RI Columns Chapter 4

A frugal success story: M-PESA

Imagine half of a country is living below the poverty line and isn’t able to pay for the goods and services they potentially can afford. How could innovation tackle this issue? M-PESA shows.

Imagine half of a country is living below the poverty line and isn’t able to pay for the goods and services they potentially can afford. How could innovation tackle this issue? M-PESA shows.

M-PESA Logo

Kenya is a developing country in East Africa and borders Tanzania, Uganda, Ethiopia and Somalia, countries living in extreme poverty. On the contrary, Kenya is showing long-term economic growth due to its investments in infrastructures’ sustainability and improvements in governance and public-sector capacity. A country that is likely to escape its neighbors’ poverty, still nearly half of the 45 million inhabitants is living in it [1]. One of the reasons of the countries poverty is the lack of financial institutions and services, together with its poor infrastructure keeping the poor in poverty. By this, they cannot send money to family in debt, buy goods and services and invest in education and health, leading to a great decrease in the countries potential growth.

2007 was the year that tackled this problem. Kenya’s largest mobile network operator Safaricom launched in this year M-PESA, a money-transfer and microfinancing service for mobile phones, allowing mobile phone owners to easily transfer money to other M-PESA and non M-PESA users, pay bills and purchase mobile airtime credit [2]. Its fast growth of subscribers in Kenya to 17 million in 2011 haven’t gone unnoticed. Many other countries from various parts of the world have implemented M-PESA since its success [3]. Vodafone’s development of the M-PESA service has contributed a lot to the economic and social development of Kenya by serving the wishes of the Bottom of the Pyramid (BoP) customers.

Figure 1. M-PESA's contribution to total revenue (red line)

 

As a frugal innovation, M-PESA shows that the wishes of these customers weigh very heavily in innovations’ and technologies’ market success in developing countries. Then how can it be that still many Western multinationals believe, as Cees van Beers, professor of Innovation Management at Delft University of Technology, mentioned in his web lecture ‘Frugal Innovation: a business perspective’, that limited purchasing power of the BoP customers cannot be translated in profitable opportunities? M-PESA is now facilitating 10% of Kenya’s Gross Domestic Product! Profitable opportunities cannot only be subscribed to the purchasing power of customers. No! It’s the art to design and innovate such a product or service that fulfils the wishes of the consumers, lowers the price and still ensures the quality. Also the second misconception of Western multinationals that there is no room for high technology firms in low technology markets is a great one. Vodafone, a large Western mobile network operator, developed the M-PESA currency system for the Kenyan market and it has become a big success! The art is not to compete with low-technology markets but to look for societal issues not yet tackled by current technologies (so creating new markets). The third conception that serving BoP costumers is considered as exploitation of the poor isn’t right either. On the contrary, M-PESA helps BoP costumers paying their bills and investing in education and health, escaping the downward spiral of not being able to finance necessary goods. Frugal innovations can thus fight poverty instead of creating it.

When you think about an African country like Kenya, you probably won’t believe everyone has got a mobile phone. Well, from now one do so, because currently 93% of the Kenyan population has one [4]! M-PESA is thus really of benefit, creating the opportunity of monetary exchange and thus contribute to the countries’ monetary system, while it’s cheap for the customers. However, if M-PESA wants to keep its Kenyan market share, it has to keep improving the currency system. The monopolist it has been for more than 5 years can now count on competition due to arising mobile network operators like Finserve Africa and Mobile Pay [5]. The government has to regulate all this in order to protect BoP’s wishes. Although there have been big investments in governance and public-sector capacity, corruption in Kenya is still a large problem. Regulating the Kenyan mobile sector will thus be a great challenge.

 

Sources

[1] http://www.ruralpovertyportal.org/country/home/tags/kenya

[2] http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22551641~pagePK:146736~piPK:146830~theSitePK:258644,00.html

[3] https://en.wikipedia.org/wiki/M-Pesa

[4] http://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-5988

[5] http://fortune.com/2014/06/27/m-pesa-kenya-mobile-payments-competition/

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From CleanTech to FrugalTech

Introducing the SolarBag

Introducing the SolarBag

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5 years ago I came across a start-up company called Puralytics. They created a plastic bag that not only filters, but also purifies water. By that time they were just a small garage company, but today they are a big company that creates mainly water purification systems.

So how does it work? You fill a SolarBag with 3.5 liters of water from any source. This can be from rivers, ponds or ground water. You pour the water through a pre-filter that takes out all the large materials, like sand, twigs and insects. Then you leave the bag in the sun, so the sunlight cleanses the water. The sunlight (UV-light) reacts with a nano-technology coated mesh that breaks down toxics on a molecular level. In this table you can see what toxics the SolarBag cleanses compared to other water cleansing techniques.

On a sunny day the bag needs about 3 hours to purify the water. On a cloudy day it need about 6 hours. The bag can be used about 500 times, before the purification process becomes less effective.

Water is a serious issue in third world countries. What most of these countries also have in common is  the high amount of sunshine during the day. This innovation is perfect for people in poor regions that don’t have access to clean water. Rivers are full of pollution that causes diarrhoea which kills a lot people due to lack of rehydration. The SolarBag can provide these people with clean water that they can carry around. One shipping pallets of SolarBags weighing over 250 pounds can deliver 1.5 million litres of water. It would take a C-130 cargo plane full of bottled water to deliver that much water. This makes the SolarBag also applicable for another scenario.

After a natural disaster, the damage to water infrastructures cause a lack of drinking water for the people. However, there is usually polluted water available. Instead of bring bottled water to the affected areas, SolarBags would be a much cheaper and more efficient option. In most areas water is still around after a disaster, but this water is polluted. The SolarBags can be used to clean and provide water for a longer period. The red cross already uses these bags, but other humanitarian aid organisations could also use them in to a larger extend.

Another great thing about this product is that it is not only for the poor or needy people. You and I can also make great use of this product. I love camping and I want to do more wildlife camping in the future. Instead of packing litres of water, I just need one bag. I can even carried the water in a SolarBag around on a trip. During the trip the water is cleansed by the sun and after a while I can refresh and cool down with clean water. It is also a good item to have in an emergency kit. In the U.S. water can be temporarily unavailable after a heavy storm or flooding. A lot of people keep emergency kits at home, so there is a huge market for this product. The commercial price for the bag is 100 dollar per bag, but if u buy 25 bags the price drops to 50 dollar per bag. This is nothing if you compare it with the price of other water cleaning equipment. I hope they can lower the price even more in the future, so it becomes affordable for the poor people too. In the best case scenario, people in Africa can start producing their own bags. That would make this innovation a true frugal innovation.

 

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'We Need More’

The world needs more frugal innovation! I hear you think: ‘ehm, NO! We need more standard innovations; sustainable cars, planes or plastics. Why care about frugal innovation?’ No worries, I will explain why particularly frugal innovation is important for this planet.

The world needs more frugal innovation! I hear you think: ‘ehm, NO! We need more standard innovations; sustainable cars, planes or plastics. Why care about frugal innovation?’ No worries, I will explain why particularly frugal innovation is important for this planet.

An Indian women with her frugal innovation.

As a process frugal innovation discovers new business models, reconfigures value chains, and redesigns products to serve users who face extreme affordability constraints, in a scalable and sustainable manner. It involves either overcoming or tapping institutional voids and resource constraints to create more inclusive markets (Bhatti, 2011). (1)

An enormous definition of frugal innovation. To long for a column actually, although to worthy to not mention. I belief in frugal innovation. This definition explains why. In this column I will address three important parts of the definition given by Bhatti. Scalable, sustainable and inclusive.

Scalable- Frugal innovation provides affordable solutions. Solutions which are scalable. In this modern world, based on the World Wide Web, people need access to modern solutions. Standard innovation gave us a lot of great easy solutions. Mobile banking, telecommunication, cars, ergonomic prosthetics and more. In the Western world, we love this innovations and enjoy the access to it. Too bad for all those who can’t afford. All those 3 billion people living from less than $2.50 dollar a day. Don’t you feel the dilemma here? We all enjoy the best innovations but 5000 kilometers south they don’t even have access to it! This is where frugal innovation comes in.  Wouldn’t you like to make a lot of people happy? Frugal innovation gives you that opportunity. Affordable solutions are provided, to provide this world more equality.

Sustainable- Frugal innovation are not only products, it is a different mindset as well. Resource are scare. Oil, and metals like copper and lithium, we are all losing them. Every product we produce with endless features and possibilities, contributes to this loss. Most of the innovations we nowadays have, are not sustainable at all. They only move the problem a couple of years forward. Frugal innovation offers a whole new way of looking to supply chains and sources. Products need to be affordable, so not too much expensive materials or features need to be implemented. When overlooking all the options, the most sustainable one will be chosen. Of course not all frugal innovations work like this. Some are not sustainable as well. However frugal innovation thinks about easy products, not usi
ng too much materials.

Inclusive- Most important Western multinationals see the possibilities of the bottom of the pyramid. Although they see them, still a lot of products are produced outside the countries. Cheap industries in Asia produce most products, and after that, are shipped to countries in Africa. Take beer for example. Big multinationals like SABMiller don’t have production facilities on local level. Local brewers can’t compete against this big cooperation’s. Fortunately there are positive examples as well. Heineken recently built a production facility in Ethiopia. Working together with local farmers, Heineken cares about inclusiveness of the products they make.

To conclude; we need frugal innovation. Frugal innovations provide sustainability, scalability and are inclusive. In this way a lot of people are helped. A huge advantage of frugal innovation is the push to change our mindset. We need to think about new sustainable ways to deal with resources. After all most of the local communities benefit from frugal innovation. Because a lot of innovation is done local and people got access to it.

Corné Smaal / Business Administration / Erasmus University 

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Less is More

Using frugal innovation in the design process results in simplistic, minimalist innovations.

Using frugal innovation in the design process results in simplistic, minimalist innovations.

Evolution of cellphones, source:krypted.com

A frugal mindset can be seen as an important asset when approaching innovation. Frugal innovation, with its ‘strip down to the basics’ principle brought us mass-produced-everything, such as cars, food, mobile phones and most other physical objects we interact with. Have a look around yourself and see if you can spot something that has not been mass-produced – and how much of your furniture is from IKEA, one of the better examples of frugal innovation in action.

This minimalist mentality has been visible in the tech world more than elsewhere. Smartphones have been stripped down to the essentials needed to operate. The first smartphone, which came out more than 20 years ago, cost $900 – today’s smartphones can be bought for $30! [1,2] This widespread availability of smartphones, in turn, created an innovation platform, out of which emerged, for example, all the phone applications we use today. Snapchat is a good example – with smartphones being available to a better part of the world, it recognized a user base and created a very simple (one could call it frugal) messaging app, and formed a whole social network around it. All of these innovations are even more impressive when you consider the fundamental philosophy behind frugality – less is more. IKEA designs products that use less material with more functionality. Smartphones replace other existing products (laptop, notebook, television, etc.) and at the same time bring new developments into the market.

Frugality can also be seen in the design of current innovations, with minimalist visual design being ever more prevalent. Think about Apple and their design language, keeping things as simple as possible, which in turn ends with products most of us find aesthetically pleasing. A lot of the innovations brought to the tech market have started following Apple’s design approach, mostly to appeal to the target market – young, hip, tech-savvy people who appreciate the minimalist design. For a good comparison, look at the difference between what a personal computer used to look 10 or 20 years ago and what today’s innovations offered on Kickstarter or Indiegogo (another 2 great examples of an innovation platform!). [3]

So, the question arises as to what this frugally innovative mindset can bring into future developments. With the reality of limited resources, it is of greatest importance for all of us, the environment, the economy, the civilization, to embrace a frugal approach to innovation. The less developed part of the world did it out of necessity, being faced with overpopulation or general lack of resources, people in Asia and Africa utilize frugal innovation more than the Western countries. We are now, for once, trying to keep up with them, and not the other way around.

 

 

Sources:

[1] http://qz.com/314285/30-smartphones-are-here-and-theyre-getting-better-every-day/

[2] https://en.wikipedia.org/wiki/IBM_Simon

[3] https://www.kickstarter.com/discover/categories/technology

 

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Should we change our relationship with developing countries?

Jordi Granés Puig - Nowadays the occidental societies look at developing countries thinking that they don't know what is good for them. As a consequence, developed countries are trying to impose their technologies and solutions to the developing countries. But are these the best solutions?

Jordi Granés Puig - Nowadays the occidental societies look at developing countries thinking that they don't know what is good for them. As a consequence, developed countries are trying to impose their technologies and solutions to the developing countries. But are these the best solutions?

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The 4th chapter is about frugal innovations which would be convenient to define: “Frugal innovation is the process of reducing the complexity and cost of a good and its production, usually this refers to removing nonessential features from a durable good in order to sell it in developing countries”. Therefore, because frugal innovations don’t use to generate enough benefits to be worthy for the companies, the main stakeholders of frugal innovations are NGOs and developing countries governments. Despite being applied in developing countries, most frugal innovations use to be designed in rich countries. But should it be that way?

Developed countries, or at least their population, are prone to watch the developing countries in some kind of paternalistic approach. As an example, if an occidental person sees the image above, he would probably say “Oh! That bike should not wear that much weigh. That man needs a car or a van to carry these ducks”. That reaction is natural but completely wrong and is very useful to illustrate the way we think about the developing countries. Of course the first part of the statement is correct, that bike should not wear that much weigh, but the problem is the second one, concretely in one word need. As a highly developed society we think that we know which the solution for the problems on developing countries is, and this is a mistake that even companies commit. The success of a product depends on the culture and the environment. What can be a great solution to a problem in the Netherlands, can prove useless in solving the same problem in India.

Some NGOs and companies that do frugal innovations have failed in their projects because of that. As an example, the Tata Nano was designed to be the cheapest car on earth, which would allow the Indian medium class to have a car instead of a motorcycle. The occidental collaborators of Tata motors thought that it would be interesting for a medium class Indian to have a car instead of a bike because it would be safer and would allow him to carry more baggage. Actually, the project had a tepid reception because anyone wanted to be seen driving the cheapest car in the world which, in addition, had little advantages compared to the motorcycle in a country where the traffic jams are constant. The product failed because they didn’t considered both factors, the environment and the culture.

Tata Nano is not the first frugal innovation project that fails for the same reason, so as a conclusion I think that the only way to succeed in frugal innovations is to change the approach to the problem, giving more importance to the consumers and their environment. An iphone is not a good way to communicate two tribes in Togo in the same way that a washing machine will not be useful in Afganistan. Going one step further we could extrapolate that solution, to abandon the paternalist approach, to the relation between developed and developing countries. If we stop watching these countries like if they were kids that don’t know what is good for them and allow them to find their own way, they will start developing their own solutions which will be way useful than ours. Developing countries are different societies that may have completely different needs and solutions to their problems. Let’s assume it, we don’t know everything.

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How to Empower the Bottom of the Pyramid

People living on less than $2.50 per day are classified into the bottom of the pyramid (BoP) group. There are 3 billion people within this group and the need for innovation to lower this number is urgent. Frugal innovations have been introduced to improve living conditions and processes such as water filtration, communication and transportation. However, innovations which continuously lower the number of people in the BoP community are more occasional. Alongside designing innovative, frugal products, more focus should be put on sustainable products/processes that will both improve conditions in the BoP and constantly lower the number of people within it.

People living on less than $2.50 per day are classified into the bottom of the pyramid (BoP) group. There are 3 billion people within this group and the need for innovation to lower this number is urgent. Frugal innovations have been introduced to improve living conditions and processes such as water filtration, communication and transportation. However, innovations which continuously lower the number of people in the BoP community are more occasional. Alongside designing innovative, frugal products, more focus should be put on sustainable products/processes that will both improve conditions in the BoP and constantly lower the number of people within it.

Akon Lights.JPG

Westerners typically aren’t exposed to the BoP group unless they are researching it. Movies, television and newspapers typically do not address the root problems and solutions of BoP conditions but address factors within BoP communities that could affect the lives of westerners. For example, corporate media reports about conflicts within BoP communities but seldom about efforts to drastically help these people. For example, Akon and the co-founders began a revolutionary project called “Akon Lighting Africa” to provide renewable, affordable energy and jobs to African villages and it was ignored for weeks by corporate media.

“Today, 600 million African people still live without access to electricity, and 3.5 million people die each year from inhaling toxic fuels or house fires caused while trying to light their homes”, said Akon and his co-founders [1]. Further, they, “believe that what rural African communities need is not overseas charity but affordable renewable energy delivered by fully trained African professionals managing for-profit projects that bring longevity, generate jobs and build new self-sustaining economies.” [1]

Among improvements in water, food, and shelter accessibility, African people need jobs. This will give African communities power and spur economic development. Additional schools and research institutions can then be built to increasingly educate their population. These communities will then quickly become sustainable by creating more jobs for their constituents causing a shift towards a smaller BoP group.

Alongside drastically improving living conditions, Akon wants to empower BoP communities to become sustainable. This is the epitome of a responsible innovation. If more efforts such as this one are introduced and geared toward BoP communities, not only will standards of living increase but we will see a permanent reduction from the 3 billion people living within it today.

Sources:

  1. Surtees, Joshua. ‘Akon: ‘I Don’t Think Charities In Africa Work’’. the Guardian

              N.p., 2015. Web. Oct. 2015.

      Image Source: https://www.enca.com/world/akon-lights-africa-better-future

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Tata Nano shows real class!

In today’s world, faster and more expensive cars will always get attention. They are seen as a status symbol and are, most of the time, used just to impress others. Tata Motors provides a car for much less money which serves the poorer people on this planet. They used their knowledge not for the high end 1% of the population, but for the people in the bottom of the pyramid.

In today’s world, faster and more expensive cars will always get attention. They are seen as a status symbol and are, most of the time, used just to impress others. Tata Motors provides a car for much less money which serves the poorer people on this planet. They used their knowledge not for the high end 1% of the population, but for the people in the bottom of the pyramid.

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Tata Motors, a large car manufacturer in India, introduced the predecessor of the Tata Nano, the Tata Ace truck, in 2005. Thanks to their success, they started with building an affordable car for the middle class people in India. They start producing in 2008 and planned to increase the capacity fast. The debut of the Tata Nano was a big success. Tata Motors aimed at a price of two thousand dollars, but it decreases to fifteen hundred dollars in 2012.The concept and design of the car won many prices.

What fascinates me is that this car isn’t that bad if you take the price into account. Its’s a four-door model with a maximum speed of hundred five kilometres per hour. Many luxury specifications are stripped. This means no power steering and no air conditioning. The downside is that some safety facilities as air bags are also missing. There are deluxe models of the car with these extra specifications.

This car is designed for the real poor people in the bottom of the pyramid. Their count is nearby three billion, which is absurd. This car design and production shows that a car, (still a luxury product), is also available for people who are isolated, because they are poor. When this car could be stripped down even more, it will be affordable for these people also, maybe with some help from governmental companies and help organisations. It can help them getting in social contact with family or other people, quicker access to help organisations in cases of emergency and it broadens their scope and changes on the labour market.

It can be argued that the car isn’t safe enough (it isn’t allowed on the public roads in the US) and that it will boost gas emissions because of larger sales of cars. On the contrary, it also offers a great opportunity for car companies to get in contact with a new market and help these people get involved in a society. There are possibilities to lower the price even more and it will challenge the car producers to use their knowledge for the best, both the people and the environment.

A fast and expensive car is a dream of many children, but the innovative concept of the Tata Nano gives children in the poorer parts of the world the opportunity to grow in their society and gives them a fair chance of making something of their lives. Let us focus on that goal and move aside our own pampered dreams. 

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Spread the Frugal. Frugalize the Frugalization.

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We throw things away like it’s nothing. We all recognize we throw food away when we are full.  Can you even imagine that every year, consumers in industrialized countries waste 220 million tons a year, while the net food production of the sub-Saharan Africa is 230 million tons (UNEP, 2015)? This happens not only with our food, the same happens with materials. Doesn’t it sounds like a good idea to re-use our waste?

We are so spoiled, while we don’t even notice. We are used to the more luxury and expensive our things are, the better. Can you imagine people who have barely enough money to eat? Who can be helped with a little ieniminimo bit of technology? Some of us are already helping by donating our clothes to third world countries.


Producing things, third world countries can adapt, must be cheap. A lot of industries in industrialized countries solve this in their own ‘rich’ countries by using childlabour which can produce things really cheap. It is so nice to have your clothes cheap, especially when you don’t have the money to buy more expensive clothes. But the children who produce those stuff get a little bit or sometimes no money out of this. If huge companies like C&A and Primark (Volkskrant, 2012) continue with this, the gap between rich and poor will stay big.

So why not start a Frugal organization in e.g. South-Africa? Help poor people setting up a company which reuses donated old stuff from industrialized countries? Those people can start their own business without needing help from our countries. We are only sending our old stuff to them and then they can produce new stuff out of it themselves. This stuff will be burned in our country anyway. Then they can sell their stuff to their people. Let’s help them with rolling the ball. As long they keep the ball rolling, we don’t have to pay attention anymore.

But why using only Frugal innovations for people at the Bottom-of-the-Pyramid? In industrialized countries there will always be people who can’t afford expensive stores and will always go to stores like Primark. And then, childlabour will exist forever and we will NEVER innovate responsible. This is why we must re-think this kind of selling chains or services. Primark could try to produce their products as cheap, or rather cheaper as childlabour to stimulate them, so they can sell it cheap but still have profit. They can do this by re-using waste. This way Primark can also get a good name, which will stimulate customers to buy their products. If I was the boss of the Primark, I would sleep much better earning money this way..

We’re all human, we must care for each other. This is why we must stand up for innovation in a responsible way. Not only for us, but for everyone!

Sources
UNEP. (2015) Food Waste: The Facts. Consulted at the 4th of October 2015, Retrieved from http://www.worldfooddayusa.org/food_waste_the_facts

Volkskrant. (2012) Kinderarbeid in bedrijf dat levert aan C&A en Primark. Consulted at the 4th of October 2015, Retrieved from http://www.volkskrant.nl/economie/kinderarbeid-in-bedrijf-dat-levert-aan-cena-en-primark~a3246038/.

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Involve the elderly!

In Western countries, the ageing population is a key societal problem. More and more old people are being put in a care taking house. Neglected and all alone, these people are destined a lonely faith. To cope with the increase of lonely elderly people, a new certification program has been suggested. This certificate could be placed on products to demonstrate products’ or services’ fitness for elderly people, enabling them to be involved in society once again.

In Western countries, the ageing population is a key societal problem. More and more old people are being put in a care taking house. Neglected and all alone, these people are destined a lonely faith. To cope with the increase of lonely elderly people, a new certification program has been suggested. This certificate could be placed on products to demonstrate products’ or services’ fitness for elderly people, enabling them to be involved in society once again.

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First of all, I’d like to point out that living an independent life is a great challenge for many of the elderly people. Even getting the daily groceries is a major obstacle. Then isn’t the least we can do for these people to at least try make their lives a bit easier?
This can be accomplished by usage of the earlier named certification program. In that way an old woman can make a clever decision not to go for an uncertified jar of green beans, but go for an elder friendly bag of vegetables.
On top of that, elderly people need appropriate furniture in their homes. But how are they able to find out if a certain chair is comfortable enough to purchase, but not too deep so that they can still get out of the chair by themselves? Again the certification program would prove very useful. It would simplify the elder’s lives so much in a very sustainable way. That is what makes this program frugal; it’s sustainable, cheap and allows involvement of everyone.

On the other side, like with every certificate, this program also has its disadvantages. For example, next to this specific certificate, many other certificates currently exist. All these other certificate also try to demonstrate the excellence of the products. Consumers are no longer able to remember what logo means what, because of all these different certificates. This causes the certificate programs to all lose their market value. After all, what use is it to put a logo on a product or service, when the consumer doesn’t even know what it means anymore?
And even if they would recognize this certificate, would an older man like to use an elderly proof product just because it states that it is elderly proof? Would they not feel ashamed for having to use such products? No one likes to be old, so a logo that would designate them as old and fragile might actually encourage people to nót use them.

On top of that, all certificates must be trustworthy in order to guarantee the quality of the product. The only way of proving the reliability of a certification program, is to have it be controlled continuously. The controls will cost substantial amounts of money, while still not excluding the chance of corruption within this system.
Whoever succeeds in blackmailing the controlling agency, is able to create a worthless certificate but acquire full credibility on its’ market.

So, a certification program might not be the solution to the problem of elderly people. Ultimately, companies should specialize themselves in products and services for the elderly. The quality of the companies has to be good. If it isn’t, the companies will soon go out of business due to market competition and mouth to mouth advertisement.
Taking everything together, involving the elderly into society is very important, but not through a certification program; nobody likes to be labeled!

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Is there a place in society for frugal innovations?

To introduce a new frugal innovation in the market is not necessarily an easy task; often creating a whole new market level which brings about risk and often unwanted competition. Are we as a society ready to welcome these life-changing innovations?

To introduce a new frugal innovation in the market is not necessarily an easy task; often creating a whole new market level which brings about risk and often unwanted competition. Are we as a society ready to welcome these life-changing innovations?

Tata Nano Crash Test

Are frugal innovations inclusive, efficient and responsible enough to become an active part of society? This notion is reiterated every time a new ‘cheap’ innovation is introduced to the market. The essence of frugal innovation has been phrased quite accurately by Navi Radjou & Jaideep Prabhu in their book “Frugal Innovation is the ability to ‘do more with less’”; that is to create significantly more business and social value while minimizing the use of diminishing resources such as energy, capital and time.” It has the qualitative freedom of taking place anywhere, anyhow and at any time. Whether it is the product of stripping existing technology or re-creating technology using new materials, it ‘creatively adapts local technology where top-of-the-range is out of reach.’(WIRED) Based on these accounts of the true meaning of frugal innovation, this column will question the verity of innovations in their attempt to become frugal.

The most essential frugal innovations often take place in third-world countries where basic needs are met in affordable and responsible ways. In this innovation process, designers are confronted with moral dilemmas concerning the responsibility, safety, and efficiency of their innovation. An example of this is the TATA NANO car in India, which was designed and promoted as  the cheapest car on the market in India. However the low production costs did not evolve without additional social costs, furthermore almost every positive aspect had a negative connation to it. Low production costs and inclusiveness by producing it in India created job opportunities while keeping  the price at a low rate, yet in turn this created the perfect scenario for large companies to exploit the market. It was introduced as a frugal way of combining the safety of a car and the price of a scooter, which in the end led to budget cuts in vital safety requirements for the vehicle, quickly diminishing its original purpose.

What we see in the previous example and in many others is that when one element of the innovation outweighs the other, the creation is off balance which will eventually lead to its downfall. The TATA NANO car, after dramatically failing a safety test, was assumed unqualified to enter the market seeing as the focus on inclusiveness and efficiency outweighed the matters of responsibility and safety. Same goes for the ‘Fairphone’ which at first seems like a great piece of technology, responsible in use, ability to change every part of it reducing E-waste, and complete high tech. However when the price starts at a staggering 525 euros, it becomes difficult to place this innovative technology in the list with frugal innovations.

These examples identify the difficulty that innovators face when trying to create a frugal innovation, one that allows everyone in society to benefit, takes into account both the present and future in regards to the environment, and is fostered by the combination of older technologies with new innovative ways of thinking. When an innovation becomes frugal by means of all previous mentioned elements, it will automatically find its place in society. 

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Column 4/7: The struggle with Frugal; The Dutch youth care system has to “do more (and better) with less.”

A chance to get amused, surprised and be carried away from a safe distance, by the opportunities and challenges that take place at the Responsible Innovation minor.
Driven by the motto of the Faculty of Social Sciences; 'Discover people. Discover society!' an Erasmus Student is trying not to get lost in the new world of Technology, Policy and Management.

A chance to get amused, surprised and be carried away from a safe distance, by the opportunities and challenges that take place at the Responsible Innovation minor.
Driven by the motto of the Faculty of Social Sciences; 'Discover people. Discover society!' an Erasmus Student is trying not to get lost in the new world of Technology, Policy and Management.

File: Anti-capitalism color
Current changes in Dutch youth care legislations certainly meets the description of
Frugal Innovation1.
At a first glance, this description of a condensed version
of Frugal Innovation 
looks attractive. Acknowledging that beauty is in its simplicity, this powerful statement seems right at his place on top of a                        
Youth Care Policy (2015). To what extent is this global trend, of 'doing more with less' useful off fields such as youth care?
 
Frugal innovation does not stand for just another low-cost offer 2Superior forms of this type of change refer to broader principles, aiming at affordable, accessible and sustainable products or services.  Established with an actor approach of answering the needs of their consumers, who are most of the time living at the ‘Bottom of the Pyramid.'  A likewise situation applies in The Netherlands. Most of the people in need of youth care services are living at the ‘edge of Dutch society’. How does stripping down (having only essential features left) and re-engineering the youth care, offer good quality at the bottom of the Dutch Pyramid?
 
If necessity is the mother of all frugal innovations, the limitation is its father. In situations where there is access to fewer resources, it cause the person to be more creative because of available resources. Scarcity, which is one of the greatest accelerators for creativity, perhaps is also the secret of its success2. When limited resources prevent people from accessing their basic needs, human brain naturally begins attempts of problem-solving. Creativity occurs to accomplish the solution. Creative problem solving is a day-to-day mechanism for professionals at Residential youth care facilities. Confronted with urgent cases and Ad hoc situations, the 2015 transformation asks for unique solutions. Since January, all members of my team are real creatives, in their attempt to fulfill the basic needs of the children.  As a result of this youth care transformation, only primary based care serve the children in a most straightforward manner. Because of this my job required a different mindset. Hypothesizing that applying a most simplistic form of frugal innovation to the field of youth care sharply reduces its quality, doesn't require a lot of studies. In the persona of an Educational Sciences student, the introduction with the course broadened my horizon.  Policy documents named Doing more with less,  are attempts to cloud the issue, with a rather different view how to bee creativity. Gladly, Every cloud has a silver lining. As a practitioner in the field I feel morally responsible for children to get the care they need. I am not afraid of doing some 'extra effort'.
Driven by the powerful force of fewer resources, extreme power boost made me more creative than ever. Decreased time is working on individual treatments, and increased caseloads resulted in short-term problem-solving and long-term 'forward- looking' responsibility. The beauty of frugal innovation turns out to be a real beast. Struggling with this untameable animal, it gives me energy and creativity to reach my goal. This course is part of my step by step path, trying to cause for Responsible Innovation of  Reformation youth care.
 
Ministerie van Volksgezondheid, Welzijn en Sport, Ministerie van Veiligheid en Justitie, & Vereniging van Nederlandse Gemeenten (2014d). Voor de jeugd. Retrieved April 7, 2014, from http://www.voordejeugd.nl/
 
Capturing the Power of Frugal Innovation - AT Kearney
 
https://impetum.wordpress.com/2013/08/08/frugal-innovation/
 
Cees van Beers, professor of innovation management at Delft University of Technology, WEB LECTURE: frugal innovation as responsible innovation, material course week 3.
 

Ministerie van Volksgezondheid, Welzijn en Sport, & Ministerie van Veiligheid en Justitie (2013). Stelselwijziging jeugd. Hoofdlijnen wetsvoorstel Jeugdwet. Retrieved July 29, 2013, http://www.voordejeugd.nl/images/pdf/Wetsvoorstel/Factsheet_Hoofdlijnen_wetsvoorstel_Jeugd wet.pdf

 

2https://impetum.wordpress.com/2013/08/08/frugal-innovation/
3Capturing the Power of Frugal Innovation - AT Kearney
http://www.cbs.nl/nl-NL/menu/methoden/toelichtingen/alfabet/j/jeugdzorg-1.htm
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From ‘Jugaad’ to Frugal Innovation

Jugaad is a Hindi word that means an improvised fix, a clever solution born in adversity. Why does humanity need these forms of innovation, and where are they currently heading?

Jugaad is a Hindi word that means an improvised fix, a clever solution born in adversity. Why does humanity need these forms of innovation, and where are they currently heading?

'Jugaad', A clever solution born in adversity

Today I saw a fantastic presentation by Ravi Nadjou, on the subject ‘Jugaad’, on which he has spent years of studying. Jugaad is a Hindi word that means an improvised fix, a clever solution born in adversity. He noted that a lot of this is present in less developed countries, since the technical and economic resources are low. The first example he mentioned, was a design by Mansukh Prajapati, a potter in India, who has created a fridge entirely made of clay that does not consume electricity. The second impressive example he gave, was a giant billboard in Lima that absorbs air humidity and converts it into purified drinking water, which is really scarce in that dry area. He realized that creativity might be the most precious renewable resource.1 So, why does humanity need these forms of innovation, and where are they currently heading?

The first and rather obvious goal of these Jugaad innovations, is that they can accommodate the basic needs of the poor. Other, more sophisticated methods of solving their problem already exist, but are not within their reach. However, more can be said about the importance of Jugaad innovations. The business model of high-tech firms nowadays is often focused on wealthy people. Due to high pricing, new technologies can only be adapted by these wealthy people, enlarging the disparity between rich and poor. Jugaad however, enables inclusive growth. This form of growth allows opportunities for everyone to participate in the growth process while making sure that benefits are shared, in countries where people have been excluded from the fruits of economic growth and development.2

Very interesting is the fact that this way of sustaining growth and prosperity is nowadays also happening in the western world. Companies today encounter the huge potential of doing more with less. It has become increasingly popular in the United States and Europe under the appellation ‘Frugal Innovation’. This does not only happen on the field of technological innovation, but also in the development of services. For instance, BlaBlaCar3 has rapidly emerged as Europe’s leading car-sharing community. It provides passengers with a less expensive and more flexible alternative to traditional means of transportation. But, is this very desirable trend of not focusing on the state-of-the-art technologies and services, but on doing more with less, really economically viable? Can focusing on cheapness be economically viable? The answer is yes. In the U.S. only, there are 46.7 million people living in poverty.4 Imagine how large the scale of frugal innovations worldwide could be. By not focusing on making products as exclusive and sophisticated as possible, but trying to make it accessible for so many people as possible, companies should be able to make enough profit to ensure their growth. Furthermore, this larger scale would be a blessing for humanity as a whole. How can we reach this?5

The key to successful frugal innovation is collaboration. The reason why Jugaad innovations occur, is the presence of the understanding of the problem and the real urge to innovate is there amongst poorer people in developing countries. Many of the developers of Jugaad innovations did not go to school and do not invent their ideas in big research and development labs. This is where huge steps in efficiency have to be made. Resources, knowledge and money are widely available in the western world. If we would be able to harvest the creativity and understanding of the real problems amongst the poor in order to add our superb knowledge, frugal innovation products might just bridge the gap between the poor and the rich.

 

 

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Sources:

[1] Ted Navi Radjou in TED Radio Hour: http://www.npr.org/2015/07/17/421495817/can-limited-resources-lead-to-better-innovation

[2] Web lecture: Frugal Innovation & Inclusive Development: http://delftxdownloads.tudelft.nl/RI101x-ResponsibleInnovation/Week4/RI101x-4.5-transcript.pdf

[3] BlaBlaCar – Share city-t-city car journeys with a trusted community of 20 million verified members: https://www.blablacar.co.uk/

[4] Talk poverty – Basic Statistics: http://talkpoverty.org/basics/

[5] Frugal innovation – A new approach pioneered in the Global South: http://ideas4development.org/en/frugal-innovation-new-approach-pioneered-in-the-global-south/

 

 

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Doing More With Less: Reprecussions in Gujarat

Frugal innovation, or Jugaad, is the process of supplying products and services with the least amount of resources used possible. The intention being a social and financial improvement; and following the phrase "Doing more with less". Following a massive earthquake in Gujarat, India, there were cry's for innovations to help support the inhabitants during rough times.

Frugal innovation, or Jugaad, is the process of supplying products and services with the least amount of resources used possible. The intention being a social and financial improvement; and following the phrase "Doing more with less". Following a massive earthquake in Gujarat, India, there were cry's for innovations to help support the inhabitants during rough times.

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In the early 2000's, an earthquake shook the city of Gujarat; creating an atrocity affecting hundreds of thousands in India. Many lost homes, access to sufficient food sources, and unfortunately massive casualties. There were cry's for some sort of help for the country in the wake of other such disasters, and hope that it can hinder any damage earthquakes or that any other natural disasters may cause. After all, how can the civilians get access to food that is not only clean and plentiful, but available to use at all times for the people in disarray. In comes a young entrepreneur, with an idea that fully captures the essence of frugality: a fridge. 

 

 

 

This fridge is built from clay, and doesn't even require electricity to function; creating an easy, sufficient access to storing food. In the wake of any disaster, this form of frugal innovation will serve its purpose and reduce casualties to a far more reasonable level. 

 Hence, frugal innovations; though done at a smaller scale; could in fact be much more significant and useful than radical innovation in my opinion. There is great awareness and interest on reducing cost and increasing efficiency in enterprises and countries alike, and frugal innovation can provide just that. Below-the-radar inventions that satisfy local issues at a low-cost initiative can serve great purpose for countries in disarray like India. Without the need of massive investments and press, this young entrepreneur provided a solution for thousands without adequate access to food. This can be extended to various other counties going through problems and certain constraints, and frugal innovation can heed these boundaries and provide solutions through the available resources. 

Though radical innovations can provide significant contributions, it also requires significant investments and is not always feasible to implement given certain circumstances. On the other hand, frugal innovations can be implemented practically anytime and much sooner; providing a solid solution to problems when bounded by specific circumstances like that faced in India. India will soon dominate in size, reaching third largest country in the world. This form of frugal innovation invested in by India, a large influential country, can provide large incentives to other countries; developing and developed; for similar implementations when faced with issues. This could prove to be a medium for further development in this area, as many countries could have this incentive which has proven effective.

Even in North America, countries should put this awareness to good use. Lackluster economic growth could lead to an increased demand for frugal innovations and processes. They could be faced with increasing demand, and must be prepared and aware of frugal innovation incentives. Furthermore, new available technological platforms are providing innovations at a lower cost. These countries thus have more opportunities for frugal innovators and innovations to prosper. This can even be extended to an aging population, where frugal innovations can help provide services and support for healthcare at much lower investments and costs; improving societal care if successful. An incentive worth considering to say the very least.

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Frugal innovation, an unexploited mine

the positve and negative sides of frugal innovation and how to deal with them

the positve and negative sides of frugal innovation and how to deal with them

Frugal innovation, positive and negative

Frugal innovation, an unexploited mine

Frugal innovations aims at the bottom of the pyramid  (BoP), underpriveliged people with an average spending of costs . In other words: stripped  down to the essential parts, leaving the luxury behind. There  are two types of frugal innovations:

-          The existing technical product, stripped down to the basics so it is affordable for the BoP 

-          Creating  technical products for 3rd world countries but has to be affordable. 

The misconception with regard to  the development and production of frugal innovation I found fascinating is that they believe that limited purchasing power of BoP consumers cannot be translated into profit due to low prices.  But then again, there are four  billion people living in the BoP which is more than half of the world population. Entering this market with frugal innovation and making a product affordable for half of the world’s population causes a huge change of selling. But that is not the only advantage, but companies like apple want to maintain an exclusive product, but image a firm with a good name reputation selling their product without the luxury worldwide.   This would have a huge impact and both positive and negative consequences:

-          Economically: technical products that have helped use  get to the point where we are today could benefit the  economically low countries that  struggle to get along. Frugal innovation could have a big impact on the economics of these countries,

-          Socially: these technical products of any source  helped us  to become more connected with other people in order to  create and innovate even more products.  By implementing these innovations  in developing countries could be a  big advantage in social development and getting people to gather to grow  their own country.

Aside from these two postive effects on innovation in developing countries, there are also negative effects: 

-          Working conditions: frugal innovation is a low cost product but where does it safe on cost ? what  are the work conditions and wages of  the workers? These are questions  that need to be asked in order to be responsibly  innovative,  otherwise the product should not be produced 

-          Child labor: when you buy the product you cannot see on the exterior  by who it was produced. You need to trust the producers on their word that there was no child labor or similar  involved in the process.

 

But what I found even more interesting are the valuable materials most of the technological products contain. And this should be an important point for frugal innovation. When a company decides to aim at frugal innovation and thereby aim their market at half of the world's population, they should be well aware of the valuable materials in the products they produce. Not only because of the mass-scale  production but also of the manner in which these  resources are being mined and under which conditions the mining  is happening. Producers need to focus on these negative effects  and how these negative effects go hand in hand with each other.  If all this  is taken into account, we can speak of responsible innovation.

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Stop modern imperialism!

The western/developed world should mind their own business!

The western/developed world should mind their own business!

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During the Imperialism which started around 1700 the European country´s went off to discover the unknown. When they found the unknown and they found it to be different than Europe they decided to “help” and make it a better place. At least that is what the official purpose of missionary work in third world countries was about. What they actually did was conquering countries violently and rip the native inhabitants off.  That was the first big impact the “developed” countries had on the less developed countries.

Now we make a jump in time to the 20th century. A lot of occupied countries fight for their independency and few actually get it officially back. Know the “second stage” of imperialism as I call it takes place. Big companies originating from developed countries see the tremendous resources third world countries possess. Officially the company’s intention is to educate and help to develop those countries and initiate business relationships. What they really did is taking advantage of the naïve governments of the developing countries. Taking their recourses and leaving the countries behind in chaos.

Those are just two really basic examples of how the western countries took advantage of the third world or less developed countries in history.  The list of cases is probably endless and it is not history but is still happening today. The chaos we leave behind in form of war and environmental pollution are catastrophic. For sure there are honest and effective organizations trying to really bring help to where it is needed. But even those tent to export the western way of life. Let´s take a look at frugal innovations. The idea is to reinvent something already existing in a more basic and sustainable way so it can be used in for example developing countries. To me it is an old idea in a new suit. Helping with what makes our life more efficient does not mean that it is of use in developing countries. Maybe there is not even need of more efficiency. We need to stop trying to help those countries by selling them our system over and over again. We cannot compare our cultures, our way of thinking and what we value. By trying to help them we actually bring more harm than good. Even if I actually believe that the impact the western world had is already so big that the developing countries maybe cannot recover from it. I do think that we should stop to interfering in their business. 

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Modular devices, building frugality

Electronics are mainly targeted to one specific group and more than once this is the high-income group. Are modular electronics the way to design for the whole of society?

Electronics are mainly targeted to one specific group and more than once this is the high-income group. Are modular electronics the way to design for the whole of society?

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Modular electronic devices. Highly customizable and as expensive as you want to make them. The perfect opportunity to make electronics easily available to the whole of society, instead of focused on one income group.

Electronics, like smartphones or smartwatches, are mainly focused on one of three income groups; low, average and high. High-end smartphones nowadays can cost as much as € 1000 or more. Low-end devices are usually marketed for a maximum of € 100 or € 200, but lack many of the functions and luxuries of expensive devices. This segregation of target groups creates issues, mainly within company business models themselves. If for example high-income groups lose interest in a product from a corporation that focuses on the top of the market, this company risks losing everything since they only have one target group. On the other hand, focusing on only one group aids innovation since you as a company know your target group and their needs very well. However, this is an advantage not exclusive to traditional electronics manufacturers.

Take for example Phonebloks. Presumably the first people to seriously start developing a modular smartphone. The idea behind this modular concept is that lots of features come in modules instead of being integrated. They speak among others about a camera module, a sound module and a display module. Every one of these modules can be snapped on a baseplate to form a fully functional smartphone. The idea is that if one component is broken or outdated, this component itself can be replaced without having to buy an entirely new phone. Besides being better for the environment it is also better for ones personal finances. This means that Phonebloks is a more interesting product for a broader market, since people with a lower income can just purchase less (expensive) modules. And since most of the world’s population has a mobile phone (although many do not own a smartphone) a device like Phonebloks is a very interesting starting point for modular electronics.

In the case of Blocks, a modular smartwatch, this might not be the case. Blocks works on the same principle as Phonebloks, but here you have a fully functional device where you can add features to in the form of modules. But since the smartwatch is a very new product it is mostly designed for the top layer of society, like the Apple Watch that comes at a minimum of € 400. A modular device like Blocks starts from about € 170. This is of course much cheaper than the Apple device. However, it is still a wearable and it remains to be seen, even if the device can be as cheap as you make it, if it will gain the same popularity as smartphones.

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A responsible future for the chocolate industry?

Even if chocolate will never be frugal, it can be inclusive and responsible. But only if there is enough awareness among consumers. So make a responsible future for the chocolate industry possible, buy Fairtrade!

Even if chocolate will never be frugal, it can be inclusive and responsible. But only if there is enough awareness among consumers. So make a responsible future for the chocolate industry possible, buy Fairtrade!

Cocoa farmer in Ivory Coast

As a proper Dutchie, I love hagelslag. I eat it every morning and I cannot imagine a better start of the day. And hagelslag is not the only form of chocolate I consume. Failed an exam? Bar of chocolate gets me going again. Cold winter day? Big mug of hot chocolate topped with cream to keep me warm. Not to mention brownies, chocolate chip cookies, M&M’s… And I’m not the only one: Dutch people annually eat around 5 kg of chocolate per person.

Keeping this fact in mind, you’d be surprised that most Dutch people don’t recognize a cocoa fruit when they see one:

This is because cocoa is grown far away from us, around the equator in countries like Ivory Coast, Ghana, Indonesia and Nigeria. We only get to see the final product. But this works the other way around as well: most cocoa farmers have never tasted chocolate in their lives, and often they don’t even know what their cocoa beans are processed into, as this amazing reportage shot in Ivory Coast shows:

The sad truth is that this will probably stay this way. Chocolate is a luxury product: the production process is simply too costly relative to the nutritional value of the end product. A bar of chocolate in Ivory Coast costs €2, while the farmer in the video only makes €7,50 a day (with which he takes care of a family of 15 and pays 4 laborers). Chocolate therefore cannot be turned into a so-called frugal innovation: a high quality product or service that, when stripped down or re-engineered, can be offered at very low prices to people at the “Bottom of Pyramid” (BoP). The BoP consists of the 4 billion people around the world that live from less than $2 a day.

Even if the production costs of chocolate would be decreased, for example by reducing cocoa solids content or by substituting cocoa butter with another fat, people in the BoP would never spend their money on something like chocolate; they would rather buy something that is useful and that will last, instead of something that just tastes good and is finished before you know it.

But if we can’t make chocolate frugal, what we could try is make the chocolate industry a responsible one. Currently, the cocoa production process faces many problems. Farmers often do not have a stable income and are forced to sell their cocoa for bottom prices to the intermediaries. There is no attention for good working conditions. An astonishing amount of children work on the plantations. Ivory Coast, supplying 40% of the world’s cocoa, uses an estimated amount of 200,000 children as laborers in its production process, of which up to 12,000 may be victims of trafficking or slavery. Needless to say, they often work long hours under hazardous conditions and are not able to go to school.

First step in making the chocolate industry responsible is increasing the percentage of chocolate with a fair-trade certificate. Chocolate with a fair-trade certificate is the only chocolate that guarantees fair prices for cocoa and a good trading position for small cocoa farmers, which means fair-trade chocolate is inclusive towards poor producers. It also guarantees good working conditions for the laborers (certainly no child labor) and sustainable cocoa production, and is therefore responsible. On top of that, around 50% of all fair-trade cocoa sold worldwide is also certified organic. Although the worldwide sales of fair-trade certified cocoa is rapidly growing over the last decade, it still accounts for only a fraction of worldwide cocoa consumption, estimated at 0.1%.

How to increase this percentage? There are many options, among which are government regulations, marketing, awareness campaigns…

But for now, let me try to create a little bit of this awareness among you: don’t you agree that the only way you can really enjoy chocolate, is by knowing that it was produced in a responsible and inclusive way? And then, maybe, those cocoa farmers will be able to taste chocolate themselves one day.

This column was made possible by a breakfast of 2 slices of buttered bread, covered with a thick layer of fair-trade hagelslag.

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Microcredit: Bangladesh’s biggest weapon against poverty

Traditionally, large corporations are only focused on the richer markets, also known as the top of the pyramid. That’s where people have the money to spend on expensive products, and large profits can be made. But I would like to invite you to look at the pyramid’s bottom. At first glance, there seems to be nothing but poverty, but look a little closer and you can see new opportunities to supply the growing middle class with a higher living standard. Prepare to be amazed what inclusive development can do together with responsible innovations.

Traditionally, large corporations are only focused on the richer markets, also known as the top of the pyramid. That’s where people have the money to spend on expensive products, and large profits can be made. But I would like to invite you to look at the pyramid’s bottom. At first glance, there seems to be nothing but poverty, but look a little closer and you can see new opportunities to supply the growing middle class with a higher living standard. Prepare to be amazed what inclusive development can do together with responsible innovations.

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Ranked by GDP, Bangladesh is the 3rd poorest country in Asia, only after war-torn Afghanistan and the economically mismanaged nation of Myanmar. The poverty has several causes, including poor infrastructure, corruption, and insufficient power supplies. Its economy is largely based on agriculture, with 45% of the 150 mln people working in the agricultural sector. But despite having all these factors against them, Bangladesh has reduced the amount of people in poverty from 63 mln in 2000 to 46 mln people in 2010. On top of that, Bangladesh has an average annual economic growth rate of 5-6%. This relatively large economic growth means the middle class is growing, and with it, the need for a higher living standard.

Want to participate in this growth? You’re one of the few. Large companies won’t invest in Bangladesh, repelled by the poverty, paralyzed by the fear of being accused of exploitation and deterred by the inability to see potential profit. Still feeling adventurous? Good! Because of the limited purchasing power, your product needs to be low-cost and aimed at improving the life of a Bangladeshi. But the real challenge is to deliver this product in a responsible manner.

This responsibility is determined by social standards: People need decent working conditions, minimum wages, health and safety requirements and protection against exploitation. Enabling employees with these rights empowers them. The social standards should be set at a height where they are acceptable, but not so high as to exclude employers from entering (other) markets. Combining low-cost, frugal and responsible factors into a product requires some thought on the economy in which you’re an entrepreneur. Key to being sustainable and responsible is knowing where your profits go, and they should go to the development of local businesses.

Bangladesh is home of Grameen Bank, famous for its strategy in microcredits. Starting operations in 1976, the Grameen Bank started giving out small loans to local farmers, so they could buy cattle or farming supplies with which they could generate a profit and pay the loan back. There were no credit checks, because there was no infrastructure allowing it, and the loans were small. Microcredits became very popular: By 2011 almost 8.4 mln USD was lent, with an average recovery rate of 96%.

Microcredits today are used for a different goal: creating infrastructure. Described by Iqbal Qadir in his TED-talk (video in link below), he explains poverty persists because sending money to governments in poor countries doesn’t work: It doesn’t empower the people, but the authorities. And by creating a larger gap between people and government, problems such as corruption arise.

Mr. Qadir argues we should empower the citizens, buy using the cell phone as a weapon against poverty.  Cell phones increase communication and connectivity, which improves infrastructure and productivity. But the cell phone became more than that, it became a production tool, increasing purchasing power of the people. Together with Grameen Bank and Telenor he founded the very successful Grameenphone, ‘the people’s phone’. In 2004, 7 yearsafter starting operations, Grameenphone had a revenue of 120 million USD.  

The Grameenphone, founded by microcredits is a very good example of inclusive innovation. Banking and communication were made available to the poorest of people, empowering them socially and financially. Empowering the people in this manner might be a key-factor in reducing the gap between people and government, and taking steps in the right direction to end its ubiquitous poverty.

Let the Grameenphone be an example for large companies to abandon saturated rich markets and to explore poorer markets for their riches. Let them come up with creative, innovative ideas for responsible frugal innovations. Because in these emerging markets, desires for a higher living standard arise, and by answering those needs in a responsible way, we might be taking the first steps to reduce global poverty.  

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Are frugal innovations the future?

Frugal innovation is an interesting idea that opens new possibilities for innovation, but is it profitable enough to become globally accepted?

Frugal innovation is an interesting idea that opens new possibilities for innovation, but is it profitable enough to become globally accepted?

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These last days, I got a lot of odd reactions from people when I told them I about frugal innovation. “Frugal, what is that?” I understand these people of course, because I would have said the same a few weeks ago. Frugal innovation is just something that is not known at all when you ask outside of the circle of people with experience in innovation or product development. But if you ask people inside this circle, they can be very enthusiastic about this concept. Innovators will tell you that frugal innovation is the future, but is it really that promising?

 First off, a business model basically needs two things to be successful; a great enough amount of customers and enough profit for the company that produces the product or service. To analyse these, let me start by giving the definition of frugal innovation as given by Professor Cees van Beers: Frugal innovations are innovations with reduced complexity and costs aimed at serving the needs of the four billion people that have to live from less than $2 a day. This directly addresses the requirement of potential customers, since frugal innovations are targeted at four billion people. But is there profit to be found in innovating in a frugal way? Many companies are still hesitant about this, but it is unneeded to feel this way. There are actually lots of opportunities for frugal innovation to amount to a good profit. For example, the introduction of small frugal innovations to unorganized markets in third world countries could help transform it into organized, fragmented markets. These markets have an opportunity to supply products for much lower prices than nowadays. This also provides companies with a chance at getting in these markets, and thus opening a whole new sector in different countries.

Another crucial factor in the success of frugal innovation is spreading knowledge about it. Luckily this is easier these days than ever before through use of the internet and different kinds of social media. More than overcomplicated new devices, people increasingly want simple and useful tools. This interest is quickly spread over the internet, which means that people all overthe world will get to know about frugal innovation more quickly. But social media does more than this. Another huge advantage of the internet related to businesses is that it enables them to get in touch with the public, and as such with potential new customers.Many companies are using the knowledge they acquire from their user base to fuel them with inspiration and new ideas. This leads to an increased awareness of the experiences and expectations that exist at the user end of their products. In this way, companies are also confronted with the need their users express for frugal innovations.

So in the end, innovating frugally seems to be the way to go for the future. The business model exists and is profitable, which is a huge boost for companies to start simplifying their innovations. Also, there exists an expectation among customers of companies that they take responsibility and start innovation frugally. Go frugal or go home!

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Two sides of the frugal innovation coin

The effects of frugal innovation on workplace conditions

The effects of frugal innovation on workplace conditions

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We are all consumers. From billionaires to bums and everyone in between. We all have needs, we all have desires. Whether it is a private plane or a sufficient meal, we all consume. This provides chances for producing companies, from goldsmith to grocer. In innovation there is a part of innovation that focusses specifically on the people that are not all that wealthy. Frugal innovations are innovations with reduced complexity and costs aimed at serving the needs of the bottom of the pyramid. This bottom of the pyramid consists of the world’s poorest people. Specifically focus within this type of innovation will be on people in developing countries.

Frugal innovation is linked to several good and bad effects for their own target group. I want to look at frugal innovation from the perspective of workplace conditions. In the last decade there has been a lot of debate about workplace conditions and living wages. We have seen this in the scandals such as the ones concerning big fashions chains, the smartphone production and the tea and chocolate industry.  But what is the effect of frugal innovation on workplace conditions? Frugal innovation can keep the workplace conditions low. On the other hand frugal innovation could also improve workplace conditions.  How these effects can co-exist shall now be explained.  

Firstly frugal innovation can be considered a chance for exactly this group of workers. Most of these workers work for quite low wages and are for that reason the people at the bottom of the pyramid. This means that these are the people the frugal innovations are designed for. As consumers of these frugal innovations they can gain a better position. Frugal innovations can enable access to the world, provide with better health care et cetera.

How this can be done will be explained using the example of the Mozilla smartphone. This is a smartphone for 25$ created to serve the needs of the people at the bottom of the pyramid. Now think of a woman, let’s call her Jane. Jane works 15 hours a day in bad labour conditions to support her family. Without a trade union Jane feels powerless, if she will not work under these conditions she might not be able to support her family. Now let’s imagine Jane with a Mozilla smartphone. We have just provided her with access to the world. Jane can directly comment on the working conditions, find the information she needs to discuss her situation, join a trade union and speak up for her right. If a lot of the workers in these production processes have this access, they will have a better position to negotiate their working conditions. Frugal innovations such as these smartphones will provide chances (Fair Wear Foundation, Press of Mozilla).

On the other hand frugal innovation is possible by keeping the production costs low. This can be done by keeping the costs in every stage of the production process as low as possible. When keeping costs low it is essential to use cheap materials, keep the wages low, produce locally and produce in a large amount (Zeschky, Winterhalter & Gassmann, 2014). It is also possible to demand long days of the workers which will decrease the safety for the workers in the production process. These long days can already be created by keeping the wages low (Fair wear foundation). All these and many other possibilities to keep the production costs low have bad effects on the workplace conditions.

 

To summarize the frugal innovation can have a negative effect on workplace conditions because of the necessary low costs of productions. Frugal innovation can also have a positive effect on workplace condition because it will help enable feedback and trade unions, provides information and present many other advantages that will not only improve working conditions but also quality of life.

In conclusion when looking at the frugal innovation coin there is both an upside and a downside. How the coin, frugal innovation, is being used in what matters the most. It is just like any other coin.

 

List of references

                Fair Wear Foundation website. Found at: www.Fairwear.org

                Press of Mozilla(2014). Firefox OS Unleashes the Future of Mobile. Found at https://blog.mozilla.org/press/2014/02/firefox-os-future-2/

                Zeschky, M. B., Winterhalter, S., & Gassmann, O. (2014). From Cost to Frugal and Reverse Innovation: Mapping the Field and Implications for Global Competitiveness. Research technology management, 57, 20-27. DOI: 10.5437/08956308X5704235.

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The struggle of frugal innovations

Not all frugal innovations were as successful as the TAHMO weather station. Mozilla launched in 2014 a 25 dollar phone, but had to cancel the project after a year due to a very aggressive phone market. While the idea was good, to create a cheap phone for people who cannot afford the more expensive phones. But by focusing only on making the phone cheap they made a mistake. They did not took the aggressive market and their target audience into account. People were not interested in a super cheap phone. They wanted quality instead of cheap phones.

Not all frugal innovations were as successful as the TAHMO weather station. Mozilla launched in 2014 a 25 dollar phone, but had to cancel the project after a year due to a very aggressive phone market. While the idea was good, to create a cheap phone for people who cannot afford the more expensive phones. But by focusing only on making the phone cheap they made a mistake. They did not took the aggressive market and their target audience into account. People were not interested in a super cheap phone. They wanted quality instead of cheap phones.

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Many third world countries are struggling with a lot of poverty. Sub-Saharan Africa, for example, where over 75% of the population earn less than 3 dollar a day. So most of the population has very little to spend. How do you reach a public who have so little? Almost all products and prices are based on the western world. The new phones, cars, lighting, agricultural equipment and even healthcare is way too expensive for most of the population.

This is where frugal innovation comes in. First of all, what exactly is frugal innovation? There are many definitions about frugal innovation, but the definition used in this column is the following: frugal innovation is usually defined as stripping down and/or re-engineering products and services, to offer quality goods at very low prices to the people in who are at the "Bottom of Pyramid". Research shows that frugal innovations compared to regular products can lower the price of a product between 50% and 97%.

A dozen projects have already been started in Africa. Take for example the TAHMO weather Stations. Because of the uncertainties of the weather, farmers had a hard time achieving a high efficiency. When they sow too much seeds and it won’t rain plants will die, but when a farmer sows very few seeds to minimize the risk and it does rain, he loses potential crops. While normal weather stations were way to expensive and hard to maintain, the Trans-African HydroMeteorological Observatory (TAHMO) managed to create a cheap way of predicting the weather.

Now since the technology is there, it is still very hard to make a profitable product. A good business case is needed. In the case of TAHMO they solved it by selling weather data to external companies, this way the farmers were able to insure themselves for only a few bucks a month. Not only is this helping farmers achieving a higher efficiency, but also creating a better environment for those farmers.

Not all frugal innovations were as successful as the TAHMO weather station. Mozilla launched in 2014 a 25 dollar phone, but had to cancel the project after a year due to a very aggressive phone market. While the idea was good, to create a cheap phone for people who cannot afford the more expensive phones. But by focusing only on making the phone cheap they made a mistake. They did not took the aggressive market and their target audience into account. People were not interested in a super cheap phone. They wanted quality instead of cheap phones.

This makes it a bit contradictory. Even when people don’t have a lot of money they tend to choose more expensive but better phones. This discourages companies even when there are already so few companies creating frugal innovations. Is this fair or should there be special arrangements to stimulate frugal innovations? Should the market even be stimulated to create frugal innovations, or should that sort out itself?

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Can everyone participate in eco-innovation?

Eco-innovating is an important phenomenon of the last decades. A lot of new innovations like solar systems, sustainable materials even whole eco cities are new concepts on the market. But to get this eco-system working, a lot of people have to participate. About 80% of humanity live with less then US$10 per day (1). Are the poor too poor to innovate?

Eco-innovating is an important phenomenon of the last decades. A lot of new innovations like solar systems, sustainable materials even whole eco cities are new concepts on the market. But to get this eco-system working, a lot of people have to participate. About 80% of humanity live with less then US$10 per day (1). Are the poor too poor to innovate?

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In 2002 people discovered it was possible to illuminate a house with light from the sun via plastic bottles hanging inside his house from the ceiling. By simply adding a few drops of bleach (to prevent mold growth) to water in a used plastic liter bottle, replacing the lid and then inserting it through the ceiling of a house it was found that one could illuminate a room with no electricity(2). Suddenly, here was an incredibly cheap and sustainable way to provide light to millions of people with limited or no access to electricity. This shows that eco-innovation can be a cheap solution for a huge world problem.

The help of different associations can help providing eco-innovations for people that live on the bottom of the pyramid (BoP). This can be seen in Bolivia, where about 45% live under the national poverty lines (3). They developed an organization that took care of sustainability and the BoP: The IDTR Project, which is a initiative Bolivian government’s. Its main aim is to give rural families in Bolivia, especially in off-grid regions, access to electricity(4).

They started to install PVS (photo voltaic systems) for rural homes. PVS make use of a photovoltaic system that employs solar panels that have a number of solar cells and supply usable solar power(5). Besides the installation of photovoltaic panels for rural homes, the IDTR also encompasses other measures, such as the densification of the electrical grid in more populated regions. They made an electrical network in a sustainable way.

The contractor, usually a local firm, which provides maintenance for 4 years, installs the equipment. Such a contract permits a good balance between on one hand the necessity of the local firms to minimize their financial risk and on the other the desire of the government to maximize control over energy production. Thanks to the collaboration between local NGOs, local communities and international air organizations, this is a successful sustainable project.

These two examples of eco-innovation show that eco-innovation is a smart and easy way of solutions and also ensures a new accessible sustainable market. I think it is important to make sure your new product suits the ideas and costs of 80% of the world. It shows that people of the BoP are in fact really suitable for eco-innovation and that we also should innovate based on this group.

 Sources:

  1. UNDP Annual Report 2008. Source: http://www.undp.org/content/undp/en/home/librarypage/corporate/undp_in_action_2008.html
  2. Mario Pansera , Richard Owen (18 October 2013). Eco-Innovation at the “Bottom of the Pyramid”. Source:http://link.springer.com/chapter/10.1007/978-94-007-7633-3_15/fulltext.html
  3. Explanation IDTR organisation. Source:http://e8casestudies.org/casestudies/Bolivia-IDTR.aspx
  4. Mario Pansera , Richard Owen (18 October 2013). Eco-Innovation at the “Bottom of the Pyramid”. Source:http://link.springer.com/chapter/10.1007/978-94-007-7633-3_15/fulltext.html
  5. PVS explanation. Source: https://en.wikipedia.org/wiki/Photovoltaic_system
  6. Data Bolivia. Source: http://data.worldbank.org/country/bolivia
  7. Image eco-innovation-collage made by Lisa Gerards
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So many frugal innovations

There are many frugal innovations. unfortunately there are many companies that do not trust frugal innovations. They actually should trust frugal innovations and help creating sustainable development in developing countries.

There are many frugal innovations. unfortunately there are many companies that do not trust frugal innovations. They actually should trust frugal innovations and help creating sustainable development in developing countries.

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Sometimes I get tired from all these new innovations. It looks like they are only there to benefit the more rich because they are often only affordable for the rich. Luckily that is not the whole story of innovations, there are also frugal innovations, they are innovations aimed at people earning less than two dollars a day. There are two different kinds of frugal innovation, one is stripping the technology to its basics and the other is redesigning demanded technology so that the people there can use them. When thinking about frugal innovations I get really excited because it gives the feeling of really developing something that can be useful to many people.

Something that caught my attention is a site that has all kinds of innovations for the basic needs, especially aimed at developing countries. There these innovations are brought together and I could see all these different ideas people introduce to achieve these basic needs with new innovations. It astonished me how many different innovations there were. Innovations to improve sanitation, clean drinking water, sustainable energy, health care, waste management, housing, ICT and agriculture. Almost all of them sustainable development goals.

It made me wonder why are there so many responsible innovations of which many people would benefit but hardly anyone knows about them. I believe the problem is that there is not enough attention for frugal innovations. Companies are scared to innovate in frugal innovations because they are afraid they will not make profit. Another problem is that they see serving these markets as taking advantage of the poor.

What I learned from the lecture about frugal innovations is that this just isn’t true and that it is indeed possible to make profit with frugal innovations. When introducing frugal innovations they do not have to take advantage but they can contribute with their innovations to economic and social development. I think more awareness is needed in companies that these people can be an interesting target group for them as well. That will create possibilities to really put these frugal innovations to use on a larger scale. There are so many easy solutions for many problems and I think companies are an important key to implementing these solutions. Look at examples as WakaWaka it is possible to introduce these frugal innovations and be a company as well. I hope more companies will follow their example and so will contribute to sustainable development in developing countries.

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Frugal Innovation in Engineering Design

In this column the importance of the concept of frugal design for the future will be explored for both developing and developed economies and the necessity of a paradigm shift will be touched upon.

In this column the importance of the concept of frugal design for the future will be explored for both developing and developed economies and the necessity of a paradigm shift will be touched upon.

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The human species is a collective of imaginative, creative and explorative individuals who, in large part, enjoy tinkering with and inventing new technologies. At high schools, technical colleges and universities all around the world, students, hobbyists and experts alike, take part in competitions to design or invent a plethora of contraptions. When I was at school, we hand one such project in which students had to complete a series of pre-defined challenges. We worked in a team and each group was given the same resources for each challenge: tissues, string, plastic bags and straws, for example.

One of the challenges, done at many schools, was to protect a dropped egg from breaking. More precisely, the challenge was to efficiently and effectively use available resources to come up with a solution. Our group tightly wrapped the egg in hard materials to reinforce the shell, followed by softer ones to absorb shock, and the egg did not break. However, another team produced something much more elegant: the winning design used a plastic bag to create a parachute and used a weight and straws to elegantly mimic a simple landing system. Clearly, one design was better than the other. However, in both cases we exhausted all of our resources aiming to deliver our absolute best, as creativity was the limiting factor.

Imagine, however, that the challenge was phrased slightly differently: protect the egg as frugally as possible. In this scenario groups are recognized for the material not used, as long as the egg does not break. Instead of hanging on every little bit of material at one’s disposal, one would selectively choose them carefully, knowing full well that every item used, could be one more than the neighbour. Other examples of challenges in which inputs are the limiting factor, could be to protect as many eggs as possible or build as many different functioning solutions, given a fixed amount of resources. This slight nuance changes the mind-set drastically: creativity is given additional boundaries, focused in a stronger way and the challenge is more realistic. It is this exact change in mentality that is needed in a modern society, which recognizes the opportunity costs of excess and the very real limits of natural resources.

What happens when these challenges are combined? How does competition work when groups are allocated different resources and expected to meet the same challenge? Such scenarios reflect the real world and the outcomes can be truly awe-inspiring. While contemplating the concept of frugal innovation and its applications to the real world, one example was really interesting: the story of how high school students from an underprivileged and minority community were able to compete with and best students from top universities. Spare Parts, which aired in 2015, is a movie based on the true story about four illegal immigrant teenagers, who took part in an underwater robotics challenge at MIT, one of the United States’ best engineering universities. In 2004, Oscar Vazquez, Cristian Arcega, Luis Aranda, and Lorenzo Santillan bested the competition, using a small fraction of the budget limits set by the challenge. Using cheap and readily available materials instead of high-tech and custom designed ones, and by thinking of simple space-saving structural solutions, the team was able to exceed all expectations.

Bigger, better, faster solutions, which were great in the 20th century for the economically developed nations, are often too expensive or require better infrastructure to be effectively rolled out into developing nations. In fact, instead of waiting for the more advanced societies to deliver practical solutions to issues such as water treatment, communications and infrastructure as might be expected, most of the best innovations are being made domestically. However, the importance of frugal innovation is not just apparent in developing nations; many citizens of developed economies are finding happiness in making do with less. Social values are similarly adjusting, and increasingly populations regard the way forward, to be found through effective, creative and efficiently frugal innovations.

Sources:
http://www.wired.com/2014/12/spare-parts/
http://www.wired.com/2014/12/4-mexican-immigrant-kids-cheap-robot-beat-mit/
http://www.sciencefriday.com/segments/the-true-story-behind-spare-parts/

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Humans fueling up like a machine

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Joylent the European alternative for the American Soylent, which is a meal replacing beverage available in liquid and powder form. The drink is created by a software engineer who was fed up with the time, effort and money his meals were demanding. By testing on himself he developed the drink which will provide you will all the nutrition you need during your day to day life.

At first glance this product seems like the perfect frugal innovation. The developer made use of the knowledge we have on nutrition and made it into something cheap and easy to use. The ideal solution for people who don’t want to waste unnecessary time and money on nutrition you would say. With Soylent a meal almost changed to charging your battery to get back to work as fast as possible, and make the most of your time. 

It is true efficiency has become more and more important in our society. Society demands that we make the best out of ourselves, and most of the time we want to do that our self as well. This is why every step we take in this process is fine-tuned and optimized, or being optimized to be as efficient as possible and make as much progress as possible. A Soylent diet would be quit a good fit in this lifestyle and would optimize this process of eating completely. The question is do we want to optimize this, isn’t the social thing revolving around eating the thing that makes us human.

As Michael Pollan writes in his book, Cooked, “Cooking gave us not just the meal but also the occasion: the practice of eating together at an appointed time and place… But sitting down to common meals, making eye contact, sharing food, and exercising self-restraint all served to civilize us.”

It is for a reason we have been sharing meals as long as we can remember, the whole interaction between our species started in shared interest in food and realizing that it is easier to obtain this together. So let’s take those few scares moments, of the day filled with doing your brainless job which is optimized to the maximum so you have to think as little as possible, where you can take a rest for a second and act social. Isn’t this social interaction as humans pretty much the only feature left that separates us from the clever robots we created?

Joylent is a very clever frugal innovation in the nutrition sector, but for me it is not a responsible innovation. It may be very practical to use Joylent to replace meal once, but let’s please not forget where social interaction between humans started.

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Tata Nano car frugal or not?

In this column the Tata Nano car will be discussed. Is it a frugal innovation and is it contributing to inclusive development? These questions will be answered.

In this column the Tata Nano car will be discussed. Is it a frugal innovation and is it contributing to inclusive development? These questions will be answered.

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Few people come with brilliant ideas that change the world. Einstein discovered that time is relative. Newton discovered the basic laws of physics. These discoveries changed the world. Some innovation are not science related but also changed the world bigtime. The car, for example changed the way we transport and the TV created a whole new market. There are new kind of innovations that take place in especially poor countries. These innovations are called frugal innovations. Frugal innovations are innovations that reduce the complexity and cost. These product are for people that have to live from less than $2 a day. You have two kinds of frugal innovation. On the one hand you have frugal innovations where one existing technical product or service that is stripped from its luxury attributes but the basic technical functionalities remain intact in order to make sure it will be functioning. They can  reduce costs of a product between 50% to 97% .This sounds like frugal innovations are poor quality products, but they are not . On the other hand you have frugal innovations that are created or redesigned for potential customers.

In India you have for example a car that is the cheapest car in the world and is an alternative for the motor that a lot of people use in India. The Tata Nano car. This is a safer alternative to the motor bikes, because in India they ride with five people on a single motor bike. The car costs 100.000 rupees, $2000 at that time.  But is this an innovation that helps poor people? This car cannot be used in the EU because it has failed all the crash tests. So the question is, is this car really a safe alternative for the motor bike? The answer is no, the car cannot be used in the EU and the USA because of the big safety issues concerning the Tata Nano car. “The results were unequivocal. While the dummies were not quite beyond further use, the test centre reported that human passengers in the front seats would not have survived the crash. The vehicle was also given a zero-star rating for child protection, since it was not possible to install child seats in the car”. So this is not a car that really helps the poor people because it is just too unsafe to use. Is this Tata Nano car inclusive? Inclusive means that everyone enjoys the benefits of it and that the disadvantages facing the poor will be reduced. This car is built in India so it is creating job opportunities for poor people, therefore the Tata Nano car is contributing to inclusive development.  But there is no information about the standards which the workers work in. So are they working in normal standards, do they have a break, how long is a working day, all these aspects should be fine, otherwise it is not contributing to inclusive development. This car is not a big success because of the security issues but also for another reason. This car has a “cheap car” image and that does not appeal to lower income consumers in search of good-quality products. They should not have given the “cheap” part so much attention, because now they have an image problem. For the above reasons the Tata Nano car is not a good frugal innovation.

So to wrap it up, frugal innovations are innovations where the target group is people that earn less than $2 a day. These frugal innovation should not be unsafe, otherwise it will not be sold and it should not have a “cheap” image otherwise it will not be appealing to the target group. 

 

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Using less is better!

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Based on traditional business model especially American, they think bigger is better to produce new products due to consumerism ideology. However this approach does not work anymore for two reasons. First American and also European people are not willing to spend money on costly products or over-developed products. Second natural resources such as oil, minerals, water and trees are running out rapidly and they are becoming more and more expensive compared to the past. In addition to this, I believe the way people think about the world is changing too. We try to invent technology in sustainable way or let’s call responsible innovation.

Most of Western countries and some Asian countries succeeded to develop economically but there are still some countries mainly Africa where there are people who do not have enough food and starving due to many different factors it could be over population, pollution, disease and main cause is mostly likely no job opportunities. In order to solve this poverty issue, frugal innovation was introduced. Basically this is a bottom up approach, for example selling products really cheap so low income workers can afford. These days there are many CEOs from world well-known companies who are trying to solve this issue by applying frugal innovation. For instance, Paul Polman is the CEO from Unilever came up with an idea called Sustainable Living Plan. The goal of this strategy is to make its revenue 80 billion euros which is almost double the amount of revenue they have now at the same time halving environmental impacts by 2020. One of their innovative products is soap which kills virus faster with less water in Spain. Unilever is now trying to manufacture products which are less wasteful as well as energy efficient. Ultimately they want to achieve 4 billion consumers who are served socially and environmentally responsible way.

Furthermore, the CEO from Pearson John Fallon is also working on frugal innovation in area of education. His goal is to improve learning process with higher efficacy. Pearson’s business model has changed from selling books to selling digital educational services. I realized that even in Erasmus University Pearson is doing their business. For example when I took a weekly online test for mathematics, the developer of the software was Pearson. Instead of using books, implementing digital education saves trees and more efficient. Of course books are helpful but if there are more ways to fasten learning process we should try to use them as well. 

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Bringing back the individual by bringing 3D-printing to everyone

Column on how 3D-printing can bring back customisation combined with frugal innovations

Column on how 3D-printing can bring back customisation combined with frugal innovations

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Bringing back the individual by bringing 3D-printing to everyone

3D printing is one of the most encompassing innovations of the present world. While it has been around for quite a long time, it is only recently that buying a 3D-printer has become more attractive for regular consumers. It is not yet at the level that the “average Joe” can and will buy a printer. This will not be the case in the near future, but perhaps when we look longer term that the 3D-printer will play a part in everyone’s life.

                                                              

In a relatively short amount of time devices that used to sell for twenty thousand dollars now sell for thousand dollars. This shows that the market for these printers has grown and that the production costs are going down. With the increase in potential customers that comes with this decrease in price the potential of the 3D-printers will also increase.

In my personal environment I see the usage of 3D-printers increase. They are however, only being used for fun-projects. That is also mostly the only thing they can be used for at the moment in private. The printers that consumers buy work with plastics nine out of ten times. With plastics you  can only make a limited amount of possible products with the printers now available. That does not mean these products cannot already have a big impact on society. For example with plastics it is possible to create all kinds of household goods. A great site for downloading all kinds of products to create yourself is Thingiverse.com.

But what does the future hold for 3D-printing. For it to become a worldwide necessity it also has to become worldwide available for everyone. 3D-printing is already being used for a lot of things not on the personal consumer base.

I feel however that the real power of the 3D-printers is on the personal level. Frugal innovations are about making products available to everyone. This is great, it brings products that were previously out of reach to the public available to everyone. But this also comes at a cost. Frugal innovations have to bring down expenditure, which results in mass producing of the products. What this removes is customisation, it removes the personal level of the products.  

With 3D-printing, the customisation comes back into play. Everyone is different and has their own needs and expectations of products. 3D-printing will enable us to bring our own desires into the products we create. When I am buying furniture I would prefer it much more to add my own flairs to a certain product such as a closet. Perhaps I want it to have a totally different paintjob then the default one. Ikea does not allow this for me at the moment, 3D-printing would.

 

The present way of industry provides us with a limited choice for the products we would like to buy. Bringing 3D-printing to everyone might bring back the individual in the mass market by allowing customisation.

 

Bas Krijnen

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The Supermarket Of The Future

Frugal innovations come in all shapes and sizes. Why not tackle the Supermarket Industry?

Frugal innovations come in all shapes and sizes. Why not tackle the Supermarket Industry?

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Supermarkets are parts of our daily lives; we all visit them multiple times a week, sometimes every day. Buying fruits, yoghurt, meats and fish, anything we crave we can find in the aisles and aisles of packaged produce. Now take a step back and notice the word “packaged”. Do we realize that every time we buy something from the supermarket, that same pack of yoghurt or can of tuna, creates waste. We might not even notice it anymore, but almost all the products in supermarkets are packaged. Naturally of course, otherwise there would be awkward amounts of cereal on the floor if we did not have a box to put them in. But is that box really necessary though?

There is a new trend coming up called the “unpacked” grocery stores. These stores have been popping up all over Europe and the United States, paving the way for a more sustainable, inclusive and cheaper shopping experience for consumers. How does it work though? No cardboard, no cellophane, no throwaway plastic trays, and no brands.All products are displayed in jars, wooden crates, bins, practically anything durable you can put something in. You bring your own jar or container, grab the desired amount of what you need, put it in your own jar, pay for the weighed amount of product you put in your jar and you are ready to go!

A common risk with these types of projects is that of the price. If greener solutions aren’t affordable enough, they may end up underlining the sense that living a supposedly down to earth, less wasteful life is essentially a lifestyle hobby for people with enough spare cash. But it actually shows that in unpacked supermarkets most products cost a little less than they would at the average grocery store. This is how it should be, given that the store’s wholesale prices don’t have to cover the costs of packaging or of feeding major brands’ massive marketing budgets. Thus being a solution for a sustainable and cost efficient solution to what supermarkets embody now.

What is also interesting is that no amount of product is predefined. Everyone can grab as much or as little as they want based on what they want or need. A perfect solution for singles, specific recipes or even when you are a little low on cash. There is also no minimum limit on how much customers buy, to ensure that they get a fair deal. This is a great solution to the extreme amount of food wasted by consumers on a weekly basis due to over packaging (did you know that around 25% of the annually purchased amount of food goes to waste?!).

Lastly, the emergence of these types of grocery stores ensures economic benefit for local markets as no brand labels are used and the help of local farmers and food producers is well needed. For less developed countries, this would be a great project to invest in. It is a system that feeds itself, figuratively and quiet literally.

Now I’m not saying this is an airtight solution to our wasteful habits, granted not all products can be sold without the help of packaging and these stores are still small and upcoming. But the innovation has a lot of potential. In my opinion it is a cool perspective on frugal innovations. It literally takes away what we do not need (packaging) and generates a sustainable and inclusive end product. Saving money and giving the planet a greener hand, who would not vow for that?

Interested in the concept? Check out the first unpackaged grocery store in the Netherlands: Bag and Buy. http://bagandbuy.nl

Unfortunately their website is completely written in Dutch, sorry!

 

 

Sources: 

http://www.beunpackaged.com

http://www.onehundreddollarsamonth.com/food-waste-how-much-food-does-the-average-family-throw-away-in-one-year/

http://eatdrinkbetter.com/2014/06/09/6-grocery-stores-packaging-free/

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