Creative Problem solving in the face of extreme limits

One of our favorite buzzwords these days is “frugal innovation:” The ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.

In one of our favorite recent TED talks, Navi Radjou (co-author of the best-seller, Jugaad Innovation, fellow at Judge Business School, University of Cambridge, and member of the World Economic Forum’s Global Agenda Council on Design Innovation) shows us how, across emerging markets, entrepreneurs and companies are adopting frugal innovation on a larger scale to cost-effectively deliver healthcare and energy to billions of people who may have little income but very high aspirations.

For the past seven years, I have met and studied hundreds of entrepreneurs in India, China, Africa and South America, and they keep amazing me. Many of them did not go to school. They don’t invent stuff in big R&D labs. The street is the lab. Why do they do that? Because they don’t have the kind of basic resources we take for granted, like capital and energy, and basic services like healthcare and education are also scarce in those regions. When external resources are scarce, you have to go within yourself to tap the most abundant resource, human ingenuity, and use that ingenuity to find clever ways to solve problems with limited resources.

In India, we call it Jugaad. Jugaad is a Hindi word that means an improvised fix, a clever solution born in adversity. Jugaad solutions are not sophisticated or perfect, but they create more value at lower cost. For me, the entrepreneurs who will create Jugaad solutions are like alchemists. They can magically transform adversity into opportunity, and turn something of less value into something of high value. In other words, they mastered the art of doing more with less, which is the essence of frugal innovation.

Lessons in entrepreneurship from emerging markets

In rich and inspiring detail, Radjou describes how frugal innovators in the global South, in places like Kenya, China, Bangladesh, and Nairobi are actually catching up and in some cases even “leap-frogging the North.”

Instead of building expensive hospitals, China is using telemedicine to cost-effectively treat millions of patients, and Africa, instead of building banks and electricity grids, is going straight to mobile payments and distributed clean energy.

Why the North’s “more-for-more” innovative model needs to change

Spending billions of dollars investing in R&D, using tons of natural resources to create ever more complex products to differentiate their brands from competition, and then charging customers more money for new features…. Radjou points out the reasons why this more-for-more model is increasingly unsustainable.

The prolonged economic crisis in the West is making people think that they are about to lose the high standard of living and face deprivation. I believe that the only way we can sustain growth and prosperity in the West is if we learn to do more with less.

Radjou goes on to give inspiring examples of Western companies and creative entrepreneurs who are leading the way in coming up with frugal innovation solutions that address basic needs in the U.S. and Europe.

Frugal innovation is also about making high tech more affordable and more accessible to more people

How to adopt a frugal innovation approach: 3 principles

  1. Keep it simple. Don’t create solutions to impress customers. Make them easy enough to use and widely accessible.
  2. Do not reinvent the wheel. Try to leverage existing resources and assets that are widely available.
  3. Think and act horizontally.

Transcending the North-South divide

The South pioneered frugal innovation out of sheer necessity. The North is now learning to do more and better with less as it faces resource constraints.

As an Indian-born French national who lives in the United States, my hope is that we transcend this artificial North-South divide so that we can harness the collective ingenuity of innovators from around the world to co-create frugal solutions that will improve the quality of life of everyone in the world, while preserving our precious planet.

Listen to the complete TED Talk here.