Sharing knowledge and acknowledging the innovativeness of those at the bottom of the economic pyramid is crucial
The idea of frugal innovation is not new. In developing markets such as India, many examples exist: Vodafone penetrated the market with pre-paid mobile phone service vouchers that cost as little as 10 rupees (less than 20 U.S. cents), while Procter & Gamble sold Tide detergent in small sachets for just one rupee to capture a market that could not afford the price of a full bottle.
While it improves the lives of millions of people who might otherwise have been denied the benefits of such products, there are unseen costs to such innovation.
“It is wrong to consider frugality only in terms of affordability,” says Anil Gupta of the Indian Institute of Management. In the case of Tide, “you have to spend a whole lot more money to collect the plastic sachets from thousands of villages in rural India.”
The importance of circularity
If government is unable to pay for the collection of those sachets, then nature will by absorbing the resulting littering, pollution, and landfills.
"It is wrong to consider frugality only in terms of affordability."
Gupta says he made the same mistake in the running of sustainability platform Honey Bee Network, which he founded in 1989. According to him, this was a “focus on the short term at the point of consumption affordability to the neglect of effect on environment, ethics and empathy in society”.
The importance of circularity, where products are “reused to extract their maximum value before safely and productively returning to the biosphere”, is not given enough emphasis, Gupta says. He highlighted how German airline Lufthansa practices it.
“The life of a commercial plane is about 30 to 35 years, but the life of a seat is 200 years,” Gupta explained at the recent SMU Institute of Innovation & Entrepreneurship event, Sustaining Frugal Green Innovations: A new paradigm of empathetic and evocative ecosystem. “Lufthansa started a subsidiary that took out the seats from the plane and refurbished them and sold them off as furniture. You can now have your own seat at home.”
“You can even have one from first class or business class,” he added, drawing chuckles from the audience.
Innovation at the bottom of the pyramid
While that is admirable, much of the innovation from corporations is the result of what Gupta describes as “incubation”. Such advances are “incremental, user-led modifications” that are achieved when the technology and its uses are well known. Those with limited economic resources will not be able to take this path, but innovation can come about from those at or near the bottom of the economic pyramid.
An example of that is the Mitticool fridge that keeps food fresh without electricity. Its inventor, Mansukhbhai Prajapati, used to produce earthen water fillers until the 2001 Gujarat earthquake. One of those damaged water fillers was featured in a newspaper photo feature with the caption: “the broken fridge of the poor”. “This got me thinking and I actually started working on a refrigerator that would keep food cool without needing electricity,” Prajapati said in a Hindustan Times article.
Prajapati eventually succeeded in producing the Mitticool fridge, which impressed Gupta so much that he helped secure funding for further expansion. Mitticool’s success fulfills the requirement for being both frugal and green: it is affordable to the poor (the cheapest model costs 3,400 rupees or less than US$60), totally biodegradable, and consumes no energy.
Sharing to innovate
To have more of such innovation, Gupta argues that knowledge must be shared widely. He highlighted the practice of bicycle tyres attached to plows in both China and India, which developed independently in both countries. If farmers in one country had discovered the technique earlier, and then shared it worldwide, it would lead to widespread increased productivity. “In the absence of cross pollination, one must reinvent the wheel,” says Gupta.
A way to promote innovation, Gupta says, is to follow the example of a young entrepreneur he had worked with, and who was working on developing mushroom farms. Gupta described how the young man told him everything he knew about farming mushrooms.
“I asked him, ‘What if I started my own mushroom farm to compete against you. What would you do?’ He said, ‘I’ll supply you with the spawn.’ I followed up, asking, ‘And if I started farming mushroom spawn?’ His answer: ‘No problem – I’ll move into high value medicinal mushrooms.’
“He didn’t mind sharing because he knew that the moment someone starts doing what he’s doing, he’ll move on to something better and higher up the value chain. The only way you can do that is when you create your own competitors.”
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Last updated on 23 Oct 2017 .
