Frugal innovation

Co-author of recently published book ’Jugaad Innovation’, Professor Jaideep Prabhu argues that a frugal and flexible approach to innovation can generate breakthrough growth not only in the developing world but also in the West.

Innovation is a major imperative for companies and governments worldwide. But post-downturn we can’t solely rely on the tried-and-tested formula which has sustained innovation efforts in the West for decades: highly structured R&D processes that result in expensive top-down projects. Instead, how can we do more for less, while serving broader markets?

One solution is for the West to look to places like India, Brazil and China for a new, flexible approach to innovation - to the activities of individuals like Mohan, a resourceful innovator in Chennai, India, who has created a highly frugal and effective solution to a major public health problem. Or Harish Hande from Bangalore, India, whose Solar Electric Light Company (SELCO) offers affordable, sustainable lighting solutions for those who live outside the electricity grid.

Despite their remarkable work, such individuals are not an exception. Emerging markets are teeming with frugal and flexible innovators like these. In the nearly four years that my co-authors and I have been researching the phenomenon of jugaad (a Hindi term that roughly translates as ’overcoming harsh constraints by improvising an effective solution using limited resources’), we have encountered hundreds of entrepreneurs in resource-constrained circumstances worldwide who have innovated in areas as diverse as health care, education, financial services, energy and entertainment.

The self-expanding diabetes clinic

India has the dubious distinction of being the diabetes capital of the world. In many cases, rural patients don’t know what diabetes is, let alone that they may be suffering from it. Even when they do know, the lack of good rural health care means travelling to distant cities and taking time away from work to get the necessary medical attention. Given that 70% of India’s 1.2 billion people live in villages, this situation has all the makings of a public health disaster.

Enter Mohan, Director of the Madras Diabetes Research Foundation and Chairman of Mohan’s Diabetes Specialities Centre in Chennai, capital of the South Indian state of Tamil Nadu. Deeply concerned about the consequences of a looming public health crisis, and aware of India’s socioeconomic realities, Mohan engaged in a frugal and flexible piece of thinking: what if physicians could remotely consult patients without either group having to travel?

After much trial and error, he brought to life a mobile clinic, housed in a satellite-enabled van, which visits some of the remotest parts of Tamil Nadu and links urban doctors to rural patients and community health workers. The van has telemedicine technologies to conduct diagnostic tests and transmit them via satellite even from areas too remote for internet connectivity. From their offices in Chennai, Mohan and colleagues can see and communicate remotely, in real time, with rural patients through video monitors, while tests such as retinal scans are transmitted within seconds for immediate evaluation.

To avoid straining the frugal business model, improvisations were made such as partnering with the Indian Space Research Organization to obtain free satellite for his telemedicine service, and recruiting young volunteers from small towns to run most of the operations in the mobile clinic. Already Mohan and colleagues have screened more than 50,000 people across over 40 villages in Tamil Nadu and provided treatment to thousands of patients.

Here comes the sun

Providing lighting to rural homes in India is also a challenge. Over 40% of India’s population live outside the electricity grid and many have to rely on kerosene lamps for lighting. Kerosene is expensive and not always available, and produces a poor quality of light and unhealthy fumes.

Harish Hande saw this problem as a potential opportunity for jugaad innovation. In 1995, he founded SELCO to provide affordable solar energy to India’s rural poor. To do so, he had to rethink how he financed his business, priced his services, and distributed and maintained his solution.

He started with $30 seed money. Banks were hesitant to lend and venture capitalists deemed his unproven business model too risky to invest in. So Hande bootstrapped SELCO: he used the $30 to buy his first solar home lighting system, which he then sold. With the revenues, he purchased additional systems, which he also sold, and so on.