Innovation Done in “Frugal” Fashion:Evidence from African Market

Stephen Ozoigbo, IFTIIN Foundation

What is Innovation?

Both a process and the end result “New”, “novel”, “original”… “Important” and “significant”

Why Innovation is a Big Deal

One of the primary ways of achieving product differentiation, and thus competitive advantage

The single most important contributing factor to long-term productivity and economic growth (Grubler et al., 1999)

Important to the advancement of society in general around the world

What THEY Said about Innovation

Some more…

And Finally:

Why you should NEVER listen to your customers “to create the future road map for your product or service”: “Entrepreneurs

need to be reminded that it's not the job of their customers to know what they don't.”

What Do They Mean?

Innovation is a top-to-bottom, one-way linear process from the business (or more accurately, the entrepreneurs) to the end consumers

The creativities (or genius) of the entrepreneurs are the most crucial elements for innovation

Usually implies huge resources/investment requirement

And the Academia Agrees

Innovation Chain model (Carbon Trust 2002):

That is Great, but…

What about elsewhere in the world where Resources are significantly restrained? The customers know exactly what they need,

but no existing product/service can meet their needs?

Because the customers have limited means

Emerging trend in innovation: Frugal innovation

What is Frugal Innovation?

Innovation done with limited resources, targeting customers with specific needs and limited means It entails making better things, not just cheaper

things. Frugal innovation extends to services, not just

products. Frugal innovation is about remodeling, not just de-

featuring. Low cost does not mean low-tech: frugal

innovation can require, or be combined with frontier science and technology.

Our goal:

We present our (preliminary) attempt to formulating a theoretic framework of frugal innovation based on case studies in African markets

Why Africa? Good reasons for optimism for entrepreneurs

in Africa Readily available resources for innovation

remain limited in most of African nations Cases of successful stories

Our Basic Research Framework

The Cases

Case 1: Solar-powered low cost hearing aids in Botswana by Godisa Technologies

Case 2: Digital education in Kenya by eLimu and Safaricom

Case 3: a mobile job matching application in Ghana by mPawa

Case 4: mobile money transfer services in Kenya by M-PESA

Some Common Patterns Identified from the Cases Active role for target customers Emphases on social issues South-to-south, bottom-up technology

diffusion Long-term focus of business models Partnership between local innovators with

expertise from developed nations

Integrated Framework for Frugal Innovation (IFFI)

How IFFI Fits into National Innovation System

What Else Can Practitioners Do?

Help to establish the relationship between developing economies and developed economies (circle 1) Increase Diasporas engagement in order to

create visibility for frugal innovators, their technologies and products.

Stimulate private capital flows to frugal innovation ecosystems through multi-stakeholder partnerships and matching funds from government agencies.

What Else Can Practitioners Do?

Provide policy suggestions regarding how to foster, facilitate, and promote such innovation (circle 2)

Increase University based curriculum for Frugal Innovation (circle 3)

Provide successful experience / learning lessons from other developing economies’ frugal innovation