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.
Ask employees for ideas or selected customers which features of the product/service are most important.