Frugal innovations are value-sensitive design and marketing strategies that bring relatively sophisticated products, services and systems within the reach of the billions of poorer and emerging new middle class consumers at the Middle and Bottom of the Pyramid.
Dr. André Leliveld: Frugal Innovations are innovations for resource constrained environments that can be placed on the junction of affordability and good enough quality while still having basic functionality
The challenge is not simply to provide stripped down versions to poorer consumers, but instead to provide value sensitive innovations without sacrificing user value. Such frugal innovations need to fit local circumstances and cultures. Moreover, successful frugal innovations are increasingly co-produced in so-called polycentric networks of innovation, which link entrepreneurs, designers, financiers, manufacturers and distributors from various parts of the globe.
Frugal Innovation is not a concept reserved to Africa alone. In less wealthy areas of Asia and South America the concept has been emerging over the last decade as well. Nevertheless, the CFIA is focussing primarily on Africa, where resource limitations in general are highest; leaving society with many challenges.
However, it is also the continent offering many chances. High growth rates, rapid urbanization and growing mobility led the Economist to label the continent as "Rising" and to ascribe Africa the chance to "follow in the footsteps of Asia" (Economist, December 2011).
Dr. André Leliveld: In contrast to what many people still think, 30% of Africa’s population is in the emerging middle class. This means there are more customers for frugal innovation.
What do we study?
Many examples of Frugal Innovation can be observed in Africa, ranging from solutions to water collection problems (HippoRoller) and issues with highly polluting cook stoves (Development of a range of sustainable stoves) to the emergence of new, mobile, ways to pay bills and save money (M-Pesa, Airtel, Zoona) and the CFIA is studying a selection of these manifestations of Frugal Innovation. We aim to observe possible patterns in the development, and chances and obstacles to success of Frugal Innovations. In doing this we work with questions like: which business model suits a Frugal Innovation?, how do I make sure a Frugal Innovation is also an Inclusive Innovation? and who are involved in a succesful Frugal Innovation? to ultimately be able to provide knowledge on when and where Frugal Innovations can be success.
How do we work?
Frugal Innovation in our opinion is a truly multidisciplinary process wherein often local and small organizations work together with bigger (foreign) partners like (international) NGO's, governments and MNO's. The power of local knowledge of consumer demand and local constraints, combined with international business experience and capital is what we call the polycentric approach which we also use in our research by cooperating intensively with African universities, NGO's, small businesess and research institutes and non-African SMO's, MNO's and research institutes.