Better for less

22nd August 2016

Nesta's Madeleine Gabriel, Tom Saunders, Florence Engasser and Oscar Nowlan on what Europe could learn from frugal innovation. This blog was originally published on the Nesta website.

‘Frugal innovation’ broadly means innovating to create solutions that are better and cheaper, from fewer resources. It’s particularly associated with India, where innovators are often described as having a jugaad mindset - a Hindi word roughly meaning “an improvised solution born from ingenuity and cleverness”. Frugal solutions focus strongly on meeting the needs of resource-constrained users and being ‘good enough’, rather than offering lots of bells and whistles: an approach often summed up as ‘more for less’.

This isn’t the way innovation is usually approached in richer countries. Here, our prevailing innovation model could be characterised as ‘more for more’ - creating products that offer more features, and can be sold at a premium.

So while we might be impressed by smart, simple, low cost solutions like the Mitticool - a clay refrigerator that requires no electricity yet keeps food fresh for several days - it can be hard to imagine how these innovations are relevant for people in richer European countries. But if we look beneath the surface to the underlying principles, maybe they’re more relevant than they initially seem.

For example, Husk Power Systems’ solution for rural electrification in India is unlikely to have a market in Europe, but we can take inspiration from its approach to generating value from waste. For HPS this means generating energy from common waste products, like rice husks. In a similar spirit, European firm Qarnot has developed the Q.rad, a radiator connected to the internet, that uses the heat generated from microprocessors. Since 2014, more than 100 French households are heated for free with Q.rads, computing remotely for major banks, 3D animation studios and research labs.

Or take Bangalore-based social enterprise SELCO’s approach to getting sustainable solar lighting to people on very low incomes. It works with local entrepreneurs to rent out solar lamps to market traders who only need them in the evenings. This makes lighting cheaper for the traders, who’d otherwise buy more expensive kerosene, as well as creating micro-entrepreneurship opportunities for local people. This principle of finding creative ways to use distributed assets could make life-improving products more accessible to customers in richer countries too, according to Professor Anil Gupta, founder of India’s Honey Bee Network for grassroots innovators. At a recent conference, he suggested that distributed manufacturing could provide a viable way of meeting needs when markets for products are not at a scale that would make it interesting for large companies to get involved - for example, for some forms of assistive technologies.

And while at first glance it might seem that European consumers aren’t interested in frugal solutions, a closer look suggests there are some areas of real demand. Jaideep Prabhu and Navi Radjou, who’ve written extensively about frugal innovation, point out that Renault-Dacia’s low cost Logan range, initially developed for lower-income markets in Eastern Europe, has now become a cash cow in Western Europe too. Ikea could be described as a European frugal innovation poster-child, making furniture radically cheaper and more accessible partly by getting consumers to build it themselves - if you will, another example of ‘using assets more effectively’.

There’s probably untapped potential, too. We might look for it in sectors where there's competition but little real innovation. Take international money transfer, for example. Dominated for years by traditional providers like Western Union, now digital services like Azimo and Transferwise are offering much cheaper ways of sending money abroad by coming up with new ways to link senders and recipients in different countries. And as we wrote last year, there seems to be little real innovation for low income consumers in Europe - so innovating to tackle the ‘poverty premium’ might be another seam to mine. Meanwhile, there’s surely scope for more ‘frugal thinking’ in public services, where efficiency savings alone aren’t enough to meet rapidly escalating costs and demand and where radically different approaches might be valuable.

Frugal innovation probably looks a bit different in Europe than in India or other middle income countries. We might expect European frugal innovation to incorporate more high-tech elements; the public sector is likely to be a more important customer; digital technologies may more often play a role; collaboration and connecting assets may be more central; and sustainability and circular economy considerations are probably going to feature more strongly.

With Fraunhofer ISI, we’re currently trying to find out. For the European Commission, we’re exploring the relevance and potential of frugal innovation for European firms and consumers. Download a summary of our initial scoping work here, or visit the European Commission's website to access the full interim report. Our final report will be published early in 2017 - watch this space for updates as we go.

Image by Overlaet [Own work] [CC BY-SA 3.0]

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