Frugal innovation is a strategy that focuses on the design and creation of simple but effective solutions to deliver affordable products, services or systems. In resource-constrained environments, the frugal innovation process attempts to use entrepreneurship and innovation tools to address the problems that affect the base (bottom) of the economic pyramid (BoP). Frugal innovation’s focus on context, affordability, and renewability means it could potentially aid in poverty alleviation and long term socio-economic and environmental sustainability. Due to these aspects, it has potential to create relevant innovations that help reach the UN Sustainable Development Goals (SDGs). Water management and sanitation entrepreneurs and practitioners can identify such innovations and replicate them or use frugal innovation strategies to design sustainable solutions to issues such as lack of clean water and pollution due to limited or non-existing essential sanitary services.
This factsheet introduces the concept of frugal innovation, how it can be applied, and how it may aid in reaching the SDGs. We share guidance and examples of frugal innovation to aid you in being able to identify and develop more potential opportunities for innovation in the WASH sector for the BoP.
Title picture: Resource recovery from waste in Uganda, where fuel briquettes are produced from agro-waste and municipal solid waste. Source: Water for People
What is Frugal Innovation all about?
Frugal innovation builds off of the notion of doing more with less. It focuses on the idea that resource scarcity does not need to limit innovation, but instead can be an opportunity to design more efficient and affordable solutions. This (re)design of products, services or systems is centred on affordability, cutting costs for low-income customers without sacrificing value, and bringing these innovations into the reach of large numbers of people. By minimising the use of resources in the whole process, including development, production, and delivery, frugal innovation attempts turn financial, material or institutional limitations into an advantage. This concept comes from research which shows that extreme scarcity of resources can promote scarcity-driven innovation. [PANSERA, M. et al. 2016] By targeting basic needs, with cheaper solutions than the market alternatives, frugal innovation strives to provide higher value innovations. At the core of this strategy and implementation is co-creation in a cultural, economic and/or religious setting, as well as, ideally at the same time, taking into account the environmental, social, and economic aspects.
By whom, for whom:
Frugal innovation can come from anyone, but the concept is especially seen in innovation from the BoP and emerging markets. This means that the design often minimises financial, material, and human resources, as the innovation is developed by a group which is resource limited, including sometimes in basic human needs. The BoP innovation offers and includes knowledge of the community’s specific needs and context, which are often difficult to see when one is not part of the community.
The aspect of design and development of products by and for the underserved, recognises the capability of innovation in all people, unrelated to their level of education, experience or wealth. This process, where innovators with little education or technological background informally design products, builds grassroots movements. These movements have the potential to create sustainable development for poor communities by improving the participation of socially excluded groups into the governance and institutional systems.
The process and approach can also be used by top-down institutions and centralised companies when working in resources scare contexts. The strategy can allow organisations to create new opportunities for innovation and impact while growing new market segments. In addition, frugal innovation can serve as one way for the private sector to engage with development issues, potentially allowing for a point to promote sustainability in development.
In the WASH sector this strategy can be applied by service providers to understand and create solutions for specific target audiences who need access to clean water and satiation services. Entrepreneurs, NGOs and governments are among those who can utilize the innovation process to address issues, such as public health, hygiene, open defecation and limited drinking water supply. While generally targeting the needs of the BoP, the strategy can be applied to various situations and locations, including schools,hospitals and communities. This approach can not only lead to new products and direct services, but also to complex strategies, such as innovative behavior-change communication tools, which are useful for ensuring sustainable progress in WASH projects.
The Frugal Innovation Process:
The process of frugal innovation most often happens informally, however, some conditions tend to promote the development. The results of the process are a form of a minimum viable product (MVP). Although attributes depend on the target market, the three main characteristics of frugal innovation are cost reduction, concentration on core functionalities, and optimised performance level. [WEYRAUCH, T. et al. 2017] [Graphic adapted from PANSERA, M. et al. 2016]
Potential to foster Economic, Social and Environmental Sustainability:
There are various ways in which frugal innovation has potential to be beneficial beyond the product or services designed. Since the designs are often created in resource strained environments, the results usually minimise the energy and materials needed and wasted, thus leading to a lower environmental impact. According to some research studies frugal innovations tend to be more sustainable overall than their market product alternatives. [MCPHEE, C. et al. 2018]
In addition, these innovations have the potential to contribute to the economic growth of developing countries. The resulting economic growth may promote increased productivity, decreased poverty, and overall sustainability, while addressing the specific needs of an underserved community. Since the concept is targeting BoP markets, the extension of the larger economy to these parts of society can be part of the solution to socio-economic issues.
Applying the frugal innovation process to the WASH sector has the potential of creating and furthering critical development towards attaining the UN SDG 6, ensuring access to water and sanitation for all. With past examples of frugal innovation taking place at the BoP we see the development of ideas such as low cost quality sanitary pads, equipment to make water fetching easier and quicker and simple sanitation facilities. As a result of the use of these designs, which are often more resourceful and minimalist, other benefits may emerge, in particular water savings from more efficient toilet and sewage systems, lower environmental pollution due to less wastewater emissions and public health from cleaner water and lower exposure risks. The added values aid in reaching SDGs beyond number 6, which, for example may include good health and well being (3), sustainable cities and communities (11) and gender equality (5) among others.
When frugal innovation is effective, it can lead to the innovation of low-cost and valuable benefits for socio-economic and ecological issues, including inclusivity and sustainability. These resulting impacts can play an important role in furthering the success of many SDGs.
Challenges and Potential Drawbacks:
Although, frugal innovation may lead to positive impacts, there are also some challenges and drawbacks in the process of this strategy. The process concept and patterns are currently still under-researched and not fully understood. However, some studies show that these innovations tend to have short lifespans due to premature failure. Furthermore, some studies question if frugal innovation leads to more sustainable designs and results.
Due to the complexity of the global production and consumption value chain, deficiencies in scale, sustainability and institutional structures may arise with the development of frugal innovations. Due to the focus of affordability, and potential disregard of value chains, the strategy may sometimes neglect social, environmental, and economic implications. For example, unsustainable products may emerge from low-cost production, suppliers, and materials, as well as waste generation. This challenge can be especially important to consider in regions and sectors which are experiencing rapid industrialisation and weak enforcement of social and environmental regulations. Furthermore, since this innovation process is often centred on finding a solution of a single, specific challenge, instead of a sector or institutional problem, it may sometimes not contribute to more comprehensive sustainability. [HYVÄRINEN, A. et al. 2016]
Because frugal innovation usually occurs at the BoP, the entrepreneurship and business related to a newly designed product can result in the introduction of a more formal economy in a specific area. This can potentially threaten livelihoods and lifestyles when informal economies and jobs are removed. The impacts of innovation on the relationship between informal and formal economies, and to those who depend on them, is often difficult to assess.
As identified by LEVANEN, J. et al. (2016) in their paper Implications of Frugal Innovations on Sustainable Development the sustainability challenges for frugal innovation include the proper integration of material efficiency into designs, the patient promotion of inclusive employment and the promotion of inclusive and sustainable local industrialisation.
How can entrepreneurs encourage frugal innovation?
There are a number of strategies to promote the frugal innovation process in business and entrepreneurship. Here are just a few: [Adapted from RADJOU, N. 2017, TED article and PRABHU, J.et al. 2014, Harvard Business article]
- Keep products simple: use empathic understanding to identity the real need instead of creating complex products to impress customers
- Do not reinvent the wheel: use the resources and technologies which already exist and apply them in innovative ways
- Scale horizontally: use a supply chain, production and distribution that is flexible, agile and responds quickly to needs
- Build circular value networks: instead of linear value chains, use the more sustainable and resourceefficient circular methods
- Crowdsource innovation: find frugal solutions from collaborating with external entrepreneurs
- Simple and flexible structure for employees: allow for faster and better work and solution finding by empowering employees in a simple organisation structure with little bureaucracy
- Use Key performance indicators (KPIs): incentivize frugal innovation by enabling employees to compare individual efforts with company goals
Case Study Examples:
Frugal innovations have already been developed in various sectors and regions. This includes products in healthcare, energy solutions, household needs and water and sanitation challenges.
- Waterless sanitation system: SavvyLoo is a waterless sanitation system design which provides an alternative to waterborne, chemical toilets or pit latrines. The desiccating toilet aids in drying organic waste to produce biomass by automatically separating liquids from solids. SavvyLoo was founded by Dr. Dudley Jackson for rural and temporary settlements and is currently in its pilot stage. [DRESSLER, A. et al. 2018]
- Water purification device: Tata Chemicals of India developed Tata Swach (Water), which is a gravity driven “table top” water purification device to eliminate bacteria and viruses for drinking water. It does not require electricity or running water and is meant for household use. The rice husk ash and nanotechnology design has a replaceable “bulb,” each with a capacity to filter 1500 or 3000 litres. When Tata Swach was launched in India in 2009, it was one of the world’s cheapest water purifiers. [LEVANEN, J. et al. 2016]
- Frugal weather stations: TransAfrican Hydro-Meteorological Observatory (TAHMO) is an initiative to build a 20,000 affordable “frugal” weather stations in Sub Saharan Africa. The data collected from the stations will be made available to farmers as weather information. The stations are also meant to collect important climate change tracking data in Africa and aid in the forecasting of extreme weather events. A pilot project is currently being conducted in Ghana. Check out more about this project at Centre for Frugal Innovation in Africa.
The simplicity of frugal innovation allows for entrepreneurship and innovation to occur and be recognised at the BoP. The concept also encourages the development of solutions to needs present in under-served communities, while attempting to do more with less. For companies, it can broaden the view on what problems they aim to solve. It also allows for the development of a new mind-set to find new ways to respond to challenges and it can help find solutions that are outside of the traditional development structures.
As strategies are used and further developed to grow this design process, it is essential to keep in mind the potential drawbacks and subsequent negative impacts. With a broader view and consideration of the whole value chain, instead of only focusing on the product, companies can also consider the sustainability of products.
Yet, frugal innovation can potentially play an important role in tackling the challenges of socio-economic and environmentally sustainable development. If effective, the concept can be a useful tool in reaching many of the UN SDGs. In the WASH sector this innovation process can hopefully be used to find solutions to issues associated with the lack of clean water and pollution due to poor sanitary systems. Frugal innovation can potentially guide investment and project management for the sustainable solving of water and sanitation challenges.
Implications of Frugal Innovations on Sustainable Development: Evaluating Water and Energy Innovations
Introducing a Sustainability Evaluation Framework based on the Sustainable Development Goals applied to Four Cases of South African Frugal Innovation
Globalization of the Future: How can Frugal Innovation foster Economic, Social and Environmental Sustainability?
Potential and Pitfalls of Frugal Innovation in the Water Sector: Insights from Tanzania to Global Value Chains
The Leiden-Delft-Erasmus Centre for Frugal Innovation in Africa (CFIA) is an academic research centre focused on frugal innovation. Technological and research projects are used to investigate the development of scientifically sound frameworks leading to more a effective use of frugal innovations and technologies. In addition, through teaching and consulting, knowledge on frugal innovation is exchanged.https://www.cfia.nl/home [Accessed: 21.01.2019]