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developed low-cost devices specifically for the Indian market, sales volumes have been below expectations, apparently due to their failure to create appropriate low-cost distribution
and service networks, and inherent distrust of low-cost devices among the medical fraternity Duray and Avinash, 2012.
2.4. Grassroots Innovations
A third driver of innovation has been the grassroots innovation movement. An effort to identify and document local innovations particularly by farmers and traditional knowledge in
use in rural settings was launched in Gujarat in the late 1980s by Professor Anil Gupta at the Indian Institute of Management Ahmedabad. This subsequently evolved into a national
“Honey Bee” network that has its own publications, website, etc. Impressed by the wealth of knowledge available with these grassroots innovators, systematic efforts to support them and
make their knowledge widely available were started through the creation of non-profit organizations called Sristi and GIAN Grassroot Innovations Augmentation Network
Krishnan, 2005. In 2000, the Government of India set up the National Innovation Foundation NIF under
the umbrella of the Ministry of Science Technology. The NIF’s mission is to encourage and support innovation in the country by identifying, categorizing, and documenting grassroot
innovations; to give awards to outstanding innovators; and to provide support for the scaling- up and diffusion of promising innovations Krishnan, 2005. Recently, the NIF has announced
awards for inventors who can solve socially-relevant grand challenges. In a related initiative, the government has supported the creation of a Traditional Knowledge Digital Library TKDL
that acts as a repository for traditional knowledge and prevents the appropriation of Indian traditional knowledge by inventors in other countries by documenting and sharing information
on “prior art”Krishnan, 2011. Most of the grassroot innovators lack formal education. Much of their innovation is aimed
at solving problems they have themselves faced on their farms, or in daily life. Since they work under tight resource constraints, their solutions are usually based on locally-available
materials and clever improvisation. The innovations are frugal thanks to the context in which they were created.
2.5. Environmental Sustainability Concerns
Another driver of frugality is environmental sustainability. Products that can be manufactured more efficiently use less inputs per unit of output or that themselves perform
more efficiently e.g. use less energy have a smaller environmental footprint and are thus more environment-friendly. Most MNCs are under pressure from their stakeholders to
embrace a higher level of sustainability, and this prompts them to look at frugality more seriously. However, consumer demand in India has not yet evolved to the level that
sustainability concerns drive consumer purchase decision. At this stage of economic development, environmental sustainability does not seem to be a demand-side driver of
frugal innovation in India.
2.6. Innovation Policy and Resulting Changes in the Innovation System
Subsequent to the commencement of the economic reforms process, while the government financial support for the government RD system continued, some significant
new initiatives were taken to support industry-related RD. These included low-cost loans for technology commercialization through the Technology Development Board, the
Technopreneur Promotion Programme TePP that provides small financial grants to help individual inventors build prototypes, schemes to support scaling-up of locally-developed
technologies such as HGT and PATSER, and sector-specific programmes such as the New Drug Development Programme of the Department of Science Technology and the Small
Business Innovation Research Initiative of the Department of Biotechnology Krishnan, 2010. However, in the context of this paper it should be noted that none of these were
directed at low-cost or frugal innovation per se.
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On the pharmaceutical front, the picture is mixed. While on the one hand, the government has provided excise duty concessions for drugs discovered in India and covered by patents,
on the other hand through the re-introduction of product patents on drugs in the 2005 Patents Act, it has potentially made new drugs more expensive and prevented Indian pharmaceutical
companies from re-engineering patented molecules. However, through compulsory licensing, it retains the right to make patented molecules available to the public at lower prices as it did
recently in the case of a Bayer cancer drug. In 2010, the Government signaled its intent to support innovation that is beneficial on the
social front by declaring 2000- 2010 as the “Decade of Innovation,” and setting up a high level
National Innovation Council NIC. The NIC has a focus on supporting and diffusing innovation that can solve the myriad social problems of the country. Given the government’s
financial constraints, this essentially means through low-cost innovation. The NIC plans to set up a USD 1 billion venture fund and innovation clusters around universities in different
regions. The first such “Cluster Innovation Centre” was set up at Presidency University in Kolkata. The NIC also brought together national innovation czars from around the world to
Delhi in December 2011 to brainstorm on how the country can support social innovation better.
3. LESSONS FROM THE INDIAN EXPERIENCE IN FRUGAL INNOVATION AND SOME QUESTIONS
A list of impactful frugal innovations from India is given in Table 1. Table 1. Major Frugal Innovations Emerging from India
Innovation Type of Innovation
Comment
1 Aakash
Low-cost Tablet computer Based on effort by
government of India to procure low-cost computer
to enhance access to education; actually
developed outside India 2
Aravind Eyecare Low-cost cataract surgery
Based on innovation in process of cataract surgery
and change in business model
3 Bharti
Low-cost mobile services Based on change in
business model 4
GE MAC 400 Portable ECG Machine
Part of a family of medical devices built with basic
functionality for emerging markets
5 Hole in the Wall
Demonstrates that children can learn to use computers
on their own with little support.
Social innovation
6 Husk Power Systems
Energy from waste Primarily a business model
innovation of how to use waste to supply energy to
rural communities 7
Jaipur Foot Low-cost, customized
prosthetic Made with basic technology
and materials; appropriate for Indian social and cultural
conditions 8
Jaipur Knee Low-cost artificial knee
Collaborative effort of Jaipur foot team with US-based
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Innovation Type of Innovation
Comment research laboratories
9 Kerala Palliative Care
Community-based palliative care for seriously ill patients
Social innovation 10 Nano
World’s lowest cost car Rigorous optimization of
design and engineering of car
11 Narayana Hrudayalaya – Heart Surgery
Low-cost open heart surgery Process and business model innovation
12 Open Source Drug Discovery
Collaborative platform for drug discovery to treat
tropical diseases Alternate model to
intellectual property-based framework of large drug
firms 13 Reverse-engineered
Vaccines Low-cost vaccines
Based on strong technological capabilities of
Indian firms 14 Selco
Solar energy devices Innovation is primarily in the
business model of how solar energy devices are made
available to consumers with limited purchasing power
15 Swach Low-cost, high technology
water filter Collaborative effort by group
of companies from within the Tata group
16 Vortex ATM Low-cost rural automated
teller machines Rugged product designed
for use in challenging conditions
Source: of Innovations: Bound Thornton, 2012, Figure 1, p. 15
Some broad trends are visible from the innovations listed in this table: Many of the innovations are based on process or business model innovations.
Though some of them use high technology, technological advancement is not the main driver of the impactful frugal innovations that have emerged from India so far.
Government or formal innovation system inputs have not played a significant direct role in a majority of these innovations.
The Indian experience with frugal innovation offers some learning on the frugal innovation process and what it takes to enhance it, but raises several questions as well:
3.1. What is Frugal Innovation?
There have been some efforts by scholars to identify the defining elements of frugal innovation, based on the Indian experience, but there is a lack of unanimity as to what it
constitutes. Kumar and Puranam 2011 identified six elements that constitute frugal engineering, a
term that is very close in meaning to frugal innovation. These are robustness, portability, de- featuring, leapfrog technology, megascale production and service ecosystems.
Radjou, Prabhu and Ahuja 2012 see what they call Jugaad innovation which is conceptually similar to frugal innovation as low-cost, flexible and inclusive compared to the
expensive, rigid and elitist RD-based innovation model of most western companies. In their process perspective, companies can develop frugal innovation capabilities by seeking
opportunity in adversity, doing more with less, thinking and acting flexibly, keeping it simple, including the margin, and following their heart.
Given that the labour cost advantages of a country like India are fast eroding, for frugal innovation to be sustainable, it has to be more than reducing the cost of the innovation
process through labour-cost arbitrage.
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Again, taking a process perspective, Simanis and Hart 2009 advocate, on the basis of the failure of many bottom-of-the-pyramid initiatives, moving from a structural innovation
paradigm to an embedded innovation paradigm where companies build partnerships with relevant communities to co-create for the community.
Though frugal does not necessarily mean low -tech, and some of the relatively successful frugal innovations do involve using contemporary if not cutting edge technology [e.g. the
Tata Swach water filter that uses nanotechnology to improve its filtration effectiveness], combining high tech with frugality remains a serious challenge for innovators, particularly in
an environment where high technology skills, and infrastructure are in short supply.
3.2. Is there anything to suggest that India is especially supportive of frugal
