Frugal innovation has emerged as a distinctive strength of the Indian innovation system .While frugal innovation is not the preserve of India, a number of factors have aligned to create the conditions for high–impact frugal innovation in India which can be applied to other emerging markets too.
1. A Culture of ‘Jugaad’: Jugaad is a Hindi word that roughly translates as ‘overcoming harsh constraints by improvising an effective solution using limited resources.’ The Honey Bee Network and SRISTI, the Society for Research and Initiatives for Sustainable Technologies and Institutions, have documented over 10,000 grassroots innovations of this kind, with a view to patenting them as validation of their intellectual and commercial merit. The authors…show more content… Growing Middle Class- A huge market with a growing, aspirational middle class creates the perfect conditions for frugal innovation. Growth that has pulled millions of Indians out of poverty in recent years is also leading to the rapid growth of the country’s middle class. McKinsey projections show that by 2025 a continuing rise in personal incomes will cause this to grow at least tenfold. Despite low individual purchasing power, the overall size of the market creates huge purchasing power at lower income levels. The middle and BOP(bottom of the pyramid) class consumers in India and other developing countries are the fastest-growing consumer segments in the world. It has been suggested that serving these budget-constrained consumers can lead to successful frugal engineering and innovation examples (Kumar & Puranam…show more content… Strengths in service and business model innovation create an advantage in creative remodeling of product–service ecosystems- While the revolution provoked by India’s software outsourcing story is well known, other stories of revolutionary business model innovation are less well known. Take the story of the Aravind Eye Hospital. From its beginnings as a modest 20–bed hospital in the 80s, Aravind had already grown into a 1,400–bed hospital complex by 1992. By then it had screened 3.65 million patients and performed 335,000 cataract surgeries. It now performs 200,000 surgeries a year. At the same time as running a profitable company, it delivered nearly 70 per cent of these operations free of charge to the poor. At the heart of its business model is multi–tiered pricing or cross–subsidization – where the core service remains the same but profits from wealthier customers cover deficits from those less available to pay. This model has been imitated around the world. (Sehgal, Dehoff and Panneer,