Frugal entrepreneurship: Resource mobilization in resource-constrained environments

Abstract

Frugal entrepreneurship (FE) is a recent pursuit that has evolved from the frugal innovation (FI) concept. How frugal entrepreneurs mobilize resources is both interesting and novel, yet it remains an underresearched area. The objective of this study is to explore how frugal entrepreneurs mobilize resources at the grassroots level of emerging markets to realize their innovation and entrepreneurial aspiration. Based on six cases of frugal enterprise, this study contributes to the FE literature in particular and FI more generally. We reveal the various resources that frugal entrepreneurs mobilize and how they mobilize them in three broad categories, namely, human, social and financial. Unlike other entrepreneurs, frugal entrepreneurs usually possess manual work skills, and they help each other with their technical, financial and other knowhow. They understand their context and culture and consider them deeply when developing frugal solutions. Indeed, frugal entrepreneurs integrate the culture and context into their innovation process, because they themselves are embedded in the same society. Patents do not help entrepreneurs to protect their innovations, however, and they need to rely more on informal rather than formal finance.