Reverse innovation or ‘frugal’ innovation is a new and very popular form of innovation. It combines low costs and latest technologies to become tough products that are easy to use.
Moreover, frugal often means less impact on the environment.
As a matter of fact, this constraint-based innovation takes the needs of poor consumers as a starting point. They stress the bare essentials rather than adding more bells and whistles. So I think it’s clear that this kind of innovation is very budget-minded.
Companies are forced to accept thin profit margins to reach more customers. Of course, a cost reduction is indispensable. Therefore, several methods can be used: from outsourcing more work to applying mass-production techniques. Perhaps, a combination of different methods would be most successful.
Recent studies have proven that the amount of frugal products on the market is growing quickly. China and India in particular, are using this sort of innovation frequently. In those countries, most frugal innovations are produced to face health problems such as heart diseases, contaminated water, etc.
Another type of innovation that is very popular, especially in China, is called ‘bandit’ innovation. Talented innovators abuse the weak property rights to produce legal copies of high-tech innovations. In that way, they attempt to reach a bigger target group than their legitimate opponents.
I am firmly convinced that this way of innovation will know great success. Blog entries such as ‘biofuel made by whisky products’ and ‘bubble-maker receives innovation award’ show that this kind of innovation is already penetrated in a few industries.
Lennert Thomas
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