Western governments have always been intrigued by India. And they are not less so now, given the global anticipation of further economic crisis and opportunity. Everything that is asserted about India is also provable in its direct opposite. Therefore, unravelling the mystery of India is a never-ending exercise. Our Frugal Future: Lessons from India’s Innovation System, a research publication by the London-based think tank Nesta, is a follow-up to an excellent earlier exploration, India: The Uneven Innovator (2007), in which the authors made the case against a simplistic view of science and innovation in India. Both these studies are sponsored by the UK Foreign & Commonwealth Office (FCO).
The authors say institutional efforts towards innovation – especially government-sponsored efforts – although on the increase, remain inadequate. However, Indian innovation should also be measured by non-traditional metrics. The authors identify “frugal innovation” as the key feature of the Indian innovation paradigm. Frugal innovation is being pursued in all sectors — private, government and unorganised.
Frugal innovation is characterised by the search for fit-for-purpose, fit-for-purse solutions. “Frugal” is a mindset and can be applied in any setting — high-tech or “bullock-cart”. “Jugaad” has been widely discussed as the precursor to “frugal innovation”; it is the response of the underdog to high-price tag innovation. It is the smart response of the less rich, who seek to achieve similar outcomes at a lower cost and minus the inessential frills. It is a survival mechanism in a highly competitive and cost-conscious environment where textbook procedures may be cumbersome and may need to be bent or reinvented, and the players cannot wait for the administration to get its act together. At the end of the day, it’s about being bold and entrepreneurial. It’s about getting “more and more for less and less, for more and more people”. The “frugal” mentality in India is aided by a national culture of conservation, avoidance of waste and reverence for the environment.
The authors refer to more respectable intellectual traditions — citing the influence of E F Schumacher’s Small is Beautiful (1962), through Toyota’s lean manufacturing (1980s), to C K Prahalad’s Bottom of the Pyramid (2002). Frugal innovation is also seen as a notch above jugaad, a bolder and more assured approach towards problem solving, less driven by constraints than by values.
In particular, the authors observe that the “jugaad culture” is supported by the business ecosystem — the entrepreneurs, consumers and financial institutions in India. They ask if this approach could be the silver bullet for a global economy characterised by shortages in the face of explosive demand. How can jugaad be scaled up and its principles leveraged on a global scale? If you have an idea, folks in the FCO’s innovation group might be interested!
The authors note that frugal innovation is not only about products but also about business models and services. They cite well-known examples of low-cost heart surgeries and artificial limbs, as well as less-known instances of community-supported geriatric care. Note, however, that these home-grown business models are built on market pull, delivering a product or service demanded by the market, versus pushing a completely new product onto the market. The authors do not analyse from this standpoint, although it would be interesting to know if this is a key differentiator of innovation. Another interesting dichotomy is the use of “frugal” as a defining characteristic of research and development policy in India, versus “plentiful” as the defining R&D goal in the West. A vital difference in perspective?
The authors refer to the growing use of Indian technical knowledge workers through the setting up of global R&D centres by multinationals in India. Although this talent has become a “have to have” for multinationals, the authors observe it is not clear yet how these R&D centres impact innovation in India. However, they do not analyse what potential impact these centres might have going forward as these skilled technology workers start migrating from these high-tech centres and perhaps setting up their own.
The authors find that although Indian research publications have doubled over the decade, most of them are “of below average quality”. As much as 62 per cent of R&D spending is on defence, atomic energy and space research — from which documented examples of frugal innovation are not known. In contrast, pharmaceuticals, an area abounding with examples, accounts for only two per cent. Thus, non-formal and enterprise-driven innovation system seems to score over the formal R&D system. Organised and self-conscious pursuit of frugal innovation in big industry and big science in India is limited to a handful of enterprising leaders.
There is a race for strategic collaboration with India in innovation. There is also a race among investors, who are keeping their eyes peeled for the next black swan or golden goose. The study holds up a mirror to the innovation community in India and tells us something about what those in the race are looking for.
OUR FRUGAL FUTURE: LESSONS FROM INDIA'S INNOVATION SYSTEM