Frugal innovation

Frugal innovation or frugal engineering is the process of reducing the complexity and cost of a good and its production. Usually this refers to removing nonessential features from a durable good, such as a car or telephone, in order to sell it in developing countries. Designing products for such countries may also call for an increase in durability[1] and, when selling the products, reliance on unconventional distribution channels.[2] When trying to sell to so-called "overlooked consumers", firms hope volume will offset razor-thin profit margins.[2] Globalization[3] and rising incomes in developing countries may also drive frugal innovation.[4] Such services and products need not be of inferior quality but must be provided cheaply.[5] While frugal innovation has been associated with good-enough performance, in some sectors such as in healthcare, frugal innovation must offer maximum performance without compromising on quality.[6]

In May 2012 The Financial Times newspaper called the concept "increasingly fashionable".[7]

Several US universities have programs that develop frugal solutions. Such efforts include the Frugal Innovation Lab at Santa Clara University and a two quarter project course at Stanford University, the Entrepreneurial Design for Extreme Affordability program.[8]

  1. ^ Fontanella-Khan, James (May 19, 2011). "Supply chain: 'Frugal engineering' heads push into manufacturing". Financial Times. The Financial Times Ltd. Retrieved June 21, 2012.
  2. ^ a b Bellman, Eric (Oct 20, 2009). "Indian Firms Shift Focus to the Poor". The Wall Street Journal. pp. A.1.
  3. ^ Bhatti,Y. Khilji, S. & Basu, R. 2013. Frugal Innovation. In Globalization, Change and Learning in South Asia. Edited by Khilji, Shaista & Rowley, Chris. UK: Chandos Publishing. [1]
  4. ^ Shibulal, SD (May 13, 2011). "Emerging economies: outside-in and inside-out". livemint.com. HT Media. Retrieved June 24, 2012.
  5. ^ Bhatti, Yasser (March 19, 2012). "About Frugal Innovation Research". Frugal Innovation Portal. Said Business School, University of Oxford. Retrieved Nov 19, 2012.
  6. ^ Bhatti, Y., Basu, R. R., Barron, D., & Ventresca, M. J. (2018). Frugal Innovation: Models, Means, Methods. Cambridge University Press.
  7. ^ Crabtree, James. "More with less." FT.com. May 19, 2012.
  8. ^ For Santa Clara University's lab, see "About Frugal Innovation". Santa Clara University. Retrieved June 20, 2012. For Stanford University's course, see "Hasso Plattner Institute of Design at Stanford: Entrepreneurial Design for Extreme Affordability". Stanford University Institute of Design. Stanford University. 2010. Archived from the original on July 13, 2012. Retrieved June 20, 2012.