Frugal Innovation: Keep It Simple

Frugal innovation — a definition

Frugal can be described as “simple, simple, or humble.” The goal of Frugal Innovations is to focus only on basic components. In doing so, you do not focus on the innovative performance itself, but on the requirements and the users or target group of the innovation. A frugal solution is therefore easy and reliable to use and therefore meets the customer needs much better. On the one hand, production is more resource-efficient, and on the other hand, the result can be offered more cheaply. Frugal innovations can therefore be found more frequently in developing and emerging countries. This is because people living there have lower incomes than people in industrialized countries.

But frugal innovation doesn't just take place there and doesn't just have to focus on a product buy it yourself. Even in industrialized countries, the approach is becoming increasingly popular and complete business models can be subject to the concept. Swedish furniture store IKEA and hotel chain Motel One are good examples for frugal innovations. Apple is also thinking frugal with the various variants of the iPhone 12. This is because the more target groups can be addressed, the larger the customer base and market share become. Starting with the concentration on the basic components, the frugal idea continues to a more local and shorter value chain. Frugal innovation is therefore not limited to one sector or a specific area, but is possible everywhere — in line with the motto “Keep it simple” or “More from Less”. And digitization is taking the concept to a new level.

How is a frugal innovation created?

The acceptance of companies often deviates from the wishes and needs of consumers. They want a functioning product or a flawless service that does their job and nothing more. This is exactly where frugal innovation starts — functional, user-friendly and local.

Specifically, frugal innovation from a product or service means the following:

• Remove features that are not part of the basic functionalities
• Make materials, design, or processes more environmentally friendly or local, e.g. re- and up-cycling
• Adapt existing resources, e.g. reuse instead of making new ones
• Add new features only through minimal changes, e.g. through software updates
• Simplify complicated, expensive, or time-consuming parts or processes
• Additionally, adjust the business model to reduce costs
• Build an ecosystem in the spirit of open innovation, e.g. by involving consultants, experts, researchers, organizations, etc.