Frugal Innovation sounds like something your grandparents or great grandparents would say. They were children of the Great Depression and wars which left the world resource-poor and economically damaged. Looking around the marketplace today, we see a world ravaged by a global health crisis and two successive recessions a little over a decade apart. Consumers worldwide are looking for different and more affordable solutions for their needs. Frugal Innovation sounds like something we should all be saying and here’s why.
Impact Hub Vienna defines it as an innovation process resulting in “high-quality, resource-light and affordable products and services in response to the specific needs of a target group. They address issues that are often underserved, through resource-efficient solutions that are affordable and easily available.”
In essence, this means Frugal Innovations provide radically affordable products to a large number of consumers in previously untapped markets. They require gaining an in-depth understanding of the requirements of the target market to provide a product or a service that is specifically needed, with quality and cost in mind. While these innovations must keep the needs of the consumer first and foremost in their development and sales, they can also have significant impacts on the environment.
Frugal Innovation in Practice
Austrian companies working with partner organizations have been active in the field of Frugal Innovation for more than a decade. Helioz, founded by Martin Wesian and supported by the Austrian Development Agency (ADA) and the Austrian Research Promotion Agency (FFG), provides a low-cost solar water purification system to many households throughout the continent of Africa. The company got its start after Wesian suffered from cholera while travelling in Venezuela and drinking contaminated water. He started looking for solutions and found one which was inexpensive and easily deployable, solar water disinfection. Now his UV measurement device is used in households across Uganda and Kenya to provide safe drinking water. They work with designers and social scientists, at home and abroad, to ensure their products are adopted by the largest number of households in their target markets.
It should be noted, not every solution in the field of Frugal Innovations requires advanced engineering knowledge. Bosnia Grows Organic has been leasing land from Bosnian families to grow organic medicinal herbs. The team cleared the debris from unused arable land and took soil samples to determine what herbs would best grow in specific locations. The project, also funded by the ADA, came about after Ivana Stjepanovic had a discussion with her sisters about returning to Bosnia and their memories of organic farming before the country was torn apart by war. The company aims to return the land to the families after the end of the lease, more valuable than when they received it; creating farmable land once more. The project wants to help Bosnia develop economically by providing help and expertise to support what was once a flourishing organic farming industry. And, with the help of Austrian organic farmers, they are doing just that.
Frugal Innovation as the Answer to Consumer Demands for Affordable Quality Products
In the current economic climate of high job losses and the threat of whole sectors of economies going under, Frugal Innovation can and must apply globally. In the article “Relevanz und Potenziale frugaler Innovationen für Österreich” the authors, Rajnish Tiwari, Stephan Buse, Katharina Kalogerakis, Jakob Scheitza and Cornelius Herstatt, as the title suggests, discuss the relevance of Frugal Innovation for Austria, from the perspective of selling to the Austrian consumer and abroad. Their example is older consumers and technology. “Many users, especially senior citizens, feel overwhelmed by the (avoidable) hyper-complexity of technical solutions. They desire simpler and more robust products, and see the practice of planned obsolescence skeptically”, the authors state. This statement applies to any consumer who does not want to spend money on the latest cell phone model, regardless of the size of the marketing campaign and has managed their fears of missing out. Other consumers “are utilizing frugal products and business models (…) there is a growing trend in certain sections of the society for voluntary simplicity and more moderate lifestyles”.
In other words, there is an emerging consumer who would like to spend less and save more but still have access to quality products. And in still another case, there is the conscious consumer who wants something affordable, durable, and of high quality to last several years so they are not substantially increasing their ecological footprint with the purchase of a new product. It is through these consumers that the authors of this article specifically tie in the Sustainable Development Goals (SDGs), “ecological considerations necessitate a significant reduction in the consumption of finite and depleting natural resources, globally. Engaging in frugal innovations, therefore, contributes positively to achieving the Sustainable Development Goals”.
What does all this mean for a social entrepreneur, the SME, the tech-savvy start-up, or the subject matter expert? Well, it means new markets are developing both locally and abroad. Consumer profiles are changing and entrepreneurs from Austria and the Western Balkans are well-placed to break onto the scene with novel solutions, inside and outside their borders.
New Funding Opportunities for Frugal Innovations
The “Innovation for a Better World: Advanced Solutions for Sustainable Development” project is here to help organizations navigate these dynamic markets and through funding. The project is a pilot funding scheme on frugal innovation jointly developed by ADA and FFG to help organizations from Austria and the Western Balkans make meaningful contributions to the Sustainable Development Goals.
Implementing partner Impact hub Vienna is organizing three online information sessions on October 8, October 29, and November 19, 2020, for organizations and individuals who would like to learn more about the project. Each of the three events focuses on one theme that was selected after a series of interviews with stakeholders from the Western Balkans and Austria.
Join the online information sessions to learn about frugal innovation and its potential for the region, find out more about the project and funding opportunities, ask questions to representatives of ADA and FFG, get feedback on your project ideas, and network with potential partners in Austria and the Western Balkans.