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Frugal Innovation: Challenge and opportunity for India

Nesta, the UK Foreign Office Science and Innovation Network, Research Councils UK and the UK-India Education and Research Initiative have just published the results of their research on innovation in India earlier this year.
The study: Our Frugal Future: lessons from the Indian innovation system, highlights ten examples of frugal innovation in India.
We bring you edited extracts from the 94 page report by Kirsten Bound and Ian Thornton. You can download the full report from the link provided at the end of this Special Report.

Innovation has raced up the Indian Government’s agenda in recent years, and the President has declared the next ten years the ‘Decade of Innovation.’ Yet at first glance, recent developments in India’s innovation ecosystem appear not to have kept pace with its explosive economic growth.
India’s science budget has grown at 25 per cent a year for the last five years but expenditure on R&D remains under 1 per cent of GDP. India’s record of scientific publications lags behind that of China, and the gap is widening: over the same period as India’s scientific output doubled, China’s grew by seven times. However, while these input-output metrics are a useful way ofbenchmarking research excellence, they don’t capture all of what is important about Indian innovation, and miss the distinctive models and approaches to innovation of very different systems. 

Traditional metrics also miss what this research uncovered as a distinctive specialism of the Indian system: frugal innovation. Combined with deepening scientific and technological capabilities, this could be an important source of competitive advantage for India, and is an overlooked opportunity for strategic collaboration with the UK.
Frugal innovation is distinctive in its means and its ends. Frugal innovation responds to limitations in resources, whether financial, material or institutional, and using a range of methods, turns these constraints into an advantage. Through minimising the use of resources in development, production and delivery, or by leveraging them in new ways, frugal innovation results in dramatically lower–cost products and services. Successful frugal innovations are not only low cost, but outperform the alternative, and can be made available at large scale. Often, but not always, frugal innovations have an explicitly social mission.
Examples of frugal innovation are found throughout the Indian system: from Dr Devi Shetty’s path– breaking model of delivering affordable heart surgery, to efforts to crowdsource drug discovery driven by government labs, to Bharti Airtel’s approach to cutting the cost of mobile phone calls, to the Keralan approach to palliative care which is providing access to support at the end of life for thousands in a void of formal healthcare.

What is frugal innovation?
As we noted in the introduction, frugal innovation is a distinctive approach to innovation, distinguished both by its means and its ends:
Frugal innovation responds to limitations in resources, whether financial, material or institutional, and turns these constraints into an advantage. Through minimising the use of resources in development, production and delivery, or by leveraging them in new ways, frugal innovation results in dramatically lower–cost products and services. Successful frugal innovations are not only lower in cost, but outperform the alternative, and can be made available at large scale. Often, but not always, frugal innovations have an explicitly social mission.
The Narayana Hrudayalaya story is a striking example of frugal innovation, an approach to innovation that has emerged as a distinctive strength of the Indian innovation system, and one that is increasingly relevant to policymakers and businesses around the world. As befits a medical facility in one of the most populous nations on Earth, the sheer scale of the operation is impressive. Founded in 2001 with 1,000 beds, in 2009 the biggest cancer hospital in the world opened on the same site. Shetty has plans for 25,000 new beds across India in the next five years. It’s a striking reminder of the scale of the market for innovation in India. At the same time, Shetty’s success is about more than volume: it has also involved a wholesale remodelling of the hospital care system. The Group run their own training (surgeons operate on a thousand pigs’ hearts before touching a human heart), a State–wide health insurance scheme, and are moving to designing their own consumables. Specialist surgeons’ time is spent only on the most complex tasks, with others doing all their preparation and paperwork.

One of the best known examples of frugal innovation is the Jaipur foot. The original Jaipur foot was developed in the 1960s by a temple sculptor frustrated with the lack of an affordable supply of prosthetic limbs. Costing up to $12,000, existing models were completely unobtainable for the majority of the Indian population. Using rubber, wood and tyre cord, he designed and manufactured a prosthetic foot for under $45 that had far greater functionality. The Jaipur version improved movement, but also cultural suitability: it has a lifelike foot so could be worn without shoes, it enabled squatting, sitting cross–legged, walking on uneven terrain and even withstood being immersed in water for long periods while its owner tended to his rice paddies.

Kerala’s Neighbourhood Network in Palliative Care involved an entire rethink of the delivery system for social care. Often, the radicalism of frugal innovation comes not from the products and services themselves but from the root and branch methods by which innovators enable access to them at large scale. While at a national level only 1 per cent of the population have access to palliative care, in Kerala the figure is 70 per cent. The network consists of more than 4,000 volunteers, with 36 doctors and 60 nurses providing expert support and advice to enable care for 5,000 patients at any one time. All the doctors and nurses in the network are employed by the community initiatives. More than 90 per cent of the resources for the projects are raised from local community donations of less than 15 cents 

With the Tata Nano, meeting the price target set by Ratan Tata meant the design team had to start from scratch. A key strategy was to ‘de–feature’ unnecessary attributes – to the extent of providing only one wing mirror and only three wheel nuts per wheel. Yet this simplification was in fact a very complex operation. The car is the product of a considerable global network of relationships. By contrast, SELCO, a company which is making solar power a feasible option for the rural poor, is an excellent example of creating an entirely new service ecosystem around a
product.19 The conventional policy response to widening access to solar power had been to treat it as a product, with banks subsidised by the government to give loans to customers for purchasing solar panels. But according to SELCO founder, Harish Hande, the ‘pro–poor’ promise of the approach was rarely fulfilled in practice.

As multinational research becomes increasingly networked companies which have previously set up R&D centres in India to adapt Western products for the Indian market are increasingly realising that the conditions for innovation in India are conducive to creating products that could disrupt global markets. One striking example is General Electric’s MAC 400 Electrocardiograph (ECG) machine. GE Healthcare’s engineers were set a formidable challenge: take a hefty ECG machine that cost $5.4 million to develop28 and squeeze the same technology into a portable device that could reach rural communities. They were also charged with developing the new product in 18 months, and with a budget of just $500,000. With such a stretching target and tight resources, the engineers combined their technical know–how with creative tweaks of off–the–shelf parts. For example, the machine’s printer is an adaptation of one used in bus terminal kiosks across India. The MAC 400 cost $1500, instead of the $10,000 of its predecessor.

NESTA ( www.nesta.org.uk  ) is a registered charity an the UK’s innovation foundation
Download full report here
: www.nesta.org.uk/indian_innovation  
July 23 2012




    


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