frugal innovation


Being budget minded, focused on simplicity, challenging of the design & the processes and being aware of the implications of huge market sizes. Focus on customer.

“The term is quite commonly used in countries such as India or China to describe a specific kind of innovation which takes great care to minimise costs of innovation and cost of final product.

“Frugal innovation is not just about redesigning products; it involves rethinking entire production processes and business models. Companies need to squeeze costs so they can reach more customers, and accept thin profit margins to gain volume. Three ways of reducing costs are proving particularly successful.”

  • Contract out more work
  • Use existing technology in imaginative ways
  • Apply mass-production technique in new and unexpected areas

The Economist’s special report on innovation in emerging markets

Jeff Bezos;

Q: The company has a reputation for frugality. Does that apply to the way you innovate?
A: I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out. When we were [first] trying to acquire customers, we didn’t have money to spend on ad budgets. So we created the associates program, [which lets] any Web site link to us, and we give them a revenue share. We invented one-click shopping so we could make check-out faster. Those things didn’t require big budgets. They required thoughtfulness and focus on the customer.


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