that Sugru had a much higher expected rate of return as it would be if successful in a higher-income context.
The existence of award programs such as Nesta’s Creative Pioneers and NIF’s Technological Innovation and Traditional Knowledge Award, are important for incentivization as they offer grants to innovators that reduce the opportunity cost and strings attached to alternative forms of financing. Moreover, awards from institutions are also incentivizing in a non financial way as they provide innovators with a sense of achievement and recognition for their hard work. Although award programs also enhance the social legitimacy of pursuing frugal innovations, it cannot be argued that they are key drivers along the innovation process (Miller et al., 2012). For Mansukhbhai, his award did not come until after a level of scalability was achieved. Although Jane received an award from Nesta early in her innovation process and was likely to have been motivated by it, the commercialization of Sugru did not happen until several years later.
The entry of external institutions enabled accessibility to knowledge and research in environments outside the immediate settings of the innovators and were certainly important for both Jane and Mansukhbhai. This is also because the institutions enabled exchanges that enhanced their creative capacities along the innovation process. However, beyond the entry of external institutions later in the innovation process, the support of friends and family was also important for both innovators. Through leveraging personal networks, Jane and Mansukhbhai were able to implement changes based on the feedback of their networks. Although the social setting for each innovator was different, they shared a commonality that pertains to the role of testing and feedback from each innovator’s immediate network. It was through this communication that the innovators were able to implement changes and gain feedback efficiently and effectively. Without the shared culture that promoted tacit knowledge, understanding and feelings of trust, the innovators would be unlikely to have credited the role of feedback in their innovation processes. It was also through the personal involvement of those around them that the development of Sugru and Mitticool could remain cost effective and frugal when faced with resource constraints. For Jane, her partner and then her network of friends took part in building the mixer for Sugru and packaging materials before launch. For Mansukhbhai, his wife was his key point of sales.
5.6 Sustainability
Although frugality is associated with a sustainable lifestyle, there is no established relationship between frugality and sustainability in different economic settings. Since an objective comparison of frugal innovations is highly difficult and sustainability is not objectively measurable, this section compares the two innovations to other relevant solutions that are available in their respective market settings. To this end, the paper follows a general assumption that global sustainable progress is not possible without support from businesses who represent economic resources (Bansal, 2002). Ergo, sustainability is a weak but necessary condition for frugal innovations, regardless of the economic setting in which it occurs. By extending the concept of sustainability to Sugru in the U.K and Mitticool in India, the paper evaluates their implications as frugal innovations on the three dimensions of sustainability. The approach extends beyond individual value creation and financial sustainability by including social, economic and ecological value creation across society.
Social
Sugru does not suggest a direct link with social inclusion, or contribute to fulfilling basic necessities such as food, water or healthcare. Nevertheless, it does meet the need to fix broken products, ranging from water filters and drainage systems to refrigerator shelves. For small-quantity applications, its highly adhesive property suggests that it has the potential to be used in medical-care devices as well. While it is not directly including people who have been marginalized economically, Sugru operates in market-settings in which basic needs are met more easily than in India. For those purchasing it, Sugru does enable people to do things they would not be able to do otherwise. In several examples, it has enabled people with physical handicaps to perform activities that would other wise be difficult, including modifying a canoe paddle to allow the completion of a canoe race for a woman who lost her hands (Business News Daily, 2015). Additionally, Sugru may not be providing direct educational opportunities to its users but does allow educational experiences through safe experimentation with a material that encourages creativity and trial-by-error. An example of its education benefit lies in the case of a school project, in which a helium balloon that was sent into space with a camera attached by Sugru (Sugru, 2016b). Furthermore, its ability to gather a digital community around potential uses and ideas is a platform for open source knowledge that can be obtained without expense and has educational value for its users. Thus, while it is not more affordable when compared to its closest substitutes like super glue, it is not substitutable for certain applications and cannot be discounted for contributing to social inclusion for purposes within its developed markets.
On the other hand, Mitticool directly fulfills a basic need of its consumers by allowing the storage of water and the preservation of food. It is also contributing to better health of local communities who are not connected to electric grids. This occurs through enabling longevity in food storage through higher food consumption for families and a convenient means to rehydrate when water is difficult to store. Furthermore, given its clay composition, Mitticool reduces the risk of electrical other hazards like fires amongst villagers, where the supply of electricity is haphazard and fluctuating through the year. The product also contributes to the health of its customers by providing non-aluminum products such as clay pans that reduce the risk of cancer amongst its users, as opposed to aluminum pans available on the market. With sales across India now, Mitticool employs between 50 and 100 people and has contributed to local business activity considerably (India Mart).
Economic
At a glance, Sugru’s price appears to be relatively more expensive than products that may be used in its place at 12 USD for a packet of 3. However, the value offered by moldable glue is not the same as that offered by its closest substitutes; duct tape and super glue if the use in question is 4 pounds or lighter. For high quality versions of both duct tape and super glue, the price variation is not very large and thus Sugru may either be unaffordable or very affordable depending on what it is used for. Sugru’s value lies in preventing time spent on looking for replacement products when something goes wrong and allowing easy but durable fixing. This saves time and extra income that may would have been spent purchasing unnecessary items when something breaks or needs to be joined. It also enabled the added value of creating income by employing people in different geographical locations and on the internet, as the company continues to grow through outsourcing.
Mitticool offers an affordable solution for refrigeration when compared to market alternatives. In lower income brackets, the opportunity cost of expenditure becomes very high between competing priorities and basic needs, hence those consumers who would have to save part of their income to pay electricity bills for normal refrigeration are now able to spend on other purposes like food, education and healthcare. In the case of small entrepreneurs like food vendors, Mitticool provides an economic and efficient means of storage for small quantities of goods like milk, fruit and vegetables, which may lead to less waste and higher margins of revenue through preserving stocks. Hence, Mitticool increases its user’s inclusion into the market and may also contribute to enhancing feelings of equality amongst society members by empowering them through ownership.
Ecological
A key characteristic of both products appears to be their ecological sustainability. Both innovations offer higher energy and material efficiency than other market solutions and impact climate change less than existing alternatives. Mitticool’s use of clay for refrigeration as opposed to electricity, allows an efficient, bio-friendly solution that is further enhanced by the fact that many parts of India face frequent electricity fluctuations and less electricity usage implies less energy usage. While clay is not infinite in its supply, it is abundant in comparison to other resources like gas, implying that Mitticool is not contributing to the diminishing supply of global scarce resources. Clay is also a product that has a higher potential for recyclability than plastics, which follows a “cradle to cradle” production cycle rather than a “cradle to grave” process. Moreover, with no emissions, a lower carbon footprint and less landfill than for other kinds of refrigerators (such as plastic), the clay refrigerator is also more climate neutral than existing solutions. However, with no information about the materials used for Mitticool, there is no guarantee that emissions do not exist in their production process but in comparison to other products, the overall ecological sustainability of the product is evidently high.
Sugru contributes directly to recycling and preventing waste by allowing things to be fixed rather than thrown away. Thus, through this property, Sugru is actually contributing to behavioral change within consumers that encourages longer lifecycles of materials and recycling rather than waste. As a sticky but solid material, Sugru’s composition is based on silicone sealants and sawdust. These materials are not scarcely sourced and since all its remaining ingredients come from other industries, nothing in its production process is contributing to scarcity directly. Moreover, with very high durability Sugru does not contribute to landfill or waste in the short run. Furthermore, while the manufacturing of Sugru is neither heat nor energy intensive and does not contribute to emissions or pollution levels directly, the same cannot be said for its raw ingredients. However, while not petrochemical based, it is not biodegradable either and with a shelf life of about 13 months, Sugru may contribute to waste if unused as the material itself loses functionality. Hence, while Sugru is contributing directly to ecological sustainability through its value proposition and not adversely contributing to environmental degradation through its production process, it is not as environmentally innovative in its material composition as Mitticool.
Against the backdrop of industrial production and capitalism, innovation has framed by the agenda of developing appropriate technology for science and commercialization. In this framework, the discourse on innovation has been about providing a “supremely plausible answer” for why some “groups, economic institutions and nations advance and prosper” within the mainstream systems of market-based exchange (Welz, 2003, p.256). Part of this discourse has moved away from its essential focus on community well-being in local contexts. This is because mainstream market-based exchange is based upon principles of scarcity and power through profit, that have moved the discourse away from focusing on community well being in local contexts. Furthermore, scholarly research has been focused on the process of frugal innovation, rather than social characteristics underlying why the preference for frugal innovation exists and how it can be moved forward. Yet, the rise of the “knowledge economy” shows that information is vital and abundant, and may be used to repair systemic issues and fulfill social needs.
Frugal innovation is able to bridge the gap between failing market-exchange principles that have been embedded in conventional capitalism, and community-well being driven by sustainability. By moving the concept forward, frugal innovation can leverage information and knowledge from community-based innovations to drive sustainable growth. This is because the knowledge guiding frugal innovations is often context specific and conditioned by resource constraints. Mansukhbhai and Jane were examples of local innovators who were able leverage their intellectual and behavioral features to solve community needs. In situations of economic disparity, this enables “bottom of the pyramid” or financially excluded populations from having passive unmet needs to being active participants in the economy.
Furthermore, this study argues that frugal innovation is positively connected to the overarching need for sustainable consumption. This is because the frugal mindset is essentially connected to “doing more with less” on producer and consumer levels, thus driving a larger culture towards sustainability. By reinforcing positive impacts from the interdependent dimensions of economic, social and ecological sustainability frugal innovation takes steps towards addressing current societal challenges of inefficiency, inequality and waste. For example, Sugru is enabling a culture of “fixing and repair” that is driving the larger culture of the “Maker Movement”. Instead, such solutions indicate socially informed behaviors and values that are alternative to the mindset of unrestrained consumption but gain substantial value from their social and ecological uses.
The relationship between frugal innovation and sustainability is thus far weak but necessary. It is weak partly because of the definitional complexities of frugal innovation and sustainability, and partly in view of the difficulties associated with establishing their respective impacts in different market contexts. This is because both concepts are relative and not easily observable. Yet, it is necessary because sustainability is both a pressing and incontestable need under current systemic challenges. These include a need for lower prices, environmentally sustainable practices, higher consumer willingness to be frugal and the need for sustainable economic growth rather than linear production methods. For this reason, the Circular Economy provides an interesting alternative to “cradle to grave production” and is gaining attention amongst policymakers.
As a means to “do more with less for more people”, the concept of frugal innovation is bound to addressing unmet needs under resource constraints and market failures, that are propped up by existing institutional structures. Dessa (2009 as cited in Bhatti and Ventresca, 2013) cites environmental degradation as one such failure that transcends market maturity and form. Thus, frugal innovation and sustainability are yoked together in a way that makes the former a core feature of the latter. Yoon and Tello (2009) explain this linkage by tying innovation or “the development of new products, processes, services and technologies” to practices and outcomes that “contribute to the development and well-being of human needs and institutions while respecting the worlds’ natural resources and regenerative capacity” (p.88).
The previously defined features of frugal innovation are relatively airtight within the overarching framework of frugal innovation and regardless of the contextual differences influencing these features. This may be ascribed to the fact that the concept gained momentum in developing markets, where needs are great and observable. It may also be explained by the fact that relatively observable and often short-term implications exist in features like novelty, affordability, the presence resource constraints and scalability.
With roots in business, economics and accounting, these dimensions possess a degree of measurability, while the frugality as mindset is somewhat observable through behaviors and practices across multiple disciplines. Yet, with a clear picture of where frugal innovation is from, the contextual lens of frugal innovation is being adjusted to where it is going and why. Thus, in moving the concept forward to developed markets, it is useful to explore the relationship between sustainability and frugal innovations through breaking sustainability down to three generally accepted dimensions of sustainability that are relevant to both developed and developing markets. These “three pillars of sustainability” are the economic, the social and the ecological (Schlossberg and Zimmerman, 2003; Lozano, 2008, Sustainability Development Goals, 201519).
In creating value, economic and social aspects of sustainability are strongly linked to social value creation20. This compatibility is observable in societies where satisfaction falls with economic hardships or poor health, and although social satisfaction is a relative concept in itself, it is assumed as a core human feeling necessary for well-being. Torjaman (2000) builds on this by arguing that “human well-being cannot be sustained without a healthy environment and is equally unlikely in the absence of a vibrant economy” (p.2).
Building on the social dimension of value creation, frugal innovation is aimed at solving human needs while generating revenue. The linkage between these two ideas demonstrates itself in the fact that meeting basic needs, promoting equality of opportunities, social inclusion and self-sustainability through areas like education and health (Spangenberg and Omann, 2006). In this sense, both social sustainability and frugal innovation are interlinked with satisfying human needs.
Implications for Future Research
A key implication of frugal innovation is the need for networks and support from institutional frameworks. Informal institutions tend to shape the culture, behavior and values of frugal innovators and through their networks, provide feedback and financing for scalability without specific repayment criteria. On other hand, formal institutions are necessary to fund, develop and distribute innovations at some stage during the process because informal financing is often not enough given the legitimate need for experimentation. This often calls for a larger framework of institutional support that is capable of providing innovators with the means to scale largely. The National Innovation Foundation is an example of such a system and may be studied in greater depth in the developed world, where no such institution exists on such a scale yet. Further discourse may also benefit from focusing on the legitimacy derived by innovation policymaking and knowledge sharing for frugal innovation. The same may not hold true for innovations born from slack resources or corporate environments.
Although there are absolute differences in resource constraints in India and the U.K, the concept is relative when considered for their specific market and both innovations are born from individual resource constraints such as finances, time and knowledge. A clear difference exists in the scalability and the institutional settings for the cases, however each one is considered in the context of its source country. What is interesting to consider is how far bottom-up cases go once scaled and to what extent context specifies may change the orientation of frugal innovators. Such specifies may include the control of technology and power relations for the innovation and how innovators respond to new incentives such extrinsic motivations. With reference to scalability, a grassroots NGO studied Greece’s innovation landscape and found 70 projects framed by local exchange in community networks (Mason, 2015). These ranged from food co ops to free kinder-gardens and sustained themselves on frugality “in networked activity, free time and unused assets” rather than aspiring to be scaled-up and profitable. Thus, further research on the scalability of frugal innovations is also required.
Furthermore, the study recognizes that the two cases are not necessarily representative of the overall environments in each market but are indications of such and that the study would benefit from further comparisons that are immersed in local settings (Elger, 2010). To counter the geographical distance from the sources studied, the research methodology ensured in-depth conversations as far as possible and covered a variety of views on the cases.
There are absolute differences in the product’s affordability, since the threshold for poverty differs significantly in each country, these differences are not seen as barriers to comparing the mindsets guiding Sugru and Mitticool, or as hindrances in contrasting their effect on sustainability and its dimensions. Further study should, however, explore the cognitive and decision making processes that influence frugal innovators’ within differing economic settings in multiple cases. It should also focus on exploring the extent of closeness between the definitions of frugal innovation and sustainable innovation and how far this definition can be tested to fit both developed and developing market contexts.
This holds particularly true for developed market innovations, where a lack of data exists on specifically defined frugal innovations. In this respect further research should also focus on movements that share features with (or essentially are) frugal innovations. Such examples are the circular economy, the sharing economy and the digital economy; that are particularly context specific to developed countries that sustain them through their advanced infrastructural capabilities.
In conclusion, although it is difficult to equate frugality and sustainability on a conceptual level and definitions of both differ in different contextual settings, the compatibility between frugal innovations and sustainability drive the concept forward by addressing pressing global needs. Strongly linked with the mindset of frugality, the need for sustainability is common to both markets. This study does not dismiss possible tensions between areas such as social value creation and profit maximization (Dart, 2004). Instead, it suggests that frugal innovations are able to conciliate these dimensions through using market-based principles for sustainable innovation. Lastly, it posits that frugal innovations contribute to the overarching need for sustainability through reinforcing positive impacts from the interdependent dimensions of economic, social and ecological sustainability.