Teaser to an article in The Economist (21 Nov. 2012): “Innovative thinking can bring health care to the uninsured billions, argues Devi Shetty, founder and chairman, Narayana Hrudayalaya Hospitals”.
An article on the GE Look ahead blog of The Economist says, “Solar-powered ATMs and other frugal energy projects point the way to a more sustainable global future”. Continue reading
Recently, Prof. Cornelius Herstatt and Rajnish Tiwari, representing the Center for Frugal Innovaions at TIM/TUHH, attended a symposium on frugal innovations and presented a conceptual work on frugal innovations titled “The Frugal Paradigm: Developing a Conceptual Framework for Affordability-Driven Innovations“.
The talk was delivered at the symposium “Frugal Innovation: Ways forward for Concept, Theory and Practice” organized during the recently held 73rd Annual Meeting of the Academy of Management (AOM) from August 9-13, 2013 – Lake Buena Vista (Orlando). The symposium was chaired by Radha Basu, Director of the Frugal Innovation Lab at Santa Clara University, and organized by Preeta Banerjee (Brandeis University), Yasser Ahmad Bhatti (University of Oxford), Sanjay Jain (Santa Clara University), and Shaista E. Khilji (George Washington University). Marc Ventresca (University of Oxford) acted as Discussant of the papers presented at the symposium, which consisted of:
- Conceptualizing and Operationalizing Frugal Innovation
By: Yasser Ahmad Bhatti (University of Oxford)
- Frugal innovation and Disruptive Innovation Theory
By: Sanjay Jain (Santa Clara University)
- The Frugal Paradigm: Developing a Conceptual Framework for Affordability-Driven Innovations
By: Rajnish Tiwari and Cornelius Herstatt (Hamburg University of Technology)
- The Practice of Frugal Innovation in Healthcare and IT
By: Preeta Banerjee and William J Oliver (Brandeis University)
- Frugal Solutions: Lessons from Practice
By: Peter Hesseldahl (Universe Foundation)
The symposium was well attended and followed by a meeting of the core team of organizers / presenters / discussant and some interested participants from the researcher community that included Aditi Ramdorai (Hamburg Univesity of Technology), Jody Johannessen (Zayed University, Dubai), and Ronny Reinhardt (Dresden University of Technology). The participants agreed to foster the research on frugal innovations through intensified collaboration. Need was felt was creating an exchange platform such as a blog, that would enable the frugal innovation community to share and disseminate ideas and information about research and upcoming events. One of the next events is a symposium on frugal innovations set to be held on the 18th and 19th of November in Hamburg, Germany. This symposium will have two tracks (an academic one on the 18th, and a practitioner one on the 19th) is being organized by CIF. More details to follow on this. For any queries, please feel free to contact Rajnish Tiwari.
Lessons from low-cost healthcare innovations for the Base-of the Pyramid markets: How incumbents can systematically create disruptive innovations
Frugal innovations, characterized by their focus on affordability and retaining key functionalities of products/services, are emerging in the healthcare sector from India- ranging from low-cost healthcare delivery by hospitals like Aravind Eye Care that provides cataract surgery to around 300,000 patients at a cost of 18 USD per patient to product innovations such as the Jaipur Foot, a low-cost prosthesis. These frugal innovations represent disruptive innovations, innovations that are typically simpler, more convenient and more affordable. Disruptive innovations create growth potential for companies while opening up access to products and services that were previously beyond peoples’ reach. Low-income markets or Base-of-the-Pyramid [BOP] markets present new opportunities to Multi-National Corporations [MNCs] and scholars are calling MNCs to leverage BOP markets to create disruptive innovations.
Established incumbents generally fail to successfully commercialize disruptive innovations. Their internal processes and values force them to focus on their existing customers, thereby ignoring projects targeted at new emerging markets that lack a customer base.
An exception to this is the American incumbent GE Healthcare, which has been creating several low-cost innovations targeted at emerging markets for the past years. In this research, we will look at organizational structures and processes that GE Healthcare has in place, which enables it to create disruptive innovations systematically. With this we hope to contribute towards building disruptive innovation theory, where questions pertaining to selective success and failure of incumbents to create disruptive innovations remain unanswered. Literature on disruptive innovations recommends incumbent firms to create a separate entity for commercializing disruptive innovations. However, scholars have been calling upon firms to explore new markets and exploit existing opportunities simultaneously.
The ability to successfully drive disruptive innovations from within the organization will be analyzed through the lens of organizational ambidexterity. Ambidexterity is the ability of organizations to successfully balance exploration and exploitation. The manifestation of this act of balancing exploitation and exploration is the companies’ ability to initiate multiple innovation streams, in this case sustaining innovations and disruptive. Key proponents of organizational ambidexterity, O’Reilly and Tushman, consider it a “solution to the innovator’s dilemma”, however present their thesis only conceptually. This work will look at the mechanisms of ambidexterity at GE Healthcare to help explain its ability in successfully hosting sustaining and disruptive innovations from within its boundaries.
A forthcoming publication on the emergence of a lead market for frugal products in India:
Springer Verlag, Series: India Studies in Business and Economics
(2014, Approx. 180 p. 42 illus.)
Hardcover edition (ISBN 978-3-319-02065-5, Due: December 31, 2013)
E-book edition (to be available shortly, ISBN 978-3-319-02066-2)
About the book
- Critical analysis of today’s dominant logic and extension of lead market paradigm
- Delivers new assessment tools for identifying emerging lead markets
- Explores opportunities for frugal innovations and their constituent characteristics
- Detailed analysis of a sunrise industry in India
Content Level » Research
Keywords » Automotive Industry – Frugal innovations – Indian economy – Innovation systems – Lead markets