OF INNOVATION

IMPROVING LIVES THROUGH INSPIRED USES OF

The city of Karachi in Pakistan is on the forefront of a new innovation that will potentially provide affordable public transport to billions of people in the developing world, while also improving – rather than further degrading – the environment. This year, Karachi is due to introduce a fleet of 200 zero-emissions vehicles powered by bio-methane produced from water buffalo excrement. The new bus network is expected to benefit 1.5mn citizens, while preventing 2.6mn tons of carbon dioxide from being pumped into the air over the next 30 years, and saving 50,000 gallons of fresh water annually.

Karachi’s potentially revolutionary public transport innovation is a great example of jugaad innovation. Popularized by Navi Radjou, Jaideep Prabhu, and Simone Ahuja in their 2012 book of the same title, the term “jugaad innovation” draws on a Hindi word that means making things work, or creating new things with meager resources. Jugaad innovation is by no means an idea that’s limited to the Indian sub-continent. From China to Africa to Southeast Asia and beyond, people with limited means have always drawn on their natural resourcefulness and creativity to solve problems with whatever they have on hand. At its heart, jugaad innovation is simply about frugal innovation – the inspired use of resources that are free, plentiful and/or unwanted to solve problems and make people’s lives better.

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THE FRUGAL FUTURE

THE FREE, THE PLENTIFUL AND THE UNWANTED

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We believe that frugal innovation is much more than just an interesting cultural phenomenon, or a mode of innovation that specifically meets the needs of the developing world. Increasingly, frugal innovation is the future of innovation. It is exactly the kind of innovation that’s necessary in the third age of consumption – the emerging global business context that’s defined by constrained capacity:

• Constrained economic capacity. More and more consumers are unable to afford the expensive new products that result from the traditional corporate approaches to innovation – approaches that tend to layer one pricey piece of intellectual property on top of another, resulting in innovations that require a high price in order to deliver acceptable ROI. As economic growth slows globally, and purchasing power diminishes, this problem will become more acute, making it impossible for companies to drive growth through innovations delivered through business-as-usual.

• Constrained resource capacity. The world is running out of natural resources, including clean water and many other materials that companies rely on to bring new products to market. In addition, consumers everywhere are increasingly clamoring for companies to be more responsible in their use of the world’s limited resources. They’re rewarding companies who help improve communities and the environment, and are punishing those who are seen as contributing to the world’s problems.

• Constrained cognitive capacity. As the pace of life accelerates for everyone everywhere, consumers are less and less open to new products and services that demand a large change in their everyday behavior. The more an innovation builds on what exists – in terms of behavior, resources and culture – the more likely it is to be adopted.

How can companies embrace frugal innovation to fuel business growth? Here are seven ideas we’ve learned from our innovation work around the world:

1. Aim for a better solution, not the perfect solution. When Arunachalam Muruganantham took up the challenge of freeing his wife – and the more than 80% of Indian women – who use old rags to deal with menstruation, he didn’t aim for the perfect substitute for conventional sanitary pads, which come packed with high-tech absorbent materials and features that aid adhesion and fit. The low-cost sanitary pads he created leverages cheap, locally available materials to offer women a good-enough and easily affordable step up from old rags.

2. Consider how technology can close the gap between the problem and the solution. Like in most of the developing world, eye health is a major problem in rural Kenya, where millions of people are going blind from conditions that can be stopped if caught and treated early. Realizing that there is cellular coverage even in villages that have no electricity or road access, Dr. Andrew Bastawruos developed PEEK, an app and a clip-on camera that community workers with minimal training can use to screen and diagnose eye conditions. PEEK connects the community workers to specialists in urban centers, who can help with diagnosis and treatment.

Frugal innovation is the future of innovation. It is exactly the kind of innovation that's necessary in the emerging third age of consumption — an age that's defined by constraint.

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3. But don’t assume that technology is the solution. In this age of digital everything, it’s easy to forget that innovation does not need to involve a technological solution. Sometimes, the least hi-tech solution is the right one. In Zimbabwe, where depression or kufungisisa is a widespread issue, Dixon Chibanda made a difference by teaching community grandmothers the basics of evidence-based therapy, and deploying them on Friendship Benches throughout the country.

4. Embrace starting from scratch. In places like India and Africa, millions of women and children have to walk up to six hours a day to collect water with heavy buckets. Most attempts to solve this problem focus on bringing water closer to people through the construction of pipes and other infrastructure. While this type of permanent solution is ideal, in most places where water access is a problem, it’s not one that can be immediately implemented due to a shortage of the necessary public funds. South Africa’s Pettie Petzer and Johan Jonker decided to attack the problem from a totally different angle. They invented the Hippo Water Roller – an affordable barrel-shaped container that can be pushed or pulled to make it easier to move clean water from source to home.

5. Take a wide view of what resources are free, plentiful and/or unwanted. Over 60% of Indonesians do not have health insurance. In rural areas where disposable income is limited, this made it difficult for doctors and clinics to provide health care at a profit. As a result of limited garbage processing infrastructure, what Indonesians do have in abundance is recyclable garbage. Seeing an opportunity, Dr. Gamal Albinsaid created Garbage Clinical Insurance, a scheme that enables people to access health care at accredited clinics in exchange for bringing in set amounts of recyclables that GCI could then recycle for cash. By identifying what people had an abundance of, and then finding a way of extracting value from it, Albinsaid managed to create a profitable business while solving a serious national issue.

6. Innovate with the future in mind. In thinking about what resources to use against an innovation challenge, it’s important to think not only of what’s free, plentiful or unwanted today, but also tomorrow. A few years ago, we were working with a home care company to create the next wave of products and services that would secure their future. Our discussions got exciting when one of their scientists pointed out that while all of their products depended on the availability of water, the price of water is likely to rise globally while the price of energy is likely to fall, thanks to developments in solar and other alternative energy sources. By looking at the innovation challenge from the perspective of what could be done with free sunlight, rather than scarce water, we helped them think of innovative new products and services that will revolutionize their category.

In this age of digital everything, it’s easy to forget that innovation does not need to involve a technological solution. Sometimes, the least hi-tech solution is the right one.

7. Go back to the start, and do it again. With frugal innovation aiming for the better solution rather than the perfect solution, it stands to reason that there will always be the need and the opportunity to iterate – a notion that should stand at the center of all innovation anyway! Picking up on an idea by the Brazilian mechanic Alfredo Moser, Illac Diaz provided daytime lighting to more than half a million homes, first in the Philippines and then in 15 countries around the world, through recycled, water-filled plastic bottles that refract sunlight around entire rooms. Building on that success, Diaz’s Liter of Light movement has recently started to light up the night too by attaching solar-powered batteries to its humble but ingenious bottles of light.

How do you start leveraging frugal innovation in your business? Think hard about these questions:

1. What assumptions do you and your competitors usually make in solving the problem that you’re trying to solve?

2. How are people solving this and similar problems without your help, and without the help of other companies or brands? What can be learned from this?

3. Looking broadly at the lives of the people you’re trying to help, what do they have a lot of that you might be able to extract value from, either directly or indirectly?

4. How do you construct a business model that allows you to profit from this innovation?

How can you apply the principles of frugal innovation to your company’s innovation efforts?

Kantar Consulting can help. Please contact Jeremy Sy (Singapore), Warren Minde (London), Fiona Lovatt (New York) or Dennis Wong (Sydney).