If an optimist sees the opportunity in every difficulty, then the developing world must be filled with optimists. There, people have learned to get more value from limited resources and find ways to reuse what they already have, it is called frugal innovation. For example, in India, potter Mansukh Prajapati has created a fridge made entirely of clay that uses no electricity and can keep fruits and vegetables fresh for many days — it is, quite literally, a cool invention. In Africa, if your cell phone battery runs low on power, you can often find resourceful entrepreneurs who’ll recharge it with their bicycle.
Frugal innovation can be low tech, like the clay fridge in India, but it can also be about using high tech to make services more affordable and more accessible to more customers. Since 2007, I’ve met with and studied hundreds of amazing entrepreneurs in the global South — in India, China, Africa and South America. Many of them didn’t go to school, and they did not come up with their inventions in big corporate R&D labs. Because they don’t have many of the basic resources we take for granted, like capital and equipment, and healthcare and education are also scarce, the street is their lab. However, frugal innovation is not simply about making do; it’s about making things better.
Across emerging markets, some companies are taking these kinds of innovations and implementing them on a larger scale to help billions of people who may have low incomes but high aspirations. In Kenya, half of the population uses M-PESA, a mobile payment solution. This is greatly needed in Africa because 80 percent of people don’t have a bank account but roughly 82 percent have a mobile phone. What’s even more exciting is that M-PESA has become the source of other transformative business ideas in other sectors, for instance M-KOPA “a home solar energy solution”.
Is it happen in developed nations?
Frugal innovation is diametrically opposed to the way we innovate in the North. I live in Silicon Valley in California, where most businesses keep chasing the next big thing. Companies spend billions of dollars investing in R&D and use tons of natural resources to create ever more complex products — think of the iPhone 5, 6, 7, and eventually 8, 9 — to differentiate their brands from the competition and charge customers more money to get new features. I’d describe the conventional business model as more-for-more.
Unfortunately, this more-for-more business model is becoming obsolete for three reasons. First, a big portion of customers can no longer afford expensive products, due to diminishing purchasing power. Second, we are running out of natural resources, namely water and oil. And third and most important, the growing income disparity between the wealthy and everyone else has led to a big disconnect between existing products and services and customers’ essential needs.
The only way we can sustain growth and prosperity in the North is if we learn to do more with less. The good news is that’s starting to happen. The frugal innovation revolution is being led by creative entrepreneurs who are brainstorming amazing solutions to common problems in the US and Europe. Silicon Valley startup Thrive makes wireless sensors that look like plastic rulers — farmers can stick them in different parts of their fields and collect detailed information about soil conditions. The company Be-Bound, also based in Silicon Valley, has created a device that enables people to connect to the Internet even in no-bandwidth areas where there’s no Wi-Fi, 3G or 4G. It uses SMS, a basic technology that is the most reliable and most widely available around the world. Four billion people today cannot access the Internet, but this solution can give them Internet access in a low-cost way.
It would be wonderful to see developed and developing countries work together to co-create frugal solutions that benefit all of humanity. That’s beginning to happen. Nairobi has horrendous traffic jams, the kind that make you say, “Holy cow” — because you have to dodge cows as well as vehicles when you drive. To ease congestion, engineers at the IBM lab in Kenya have piloted a solution called “Twende Twende” (meaning “let’s go” in Swahili), which was initially designed by Japanese engineers. Twende Twende doesn’t rely on roadside sensors, which are too expensive to install in Nairobi. Instead the technology processes images, collected from a small number of low-resolution webcams in the streets, uses analytic software to predict traffic points, and text messages drivers with alternate routes to take. While Twende Twende is not as sexy as self-driving cars, it can take Nairobi drivers from point A to point B at least 20 percent faster — and could be used in other cities.
Human creativity is a natural, infinitely renewable resource and it’s coming up with smart, cheap solutions to people’s biggest problems – Navi Radjou (co-author of the book Frugal Innovation)
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