Frugal Innovation: Keep it simple

Frugal Innovation – a definition

Frugal can be described as “plain, simple or modest”. The goal of frugal innovation is to focus only on basic components. In doing so, one does not focus on the innovation performance itself, but on the requirements and the users or target group of the innovation. A frugal solution is therefore simple and reliable to use and thus meets customer needs much better. On the one hand, production is more resource-efficient, and on the other hand, the result can be offered at a favourable price. Frugal innovations are therefore more often found in developing and emerging countries. This is because people living there have a lower income than people in industrialised countries.

But frugal innovation does not only take place there and does not only have to refer to a product itself. The approach is also becoming more and more popular in industrialised countries and entire business models can be subjected to the concept. The Swedish furniture company IKEA and the hotel chain Motel One are good examples of frugal innovation. Apple is also using the frugal idea with the different variants of the iPhone 12. Because the more target groups can be addressed, the larger the customer base and the market share. Starting with the concentration on the basic components, the frugal idea continues to a more local and shorter value chain. Frugal innovation is therefore not limited to one industry or one specific sector, but is possible everywhere – in line with the motto “Keep it simple” or “More from Less”. Digitalisation is taking the concept to a new level.

Try out Frugal Innovation with AnyIdea.
Ask employees for ideas or selected customers which features of the product/service are most important.

How to develop a frugal innovation?

The assumption of companies often deviates from the wishes and needs of consumers. They want a functioning product or a flawless service that does the job and nothing more. This is where frugal innovation begins – functional, user-friendly and local.
In concrete terms, frugal innovation of a product or service means the following:
Remove features that are not part of the basic functionalities
Make materials, design or processes more environmentally friendly or local, e.g. re- and up-cycling
Adapting already existing resources, e.g. reusing instead of making new things
Add new features only through minimal changes, e.g. software updates
Simplify complicated, expensive or time-consuming parts or processes
Additionally adapt the business model to reduce costs
Build an ecosystem in the sense of open innovation, e.g. by involving consultants, experts, researchers, organisations, etc.
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