Consumer Research Reports, Environment & Energy

When Innovation is Frugal!

ChotuKool is a tiny refrigerator using the cooling system of computers. Developed in India, it allows the poorest to be able to keep their food. This is called “frugal innovation”. The latter has undoubtedly always existed, but their achievements on a larger scale (in particular in India) and their increasingly global dissemination, make them a type of technological renewal compatible with the improvement of the sustainability of economies. What are the characteristics of these initiatives?

Their principle is to produce goods (or even services) for those on the lowest incomes; their nature is not radically new but their design has been adapted to make them more affordable; these creations must be adapted to contexts of low comfort and not very complex as for their technological structure.

These objects are therefore thought to be cheaper, of better quality, while optimizing the resources used. They primarily target the markets of emerging countries, where populations with low levels of resources are numerous.

The concept of frugal innovation (“jugaad”), born in India, is attributed to the French-Indian economist Navi Radjou.

An inclusive “low-tech”

Let’s take a few examples. An incubator for infants sold for 3,000 dollars (GE Lullaby) – against the 12,000 dollars that this medical device is worth on average – created in India in 2006. The “link Base Station”, which collects weather information broadcast by wi-fi to farmers. Or Kokomo, a small ecological and totally hygienic cradle for African babies made with local materials.

All of these products are durable, simple, effective, and have essential functions. The research and development process for this type of product is based on low financial resources. It is based on know-how, intelligent DIY, more on ingenuity than engineering.

The frugal product is distinguished by a concentration on essential functionalities, with low technological complexity, but it presents a high level of performance and reliability. The GE Lullaby incubator mentioned above is now in service in Belgian or Italian hospitals. It meets basic needs but allows people at the bottom of the social pyramid to raise their level of consumption.

Frugal innovation has been analyzed as a real opportunity for emerging countries. This does not prevent considering its deployment in developed economies, on the contrary. Its general features, low-tech and low-cost, are just as relevant because it contains properties that make it compatible with sustainable development.

Much less greedy, more repairable

Frugal innovation generally has important environmental virtues, at least in comparison with the equivalent traditional product. The goods are in the vast majority of cases smaller, less bulky. Saving materials, they impose less pressure on natural resources.

Their lower technological complexity has two notable consequences. Having fewer components, the frugal product is more easily repairable. This recyclable potential strengthens the mechanisms specific to the circular economy. We can also anticipate that its lifespan is higher (and little subject to planned obsolescence).

So many beneficial effects for the environment. Its manufacture is also more frugal and saves materials and energy. Lighter, the product is more easily transportable (including in global production lines), accentuating the ability to stay on a more sustainable development path.

Rebound effect and market logic

However, let there be no mistake. Frugal innovation does not directly aim to thwart environmental damage or to fight global warming. Frugal products also cause emissions (in particular energy production tools, such as a very simple oven for cooking food, which uses fossil fuels and therefore releases greenhouse gases).

This mode of production does not necessarily reduce negative externalities compared to conventional products, for two main reasons. The rebound effect, in the first place: with frugal innovation, the cost and price of products decrease, which can cause an increase in demand. There is a risk that the positive environmental gains of a unit of product will be canceled out by the growth in the number of goods produced resulting from the increase in demand for this same good.

Frugal innovation is not motivated by environmental concern, but commercial. There is a risk that economic issues will take over. Appropriate public policies could undoubtedly constitute a point of support for the relevant dissemination of this type of innovation.

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