There was an EU tender last year to write a report on Frugal Innovation that was won by Fraunhofer-ISI and Nesta UK. They have just published an interim report titled “A Conceptual Analysis, Trends and Relevant Potentials in the Field of Frugal Innovation (for Europe)”
In their “Study on frugal innovation and reengineering of traditional techniques”, therefore, Fraunhofer ISI and NESTA, together with external experts, will establish what Europe can do to better capture the potential of frugal innovative activities at various levels.
First, by establishing if and in what way frugal innovation could be a central success strategy for and on the European market. Second, by analysing European firms’ situation on emerging markets where frugal innovation remains a main driver of growth. Third, by finding how frugal innovations can help address concerns with regard to resource efficiency, waste reduction and the preservation of cultural heritage.
I have been eagerly awaiting to read about this interim report as well as obviously the final report slated for 2017.
I am an evangelist of Fugal Innovations and we started our non profit The Nordic Frugal Innovation Society to show these innovations’ relevance for both emerging economies and the developed markets.
The issue here is that emerging economies require solutions that have “affordable excellence” for B2B and B2C sectors. But increasingly because of the economic crisis in 2008 and it’s repercussions even 8 years later in Finland and much of EU and other developed markets, there is an increasing relevance for frugal solutions in the developed world.
Coming back to the interim report from Fraunhofer-ISI and Nesta UK, they put forward 8 hypothesis and propositions as a conclusion to their report:
1. A mentality for frugal innovation and technological recombination is not exclusive to emerging
economies. It played a central role in Europe’s past development and remains prevalent in
many market oriented, mid-sized firms. Even in technology-driven contexts, frugal mindsets
can be (re)gained through active engagement.
2. Current routines of technology development will have to be substantially re-thought to enable
frugal solutions. Concrete applications of technologies under development will have to be
considered at much earlier stages (TRL4-5) and additional actors will have to be involved to
integrate a market dimension from the outset.
3. In Europe, many innovation processes remain contained within firms and fail to relevantly
involve potential users – creating a “closed world” with a lack of market awareness and an
overt affection to high-tech solutions. Successfully creating frugal solutions will require firms to
shift innovation practices towards more open models.
4. Key enabling technologies (KETs) will open up new avenues for frugal innovation. In particular,
newly available technologies such as various ICT applications, 3D printing and industry 4.0 will
not only open up new options for frugal products but, at least equally, for new, frugal
processes of innovation and production.
On markets (European)
5. In principle, many trends in European markets spur rising demand for frugal solutions – based
on needs and out of choice. While the refugee crisis has added further momentum to the
former, aspirations and preferences for the latter remain to be shaped. Finally, the public
sector itself can be an important customer for frugal innovation.
On markets (emerging)
6. Frugal innovation is a business opportunity for European firms in emerging markets and many
larger corporations have devised strategies on how to leverage it to the best of their ability.
Moreover, exposure to emerging market contexts is a suitable tool to engage with differing
mentalities, enable learning and improve business models in a holistic sense.
7. Achieving scale is a key challenge for frugal innovation as solutions will only develop a relevant
impact when delivered at large scale. Localised frugal solutions of the grassroots type,
however, may in fact not be scalable. In Europe, cultural, linguistic, regulatory and other
barriers between nations complicate the challenge.
8. Increasing access for more people is not unanimously positive with a view to ethical, ecological
and social impact. Detrimental and potentially conflicting outcomes have to be considered.
Hence, policy makers should not only promote frugal innovation, but also consider how to do so
in a way that addresses and manages potential tensions.