cfia / eadi workshop ‘how can frugal innovation become inclusive innovation?’ 26 and 27 november...
TRANSCRIPT
CFIA / EADI Workshop ‘How can frugal innovation become
inclusive innovation?’
26 and 27 November 2015, ISS, The Hague
Frugal Innovation: A Literature Review
Iva Peša (CFIA) & André Leliveld (ASC/CFIA)
Contact: [email protected] ; [email protected]
Centre for Frugal
Innovation in Africa
Literature review
•The ‘emergence’ of frugal innovation
•The definition of frugal innovation
•The cycle of frugal innovation
•Frugal innovation as inclusive innovation?
•Conclusion: towards a research agenda
Centre for Frugal Innovation in Africa
The ‘emergence’ of frugal innovation
Centre for Frugal Innovation in Africa
•The Economist, business guru talk and academic debate
•Historical precedents: WW II, East Africa, India
•Dominant innovation trajectory: capital intensive, high-tech, exogenous to the low-income context
•1970s: Appropriate Technology Movement
•1980s – now: Internationalisation of innovation – Global Value Chains– Global diffusion of capabilities– Rise of low income (BoP) and middle class consumers in Asia, Africa and Latin America– Economic crisis and trade collapse in North America and Europe (2008)– Polycentric innovation
•Changing policy context: more focus on the role of private sector and business in development (PSD)
The definition of frugal innovation
Aspects highlighted in literature•(Re)design / technology:
– Value sensitive design
– Basic functionalities
– Good enough quality / durability
•Cost and affordability– User value
– BoP / middle class consumers / preferences
•Innovation environment – Resource constraints
– Informal sector
– Polycentrism
Working definitionThe (re)design of products, services and systems to make them affordable for low-income customers without sacrificing user value.
Centre for Frugal Innovation in Africa
The cycle of frugal innovation
• Leading idea in literature: frugal innovation > product development
• Focus on:– Contextual challenges (low income / resource constrained)
– Organisational collaboration that fosters frugal innovation:• Role MNCs and MNC subsidiaries • Polycentric networks (e.g., MNCs – local entrepreneurs, MNCs-NGOs, etc.)• Bottom up (communities, informal sector, ‘prosumption’, ‘popular economies’)• Role knowledge centres
- Business model: production, distribution, consumption, marketing
- Institutions:- Governance and policy, including legal aspects- Motivations / interests- History / path dependency / institutional change
Centre for Frugal Innovation in Africa
Towards an integrative approach?
Centre for Frugal Innovation in Africa
Frugal innovation and inclusive innovation
Definition inclusive innovation:
“the development and implementation of new ideas which aspire to create opportunities that enhance social and economic wellbeing for disenfranchised members of society” (George, MacGahan & Prabhu, 2012, 663).
Frugal innovation as inclusive innovation? Two assessments:•Celebratory discourse on ability of international business to serve the needs of the BoP: ‘inclusive business for the poor’, ‘social business’, ‘pro-poor business’, ‘inclusive capitalism’•Role of corporate business might have adverse effects, redefining ‘the poor’ into consumers, delivering products poor people do not need, etc. Plea for more focus on locality, role of informal sector (not as part of GVCs)
The role of standards: a balancing act
Centre for Frugal Innovation in Africa
Towards a research agenda• More empirical macro / meso / micro studies needed on:
– roles and interests of actors (entrepreneurs, types, consumers, knowledge) involved
– technological conditions for frugal innovation– social, cultural and instutional contexts of frugal innovation– business models– transformative dimensions of frugal innovation: innovation systems, technology,
economy, communities, society, capabilities, consumer behaviour, etc.
• Theoretical contributions to:
- ethical literature focusing on early engagements in new technologies- the socio-technical systems literature- the innovation and entrepreneurship literature - the literature on inclusive business models and development- literature on economic transformation and local economic development - the emerging literature on patterns of consumption at the BoP
Centre for Frugal Innovation in Africa