Opportunities of Frugality in the Post-Corona Era

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A discussion paper by Cornelius Herstatt and Rajnish Tiwari on the opportunities of frugality-based approaches in the post-Corona era: How frugal innovations can help achieve “affordable green excellence” in a world that could do with more effective use of resources. They argue that the concept of “affordability” has to be considered more comprehensively and in a multidimensional perspective – not just financially, but also socially, infrastructurally and ecologically.

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The world is undergoing a major societal upheaval. Probably for the first time in the human history large parts of economic activity have come to a standstill simultaneously in almost all parts of the world – affecting the economically advanced nations as much as the developing countries. The “lockdown”, a term not known by many prior to the Corona pandemic of 2020, has meant that populations have been (in some cases literally) forced to stay back at home, cut down on their social contacts due to fear of a community transmission of the COVID19 virus, and as a result international and even domestic and local travel has largely come to a halt.

SARS-CoV-2. Image: CDC/ Alissa Eckert, MS; Dan Higgins, MAM / Public domain

Economic activity has been severally affected in most nations and many people have either lost jobs or have had to reduce their working hours, negatively impacting their disposable income. While, understandably, there is a growing demand for restoring “normalcy”, there are also voices that warn against returning to the “old normal” as if nothing has happened that requires a serious reflection. These voices plead for utilizing the current crisis to develop a “new normal” by utilizing its opportunities, e.g. the unintended-yet-largely-positive environmental impact and the slowing down of the pace of life resulting in reduced stress levels for people who are in a position to better manage social and economic impact of the pandemic.

This discussion paper makes a plea for a more holistic reflection over the causes and effects of the several other urgent challenges facing the world that have been laid bare by COVID19, e.g. climate change, poverty, and diseases. In this current context, we take a closer look at frugal innovations, a concept that has grown in importance over the previous decade and has been known to enable affordable access to goods and services. We examine if and how frugal innovations can be used to develop a “new normal” that acts as an enabler of “affordable green excellence”.

Taking a normative approach, we propose that affordability should be defined in a much more comprehensive manner to includes monetary, societal, infrastructural and environmental affordability. Further, a much closer interaction to the principles of circular economy is proposed. The overlap of frugal innovations and circular economy is the ideal space that should be strived by societal stakeholders, as products that target high environmental affordability without paying enough attention to monetary, societal and infrastructural affordability are as likely to face challenges as are products that are affordable monetarily and in other terms but whose environmental fit is questionable. Policy makers are called upon to create enabling mechanisms to promote affordable green excellence that is required in the post-Corona world even more than it already was prior to the pandemic outbreak.

Note: This discussion paper documents initial ideas with the intention of advancing research on “affordable green excellence”. We invite comments, feedbacks and ideas for collaborative transdisciplinary research/projects from interested colleagues from academia, industry, policy-making institutions and other domains, such as foundations and non-government organizations.

Featured publication: Scope of cooperation between India & Germany in the field of renewable energies with a focus on wind sector

CFI conducted a study on behalf of the Consulate General of India in Hamburg to investigate the potential of Indo-German cooperation in the wind energy sector. Abstract of this study can be found below. The study is authored by Dr. Sadhana Tiwari and Dr. Rajnish Tiwari and was published in February 2019.

Abstract

In 2015, India set itself a very ambitious task of expanding its installed base of renewable energies by more than five times to 175 gigawatt (GW) within seven years (by 2022). It was envisioned that 60 GW would be contributed by wind power. In 2018, the objective was revised upwards to 227 GW in total and 67 GW for wind power. The country needed such challenging goals to ensure an early, universal, and 24×7 access to electricity for all citizens.

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New publication on “Soft Power of Frugal Innovation”

New working paper by Rajnish Tiwari and Jaideep Prabhu: “Soft Power of Frugal Innovation and its Potential Role in India’s Emergence as a Global Lead Market for Affordable Excellence”

In a fruitful cooperation between Center for Frugal Innovation (CFI) and the Cambridge Judge Business School, University of Cambridge, Rajnish Tiwari and Jaideep Prabhu have published a conceptual paper on the potential role of frugal innovations in contributing to “soft power” of its creators.

An edited version of this paper is scheduled to appear as a chapter in a forthcoming book on Indian soft power by the Ananta Aspen Centre (AAC). The paper has been published in the Working Paper series of the TUHH Institute for Technology and Innovation Management. The project was initiated after being requested by the AAC to contribute a chapter to the aforementioned contributed volume in May 2017. The chapter was finally contributed in January 2018 and is now in the process of publication.

Abstract:

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Featured publication: “Made in India for the World”

Made in India for the World: An Empirical Investigation into Novelty and Nature of Innovations

Authors: Daniel Tobias Hagenau, Rajnish Tiwari

Abstract: After an initial introduction into the areas of innovations within emerging markets, the study develops a consistent innovation typology for categorizing large data samples from a variety of existing literature. It then describes and finally evaluates a sample of 178 innovations for the Indian market based on 38 different criteria. It uses internet-based news reports over a 2 year timeframe for the study sample.

TLead Market Indiahe study’s results show a considerable amount of radical innovations and innovations with disruptive potential among the sample and a special concentration on small- and micro-sized innovators from India. It confirms previous suggestions that India is especially focused on innovations within the software and electronics engineering sectors. The results also support the importance of local knowledge and ‘social capital’ for successful disruptive innovation. Finally, a perceivable increase in the technology orientation of innovations by foreign companies suggests a continuous build-up of local technology-competence and foreign trust in the same.

A focus on local competencies and the leading position of India concerning innovative distribution are among the managerial implication of the study. It also opens numerous avenues for future research, expanding both depth and scale of the database as well as the analysis underlying this study.

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[Read the unedited, authors’ version]

Keywords: Frugal Innovation; India; Innovation Typology; Disruptive Innovation; Local Competencies 

Suggested citation: Hagenau D.T., Tiwari R. (2017) Made in India for the World: An Empirical Investigation into Novelty and Nature of Innovations. In: Herstatt C., Tiwari R. (eds) Lead Market India. India Studies in Business and Economics. P. 163-192, Springer, Cham

The featured publications series

With this article, CFI is introducing a new series of “featured publications” with the intention to share its select contributions to the social and scholarly discourse with the broad community. Some of these article have been published in mediums that are not freely available to the public. In such cases, we will seek to provide access to unedited, authors’ versions of the publications, wherever feasible.

New working paper: “The Question of a Frugal Mindset in Western MNCs”

A new working paper by our CFI colleagues Malte Krohn and Cornelius Herstatt looks at “The question of a frugal mindset in western MNCs – exploring an emerging phenomenon with a systematic literature review” (Working Paper no. 103, TIM/TUHH)

TIM-TUHH Working Paper (representational image)

TIM-TUHH Working Paper (representational image)

Frugal innovation in the context of developed ecomomies has witnessed increasing interest in recent years. For Western multinational companies (MNCs) emerging markets represent promising opportunities for growth as well as the threat of new local competitors. Furthermore, economic developments drive the demand for frugal products within Western countries. Succesfully mastering this challenge means that Western MNCs have to challenge prevailing paradigms within their organizations. Literature suggests that these companies have to develop a frugal mindset to succeed in frugal innovation. However, to the best of our knowledge no publication addresses the phenomenon on an empirical basis or provides enough detail for further empirical investigation. To address this gap, we conducted a systematic literature review of 80 publications in the frugal innovation field.

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