Frugal innovation in the midst of societal and operational pressures

Abstract

To respond to both global sustainability challenges and grassroots level needs in emerging markets with innovative solutions, firms need the capacity to operate under societal and operational pressures and skills to blend local knowledge with other forms of expertise. Frugal innovation considers societal and operational challenges as starting points for innovative solutions that could serve as drivers of sustainable development. Prior research, however, has done little to understand firm level requirements to set-up a frugal innovation-based business. In this article, we established a link between frugal innovation and the sustainable business model concept. More specifically, the research questions are: 1) How do societal and operational pressures together influence business activities and 2) how can these pressures be assessed analytically? We present an analytical framework that can be used in assessing frugal innovations for long-term sustainability and we demonstrate the functioning of the framework with the empirical analysis of three case firms. Our findings show that the sustainability outcomes of frugal innovations often depend more on their business models than on their technological innovativeness. We point out that positive sustainability outcomes may become possible when the societal sustainability concerns and the operational concerns become interlinked activities in specific business model elements.