Navi Radjou recently gave a very interesting TED Talk about what he calls "frugal innovation". This is a word I heard of before -- it was applied to Tata's very inexpensive cars. But in fact it can be found in many other applications.
According to Radjou, companies that want to innovate "frugally" need to follow three principles:
- Keep it simple, don’t try to impress customers
- Leverage assets/networks that are already
- Connect horizontally, don’t centralize the supply chain
Here are a few highlights from the video:
Consumption of fewer resources
For example, of a small yogurt factory in Bangladesh that relies on low automation in order to keep investment down and operations simple.
Lower complexity
For example, Siemens Healthcare developed a CT scanner that can be used by less skilled workers such as nurses, and allows for a higher turnaround of patients per day. It was designed for the Chinese market but now sells very well in the US. It reduces costs but also the amount of radiation per scan.
Startups use simplicity to disrupt traditional industries
In France, a startup (Compte Nickel) offers basic banking services for a flat fee of 20 euros a year. And 75% of the customers are middle class people who want to escape high banking fees!
Low-tech solutions can be just as good
For example, IBM Kenya uses low-resolution webcams and their software to send text messages to drivers about road conditions. Forget about sophisticated sensors, smartphones, internet connections, and so on.
