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Frugal Innovation: An Assessment of Scholarly Discourse, Trends and Potential Societal Implications

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Abstract

The topic of frugal innovation is increasingly gaining relevance in social as well as scholarly discourse. Frugal innovations have been perceived by many to be a phenomenon generally confined to emerging economies where there are large groups of unserved consumers with unmet needs. But there is increasing evidence that this phenomenon is getting relevant also in the industrialized nations potentially affecting the long-term competitiveness of domestic firms not only overseas but also at home. This paper has a twofold objective: (a) It seeks to establish the theoretical antecedents of frugal innovation by examining the scholarly discourse; and (b) It attempts to generate hypotheses about its long-term relevance by examining historical trends of frugality and their disappearance. Based upon an extensive literature review and some preliminary primary data we propose a new working definition for frugal innovation and hypothesize that frugality was a key social value with positive associations before the era of unprecedented prosperity in the industrialized world, which led to saturated markets and inter alia to feature-driven competition and over-consumption of resources. New ground realities, e.g., economic downturn in the industrialized world and the rapidly rising consumption in the economically developing world, are expected to turn frugality, once again, into an important societal value and frugal innovation into a critical success factor in mid-term future.

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Notes

  1. 1.

    This study presents the results achieved in Work Package 1 of the BMBF-supported study “Potenziale, Herausforderungen und gesellschaftliche Relevanz frugaler Innovationen in Deutschland im Kontext des globalen Innovationswettbewerbs” (English title: Potentials, Challenges and Societal Relevance of Frugal Innovations for Germany in the Context of Global Innovation Competition).

  2. 2.

    This study is the result of a coordinated and shared work between both institutional partners. Fraunhofer MOEZ has been in the lead for the work the philosophical context of frugality (Sect. 2), whereas TUHH has been primarily responsible for working out the theoretical/scientific context of frugal innovation (Sect. 3) and the evaluation of the workshop results (Sect. 4).

  3. 3.

    See, http://www.dictionary.com/browse/frugal?s=t, last retrieved: 14.02.2016.

  4. 4.

    See, http://www.dictionary.com/browse/innovation?s=t, last retrieved: 14.02.2016.

  5. 5.

    The big depression in the 1930s also played a key role in a deliberate promotion of consumerism and of planned obsolescence (see, e.g., London, 1932).

  6. 6.

    According to Gemünden (2015: 4), “[t]he desire to get more with fewer resources is an evergreen of management research and practice”.

  7. 7.

    In many instances these developments were also an indirect result of the globalisation of R&D that started in the 1990s and picked up pace in the first decade of the new millennium (Archibugi & Pietrobelli, 2003; Ernst, 2006; Gerybadze & Reger, 1999).

  8. 8.

    As regard to other terms in Table 1, the link of frugal innovation to “user innovation” shows that the former can often be created by end-users and do not necessarily have to be generated in formal, firm boundaries. The link to “strategic management” as well as “emerging economies” is more in respect of their relevance in the corporate strategy. These terms are not used as synonyms to refer to this type of innovation.

  9. 9.

    For concept of “disruptive innovations”, see, e.g., Christensen and Raynor (2003).

  10. 10.

    (Mashelkar, 2014); some researchers also refer to it as “low cost-high tech” (see, e.g., Schanz, Hüsig, Dowling, & Gerybadze, 2011).

  11. 11.

    For “responsible innovation”, see, e.g. (Bogner, Decker, & Sotoudeh, 2015; Wood, Pitta, & Franzak, 2008).

  12. 12.

    For “sharing economy”, see, e.g. (Belk, 2014).

  13. 13.

    The workshop was held in Hamburg on January 12th, 2016 as an initial part of this BMBF-supported study.

  14. 14.

    Among the participants six belonged to the project team. These did not participate in the survey in order not to influence the survey outcome by their own opinions/perceptions.

  15. 15.

    See Sects. 2–4 of this paper.

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Acknowledgements

The authors would like to thank Prof. Dr. Cornelius Herstatt (TUHH), Prof. Dr. Thorsten Posselt and Prof. Dr. Tobias Dauth (both Fraunhofer MOEZ) for their valuable feedback. We are grateful to all participants of a workshop held on January 12, 2016 in Hamburg who provided useful research insights. Thanks are also due to Germany’s Federal Ministry of Education and Research (BMBF) for enabling this study. Rajnish Tiwari would like to sincerely thank Claussen Simon Foundation for supporting his research at TUHH with a generous grant.

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  1. Hamburg University of Technology, Hamburg, Germany

    Rajnish Tiwari & Katharina Kalogerakis

  2. Fraunhofer Center for International Management and Knowledge Economy, Leipzig, Germany

    Luise Fischer

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  1. Institute for Technology and Innovation Management, Hamburg University of Technology, Hamburg, Germany

    Cornelius Herstatt

  2. Institute for Technology and Innovation Management, Hamburg University of Technology, Hamburg, Germany

    Rajnish Tiwari

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Tiwari, R., Fischer, L., Kalogerakis, K. (2017). Frugal Innovation: An Assessment of Scholarly Discourse, Trends and Potential Societal Implications. In: Herstatt, C., Tiwari, R. (eds) Lead Market India. India Studies in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-46392-6_2

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