Exploring The Dark Side of Frugal Innovation: November 2019

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/337641927
Exploring the dark side of frugal innovation
Chapter · November 2019

DOI: 10.4324/9780429025679-19
CITATIONS READS
0 713
3 authors:
Adela Mcmurray Chamindika Weerakoon

RMIT University Swinburne University of Technology
148 PUBLICATIONS 1,378 CITATIONS 18 PUBLICATIONS 106 CITATIONS
SEE PROFILE SEE PROFILE
Daniel Etse
Kumasi Polytechnic
11 PUBLICATIONS 41 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
Chapter in a book View project
Social innovation processes of social enterprises View project
All content following this page was uploaded by Chamindika Weerakoon on 17 October 2020.
The user has requested enhancement of the downloaded file.

19 Exploring the dark side of
frugal innovation
Adela J. McMurray, Chamindika Weerakoon,
and Daniel Etse
Introduction
Frugal innovation (FI) has emerged as an important phenomenon for address-
ing critical challenges in developing countries (Hossain, 2018), as well as the
developed Western economies (Kuo & Ng, 2016). FI is a novel and creative
approach which uses less material and financial resources to develop products
and solutions that are fit for purpose, substantially affordable, simple and adapt-
able, and which deliver optimum performance (Basu, Banerjee, and Sweeny,
2013; Hossain, 2018). This concept continues to receive considerable attention
from scholars, practitioners, and policy-makers (Hossain, 2017; Pisoni,
Michelini, & Martignoni, 2018). The focus of the extant literature has so far
been on issues relating to manufacturing (Goel & Kalamdhad, 2018); product
innovation management (Sharmelly & Ray, 2018); and bio-technology
(Machala & Graves, 2018) and sustainability. Most of these issues have been
investigated from business management perspectives with specific attention to
areas such as value capture and value creation (Howell, van Beers, and Doorn,
2018), co-production (Annala, Sarin, & Green, 2018), and business model
development (Rosca, Arnold, & Bendul 2017). The existing literature
however, provides little information regarding the negative effects of FI,
Copyright © 2019. Taylor & Francis Group. All rights reserved.
though this knowledge is necessary for a more holistic understanding of the

concept. To address this research oversight, this chapter explores the dark side
of FI. Using multiple mini-case studies, this chapter highlights several unfa-
vourable aspects relative to FI mindset, process, and products.
We extend the current FI discussion into unchartered waters which we
label as the “dark side” and inconvenient truth about FI. “Even though FI
clearly contributes to sustainable development by providing affordable prod-
ucts to low income customers they have negative sides which have not been
explored in the extant literature” (Hossain, 2018, p. 934). Although FI allevi-
ates poverty while creating a win–win situation for companies with higher
profits (Prahalad, 2006), there are negative impacts which would worsen the
capitalist exploitation and inequality surrounding this phenomenon (Schwittay,
Badiane, & Berdish 2011). Even though FI aims to provide total product solu-
tions (Mendoza & Thelen, 2008) and introduce new markets, this process may
Frugal Innovation : A Global Research Companion, edited by Adela J. McMurray, and Waal, Gerrit A. de, Taylor & Francis Group,
2019. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/swin/detail.action?docID=5986717.
Created from swin on 2020-10-17 00:46:05.
312 Adela J. McMurray et al.
create new vulnerabilities, disrupt social harmony, and jeopardise local entre-
preneurs (Ansari, Munir, & Gregg, 2012). Therefore, this chapter provides a
fruitful discussion on this topical but overlooked area that we identify as the
dark side of FI, which we view as being a planetary emergency.
The frugal innovation concept and characteristics

A variety of terminologies has been used to refer to the concept of FI; these
include: creative improvisation or Jugaad, reverse innovation, inclusive
innovation, and catalytic innovation (Bhatti & Ventresca, 2013; Radjou,
Prabhu, & Ahuja, 2012; Vadakkepat, Garg, Loh, & Tham, 2015). The major
defining characteristics of FI as per the extant literature include: innovation
emerging from resource constrained context (Agarwal, Grottke, Mishra, &
Brem, 2017; Brem & Wolfram, 2014); significant cost reduction of products
or services (Basu et al., 2013; Weyrauch & Herstatt, 2016); fitness for
purpose or good enough products (George, McGahan, & Prabhu, 2012;
Hossain, 2017); accessibility (Basu et al., 2013; Bhatti & Ventresca, 2013); and
usability, that is, simplicity and adaptability (Brem & Wolfram, 2014; Melkas,
Oikarinen, & Pekkarinen, 2018). Therefore, FI may be defined as innovation
that emanates from a resource-constrained situation which is used to create
affordable and quality products and solutions for lower socio-economics
groups especially those in developing countries (Meagher, 2018; Pansera,
2018; Rosca et al., 2017).
Outcome
$VDSURGXFWVHUYLFH6RQ\DQG&KULVKQDQ9DULDWLRQV
LQFOXGHGLVUXSWLYHLQQRYDWLRQ&KULVWHQVHQ%23
LQQRYDWLRQ3UDKDODGUHYHUVHLQQRYDWLRQ*RYLQGDUDMDQ
DQG5DPDPXUWL
Process
$VDZRUNIORZ6RQ\DQG&KULVKQDQ9DULDWLRQVLQFOXGH
)UXJDOHQJLQHHULQJ6HKJDOHWDO/HDQPDQXIDFWXULQJ
DSSURDFK:RPDFNHWDO
Mindset
$VDZD\RIOLIH6RQ\DQG &KULVKQDQ9DULDWLRQVLQFOXGH
-XJDDG.ULVKQDQEULFRODJH%DNHUDQG1HOVRQ
(IIHFWXDWLRQ6DUDVYDWK\LPSURYLVDWLRQ)HOGPDQDQG
3HQWODQG*DQGKLDQLQQRYDWLRQ3UDKDODGDQG0DVKHONDU
,QFOXVLYHLQQRYDWLRQ*HRUJHHWDO
Figure 19.1 The variations of FI.

Source: Adapted from Soni and Krishnan (2014).
The dark side of frugal innovation 313
The FI concept remains under-theorised (Bhatti, 2012; George et al.,
2012) given the conflated use of the term with other innovation concepts
such as reverse innovation (Govindarajan & Ramamurti, 2011) and frugal
engineering (Sehgal, Dehoff, & Panneer, 2010). Despite these different inter-
pretations, Soni and Krishnan’s (2014) definition which focuses on three
layers of conceptualisation – mindset, process, and product (Figure 19.1) –
offers a sound framework for our discussion.
At the basic level FI is identified as a mindset which is not limited to
entrepreneurs, or innovators, but is applicable to all individuals (Soni &
Krishnan, 2014). The second layer addresses the activity level of FI which
could be manifested as processes or work flows such as the lean manufac-
turing approach and frugal engineering. The essential characteristic of this
level is that the innovation outcome may not be frugal but the process
behind the innovation is based on frugality, such as minimising the
resource usage and excluding non-value adding components. The third
level of FI captures the frugal products and services where the final output
itself is based on frugality principles. The frugal outcomes may take the
shape of new technologies, disruptive innovations, reverse innovations,
and bottom-of-the-pyramid innovations (Govindarajan & Ramamurti,
2011; Prahalad, 2006). Taken together, in this chapter we define FI as a
mindset, business model, process, good, and service which is driven by the
considerations of resource scarcity as well as product affordability, quality,
usability, and accessibility.
Methodology
This study adopted a qualitative research design (Yin, 2013). Specifically, we
adopt a collective case study design to illustrate the issues (Creswell, 2007)
identified in relation to frugal innovation. While operating on a qualitative case
study design, we purposively selected the multiple cases to reflect different per-
spectives on the dark side of frugal innovation with the aim of providing
insights into the discussed issues (Creswell, 2007). Such an approach treats the
cases as independent units and forms a holistic approach (Yin, 1994) producing
more robust, generalisable, and testable theory compared to single-case
approaches (Eisenhardt & Graebner, 2007). Furthermore, this approach elimin-
ates chance associations and offers more thorough evidence (Eisenhardt, 1989)
because of its ability to be replicated to extend the matter in question. Multiple
case study approach has widely been used in frugal innovation research
(e.g. Numminen, Lund, Yoon, & Urpelainen, 2018; Rosca et al., 2017). Thus,
multiple case studies were selected within different sectors to illustrate their
respective uniqueness but also possible similarities or differences; although not
with the intention to generalise as Yin (2009) would otherwise suggest.
These cases were collected from the materials available in the public
domain by accessing websites of case study organisations and newspaper
articles. Our literature review enabled the identification of main dark elements
and consequences of frugal innovation at three levels: frugal mindset, frugal
process, and frugal outcomes as depicted in Figure 19.1. We first describe the
dark elements of frugal innovation in aligning with three layers exhibited in
Figure 19.1 and support the identified issues with collective mini-cases to
illustrate the issue (Creswell, 2007) following the approach adopted by
Meagher (2018) and Pansera (2018). Hence, the focus was predominantly on
the issue with the cases we selected to understand the issue (Creswell, 2007,
p. 245). By so doing, this multiple case study approach (Brem & Freitag,
2015) provides rich data specifically suitable for research questions that call for
a grounded understanding of social or organisational processes (Cassell &
Symon, 2004).
Lincoln and Guba (1985) identified four criteria for demonstrating rigour
within qualitative research. Our approach in this study ensured those four
criteria: truth value, consistency, neutrality, and applicability. To satisfy the
truth value criteria, we ensured that the information obtained from the sec-
ondary data sources was presented as clearly and accurately as possible. To
ensure consistency and facilitate auditability of the data, a “decision trial”
approach (Noble & Smith, 2015) was adopted, by which the emerging
themes of the case studies were thoroughly discussed among the researchers
to reach consensus on the various issues. This approach made it possible for
individual views and assumptions to be critically interrogated and analysed
with the aim of ensuring data integrity, accuracy, and reliability. In relation
to the generalisability of the findings, analytical generalisation is assured in
this study (Yin, 1994). Therefore, generalisations are made from empirical
observations to theory (Yin, 1994). Hence, we considered the applicability
of findings to other settings. This process of assuring truth value, consist-
ency, and applicability confirms the neutrality of our approach. An overview
of the dark side of FI and related case studies are presented in the following
sections.
The potential dark side of frugal innovation

Perceived as innovation that explores resource-constrained situations to
create good-quality solutions for underserved low-income consumers, and
foster economic inclusion of the informal sector (Kahle, Dubiel, Ernst, &
Prabhu, 2013; Radjou & Prabhu, 2014a), FI has had a pretty clean outlook
over its relatively short years of existence. Apart from Meagher (2018) and
Pansera (2018) who have specifically raised issues regarding the inclusiveness
claim of FI, and the framing of scarcity in the extant FI literature respec-
tively, there are scarcely other publications that are critical of the FI phe-
nomenon. A more critical focus on the idea, process, and outcomes of FI
however, points to some disagreeable qualities and unintended con-
sequences of the phenomenon. The following subsections detail these
value-decreasing, sustainability-threatening, and dysfunctional activities and
related outcomes.
The dark side relative to frugal mindset
“Frugal innovation helps in repositioning the poor from passive recipients of
donations to active consumers” (Vadakkepat et al., 2015, p. 1). It “concen-
trates on integrating the poor into the formal economy … improves their
standard of living by creating an arena for interdependent social and eco-
nomic exchange” (Kahle et al., 2013, p. 222). Statements such as the preced-
ing quotations are common in the budding FI literature. On their face value,
these are beautiful statements which should ordinarily provide a sense of relief
to those concerned about the plights of the poor, as well as gladden the hearts
of four billion or more inhabitants of the globe who fit this categorisation.
However, history has shown that interventions that have been packaged
deliberately for the poor, for example, structural adjustment, and foreign aid
programmes which have themselves done poorly over the years (Dolan &
Roll, 2013; Saad-Filho, 2007). This provides strong justification for the need
to critically examine solutions and interventions such as FI that claim to be
for the poor.
Poverty mentality
The FI concept is one that comes with a tag, unfortunately an unattractive
one. A majority of the FI literature conceptualises FI as the innovation for the
poor and developing countries (Meagher, 2018; Rosca et al., 2017), and some
of its customers have been described as the poorest of the poor (Vadakkepat
et al., 2015). We argue that such labelling of FI is problematic at least in three
major ways: it is polarising; it may stifle development; and it reinforces and
promotes class society. These assertions are discussed in the following
subsections:
The idea of frugal innovation is polarising

The association of FI with the poor and developing countries in a way differ-
entiates between innovations that are tailored for developing countries and
the poor and those that are meant for the developed countries and the higher
socio-economic populations. This labelling is polarising and divisive, not
only because it draws a divide between the poor and developing countries on
one hand, and the rich and developed countries on the other hand but also
because it distinguishes between who should be interested in the concept and
who could afford to ignore it. A recent study by Melkas et al. (2018) suggests
a lack of interest in FI among some researchers in a Finland university due to
the perception that the concept had very little to do with their context. With
respect to the consumption of FI products and services by the poor, Angot
and Plé (2015) observed that customers are likely to quit buying FI offers if
they exit from poverty. This observation appears valid because if FI is under-
stood as innovation for the poor, what happens if a customer’s financial
situation improves and they are no longer poor? We argue that there are
more important qualities of FI which when highlighted could enhance the
consumption of FI solutions and engender interest in the concept across
various spectrum of society. Prudent and efficient utilisation of resources,
sustainability considerations, robust products, cost minimisation, and optim-
ised performance (Hossain, 2018; Radjou & Prabhu, 2014a; Rosca et al.,
2017) are examples of FI attributes that can appeal to people irrespective of
their socio-economic background. Emphasis should be on FI qualities that
foster inclusion and portray a sense of responsibility rather than on attributes
that polarise and stigmatise.
Frugal innovation may stifle development

Poverty is not just the scarcity of resources or technology, it is a socially
constructed phenomenon and a political strategy for perpetuating eco-
nomic, social, and political inequality in favour of the elite, to justify why
some are entitled to have and others are not (Hildyard, 2018; Pansera,
2018). There are examples, some highlighted in Hildyard (2018), that
suggest the use of scarcity/poverty to justify governments’ failure to deliver
much-needed public goods. It is known that corporations create demand
for goods and services which hitherto did not exist (Dolan & Roll, 2013;
Hildyard, 2018), thus sustaining the demand and supply mismatch to the
benefit of the businesses and the impoverishment of others. Specific to FI,
a number of solutions, including Frontier Market’s solar-powered torches
for rural India, and the Mitticool refrigerator which functions without
electricity (The Guradian, 2018), are being used to address the unavailabil-
ity of electricity in many Indian communities. There is, however, the need
to realise that these solutions are temporary and unable to address the
fundamental socio-economic problems. For example, though the solar-
powered torches and the Mitticool refrigerators are ingenious and useful,
they do not address India’s fundamental problem of lack of adequate and

reliable electricity supply. The inherent danger however, is the situation
where these stop-gap measures are used by government authorities, and the
political elites, as permanent solutions to the fundamental infrastructural
and social amenity challenges, as is the situation in many developing
countries.
A more serious related issue is with respect to the labelling of FI as under-
developed countries’ and poor peoples’ version of innovation. This makes
this type of innovation a handy tool for those who seek to perpetuate the
elites’ hegemony, as it can conveniently be used to justify why some can
drive in “normal/standard” cars and others in “miniature” ones, why some
can use “standard” refrigerators and others “improvised” ones, why there is
no need for government to fix that road or build that hospital because a less
expensive alternative can be improvised. This is not in any way to denigrate
some fantastic products or solutions provided by FI, some which have even
been found to outperform the standard alternatives, but to highlight implica-
tions of the labelling and the social construction of this innovation.
We further argue that this conceptualisation of FI could stifle individual
and national development. Continuously reminding people of their poverty
and creating products and solutions to match their status could be disempow-
ering, as poverty mentality has the proclivity to foster risk-averse and short-
sighted decision-making, habitual behaviours, and avoidance of goal-directed
ones, which together reinforce and sustain poverty (Haushofer & Fehr, 2014;
Sheehy-Skeffington & Rea, 2017). In this way, peoples’ creative and produc-
tive capabilities could be constrained; this will have adverse repercussions for
their development as individuals, which will in turn affect their contribution
to national development.
Furthermore, the poverty mentality reinforced by FI is likely to serve the
interest of unproductive and incompetent political leaders, who instead of
taking the hard decisions to address the infrastructural and institutional prob-
lems of their countries may result to improvised solutions. For example,
instead of providing a safe and efficient public transport system, such govern-
ments may resort to frugal solutions, which may not be able to address the
fundamental issues of infrastructural deficiency. The application of FI as a
quick-fix approach to dealing with major social and national problems comes
to light with the use of Aboboyaa, a motorised tricycle (Figure 19.2), popular
in Ghana and other West African countries.
Aboboyaa is used for carting of goods, transportation of passengers, for
purposes of sanitation and waste collection, and recently it is used to
Figure 19.2 Aboboyaa.
Source: Image by Mesh in Fonibia (Producer). (2018). Aboboya Motor Trycicle. Retrieved
from https://fonibia.com/photo/aboboyaa-motor-tricycle_269.
provide ambulance services. This low-cost, no-frills, simple and scalable
innovation has drastically changed the transportation and haulage land-
scape in Ghana by becoming one of the leading means of transportation in
both the urban and rural areas of the country (Asiedu-Addo, 2015). Spe-
cifically, it has contributed significantly to easing transportation challenges
in the rural areas of the country, including transporting the sick and
others in need of urgent medical attention to the nearest health facility
(Asiedu-Addo, 2015).
Although this motorised tricycle continues to play important roles in
Ghana’s socio-economic activities, it is incapable of addressing the funda-
mental issues of transportation, sanitation, and health challenges. The
concern, however, is the rate at which government entities and political
leaders are resorting to it to address systemic national challenges. When it
was first introduced in the country more than a decade ago, Aboboyaa was
used mainly for carting of goods (Asiedu-Addo, 2015). It was later deployed
by the government for waste collection purposes, and recently another
innovative use has been found for it in the health sector; to provide ambu-
lance services (Appia-Korang, 2018). The danger with such FIs is that, they
may become a convenient way of circumventing fundamental developmental
challenges that need to be confronted head-on and addressed comprehen-
sively. In effect, real and sustainable development may suffer, as political
leaders, especially those in developing countries, may resort to the frugal,
convenient, and easy approach, instead of engaging in deep and serious
thinking, and taking bold decisions to address the systemic and fundamental
development challenges.
Frugal innovation may promote a class society

FI introduces another way of stratifying society, this time along innovation
lines: innovation for the developed countries, and innovation for the
developing countries; innovation for the rich, and innovation for the poor.
This is not healthy for a world which is struggling to deal with social
inequalities and rising class conflicts (Kraus, Park, and Tan, 2017).
Moreover, FI is constructed in a way that creates the impression that
the innovators are doing the lower socio-economic populations a favour.
Statements such as “FI places affordable products and solutions in the hands
of those at the base of the pyramid, leading to empowerment and improve-
ment of their lives” (Vadakkepat et al., 2015, p. 1), which are rather
commonplace in the FI literature, highlight the construction of frugal
innovators as benefactors of the poor. This misleading impression has the
potential of creating a sense of dependence, helplessness, and incompetence
in these customers/consumers at the so called BOP (Grant & Dutton,
2012); this in turn will strengthen the power position of the innovators rel-
ative to the customers, thus keeping the latter perpetually at the mercy of
the former (Emerson, 1962).
Dark side of the FI process
In the context of this chapter we use FI process to refer to activities and actions
that are entailed in the design, development, production, and distribution of
frugal products, services, or solutions. The process essentially entails the design
or redesign of a product, service, or solution (Rao, 2013); repackaging a
product into smaller lots (Angot & Plé, 2015); provision of goods or services on
rental basis rather than outright sale (Prabhu & Jain, 2015); scraping off nones-
sential parts (Hossain, 2018); making use of local materials, locally embedded
knowledge, and network (Meagher, 2018); and using local human resource to
market and distribute products, services and solutions (Dolan & Roll, 2013).
We argue that the FI process comes with issues of product or service quality,
unfair practices, and exploitation of actors in the informal economy, environ-
mental degradation, and dilution of the concept of innovation.
No frills strategy and resultant quality degradation

The no-frills and other frugal strategies have implications for product quality
and image. For example, the much-talked-about frugal car Tata Nano, is
known to have issues with safety standards and quality, as a number of these
vehicles are known to have burst into flames (Mahendra, 2017; Tiwari &
Herstatt, 2014). Another Jugaad innovation example is Renault’s entry-level
Kiwid. This vehicle saves cost, is city-suitable, and sells across markets includ-
ing India (Attias, 2016). This French and Japanese engineering-consulted FI car
reportedly failed in testing as it scored low in adult occupancy protection
(AOP), child occupant protection (COP) and zero in safety assist technologies
(SAT) (Auto–The Economic Times, 2018). There are many instances where
the no-frills nature exposes users to considerable risk. The point here is that the
no-frills attribute of FI comes with issues of safety and quality, as seen in the
case of Aboboyaa. A serious issue related to this means of transport is the spate
of accidents that characterise its use. It is involved in a number of gory acci-

dents recorded in the country in recent times (Ghana Web, 2016; Ultimate
FM, 2017). Because this is a no-frills vehicle which consists mostly of the very
basic essential parts – the motor and the metal frame –, safety becomes a serious
issue. The metal covering is often light, and there are no protective cushions
which could mitigate the impact of a collusion. Moreover, because it is simple
to operate, some of its riders happen to be people with little or no driving/
riding skills, or knowledge of road safety regulations, and often without licence
(Asiedu-Addo, 2015). Moreover, oversimplification may have negative
implications for the acquisition of requisite skills and knowledge, and this has
additional consequences for safety and efficiency.
Moreover, the no-frills strategy comes with image issues for the resultant
product, as these products appear inferior and are perceived as a poor peoples’
product (Tiwari & Herstatt, 2012). This is not to suggest that the elimination
of nonessential components of products to minimise resource utilisation is not
important; however this should not be done at the expense of the safety or
quality of the product or solution. We concur with suggestions that FI needs
to incorporate the twin objectives of reducing the total cost of ownership
while matching customers’ aspiration of quality and image (Tiwari & Her-
statt, 2012), and that the functionality of products in critical sectors such as
aerospace, defence, and healthcare should not be compromised for the sake of
frugality (Rao, 2013).
Processes driven by unfair and exploitative practices

There are unfair practices associated with the FI process, especially with
respect to the re-packaging and rebranding process. For example, it has been
found that Unilever’s individualised packaging targeted at BOP customers
comes with a higher cost per kilogram or litre than the standard pack (Angot
and Plé, 2015). Karnani’s review of several publications concluded that BOP
products and solutions were priced much higher than their non-branded
alternatives (Karnani, 2007). Thus, the poor, who FIs claim to be helping, end
up paying higher prices; this is a sad irony. Moreover, the re-engineering of
the distribution channel at the BOP through credit-based payment solutions
and micro-franchising arrangements have facilitated the shifting of cost from
the corporations to the local entrepreneurs, thus compelling the latter to
absorb interest payments, marketing costs, and turnover risks within their
meagre margins (Karamchandani, Kubzansky, & Frandano, 2009; Meagher,
2018). In this way the big corporations are benefiting at the expense of the
poor entrepreneurs. This is not only unfair but seriously borders on issues of
business ethics.
Other identified unfair and exploitative practices relative to the FI process
include: underpayment for labour (Karamchandani et al., 2009); crowding-
out traders in the informal sector (Meagher, 2018); and jeopardising informal
social networks (Dolan & Scott, 2009). There are instances where FI-based
companies facilitate their production processes with unacceptable and less

appropriate practices. For instance, IKEA, a well-known Swedish corporate
FI (Wohlfart, Bünger, Lang-Koetz, & Wagner, 2016) has been heavily criti-
cised for illegal logging of old-growth trees and use of child labour. IKEA
invented its flat-packed furniture in 1956 and became a USA market leader
by 2010 (Hagel, Brown, Wooll, & de Maar, 2015). A participatory experi-
ence to the customer, plus the unassembled and condensed pieces of furni-
ture, have removed many stages of the value chain which in turn has enabled
IKEA to offer customers lower prices. In this process, IKEA consumes nearly
1% of commercial wood supply in the world. For this purpose, it buys up
forests (in Romania and Karelia in Russia) to keep tighter control over the
wood it uses to produce its iconic, easy-to-assemble furniture. It is reported
that much of these leased forests consist of intact tracts of natural forests and
hence it is heavily criticised for illegal logging of old-growth trees in Karelia,
Russia (Protect the Forest 2016). Figure 19.3 below shows an example of
Figure 19.3 A cross-section of a 400-year-old tree branch used in IKEA’s product

range.
Source: Photo by Rutschman – Protect the Forest. (2016). Russian Conservation Expert Con-
firms the Criticism of Ikea’s Logging in Russian Karelia. Retrieved from http://skyddaskogen.
se/en/campaigns/news-about-ikea-in-carelia/2731-russian-forest-expert-about-ikea.
such incidents where Protect the Forest sent a cross-section of a 400-year-old

tree from one of IKEA’s clear-cuts to IKEA’s head office in Sweden, along
with a copy of the interview and a list of demands.

The Forest Stewardship Council reports that IKEA has made major devi-
ations from regulations, including cutting down 600-plus-year-old trees. Not
only has IKEA’s low cost strategy triggered mass consumption but also they
have often been criticised for tax avoidance in Australia, which has ultimately
contributed to unfair competition in the furniture retail market (Pascoe 2014,
2017). Further, Organised Crime and Corruption Reporting Project
(OCCRP) confirms that the Swedish retail giant IKEA has been reported to the
US Customs Department for importing duvet covers made in Turkmenistan
with forced labour (OCCRP, 2016).
In addition, the distribution of some of the frugal products and solutions is
done using under-priced labour. Karamchandani et al. (2009) observed that
enterprises are increasingly engaging low-income segments as distributors
basically because of the benefit of under-priced labour. In addition to exploit-
ing labour and informal institutions for their commercial benefits, FI enterprises
often employ ruthless strategies to side-line informal actors such as manufac-
turers, distributors, wholesalers, and others who do not represent their
interest (Meagher, 2018). These practices end up crowding out other players
from the informal economic sector, which until the encroachment of the
frugal innovators used to be the source of livelihood for a chunk of the
population of developing countries (Meagher, 2018). Furthermore, FI enter-
prises adopt aggressive marketing and distribution strategies which thrive
substantially on the social networks of the distributors (Dolan & Roll, 2013).
Consequently, these strategies of marketing products through personal ties
negatively affect relationships, and end up eroding local social capital (Dolan
& Scott, 2009; Meagher, 2018).
Environmental degradation
The FI philosophy and practice is not limited to emerging economies, but there
is a growing trend of application in developed Western economies (Kuo & Ng,
2016). Thus, the frugality concept and the related “voluntary simplicity” have
been a trend (Alexander, 2017). Hence, the frugality perspective is widely
applied in supply-chain management with the aim of producing goods and
services while restricting the undue consumption and waste of raw materials
and power sources (Fulconis, Pache, & Reynaud, 2018). For instance, these
frugality applications resulted in circular value chains which are referred to as
a broader pattern of circular economy1 (Murray, Skene, and Haynes, 2017) as
opposed to the linear value chains operated by a majority of the companies in
the world (Figure 19.4). In a linear value chain (Figure 19.4) products are
designed, produced, sold, and consumed and end up in landfills, while in
closed-loop value chains returns processes are encouraged and the manufac-
turer has the opportunity to capture additional value and integrate further
value chain activities (Guide, Harrison, and Van Wassenhove, 2003) by closing
the life-cycle of products and services. The FI literature considers circular
value chains as an effective approach to foster a FI culture in organisations

(Radjou & Prabhu, 2014b). For instance, in 2013, Kingfisher, a large European
home-improvement retailer, launched its circular-economy-driven closed-
loop value-innovation approach named “Net positive” which is well acknow-
ledged in the frugal innovation literature (e.g. Radjou & Prabhu, 2014b).
Under this approach products are developed from renewable or recycled
materials and they consume only renewable energy in their manufacture and
use. When they age or break, parts and materials from these products can be
used to make new products. The 2013 Net positive report mentions that they
sell 170 products with closed-loop credentials against an ambitious target of
1,000 products by 2020 (Kingfisher, 2013). Based on thermodynamics laws,
Korhonen, Honkasalo, and Seppälä (2018) argued that although this circular
approach promoted recycling, reusing, and remanufacturing, they ultimately
lead to unsustainable levels of resource depletion, pollution, and waste
generation.
Linear value chain Closed loop value chain

Materials Manufacturing process reuse
sourcing and industrial symbiosis
Manufacturing Manufacturing
Manufacturing waste Logistics and
Raw auxiliary
materials products reuse
Limited recycling
Distribution
Distribution Logistics logistics
Materials
logistics waste
sourcing
Remanufacturing
Packaging
Sales and retail waste Sales
Product
recycling and and
materials retail
recovery
Consumption Consumption/
and use use waste Consumption
and use
Product
Manufacturing waste
Product reuse
Figure 19.4 Linear value chains vs. closed-loop value chains.
While we acknowledge the positive contributions of circular economy,

we highlight that businesses have not paid attention to the associated negative
outcomes. For instance, IKEA uses 1% of the world’s cotton production as
one of the primary raw materials for their products. They continue to
emphasise sustainability practices through “better cotton initiative” for cotton
farming, proposals for a circular supply chain, and heavy usage of solar panels
and renewable energy in their stores. Yet, cotton farming is pesticide-
intensive and water-consuming leading to loss of soil fertility (Dai & Dong,
2014). As we reported earlier, there are more dangers linked to the illegal
logging practices of IKEA in their leased forests. For instance, degradation of
the forest poses a serious threat to biodiversity, including the extinction of
rare and endangered species; increase in soil erosion and landslides; increase in
CO2 release and climatic changes. Other issues of concern relative to IKEA’s
practices include: human rights abuses and disrespect for the basic needs of
local communities and their culture; corruption, crime, coercion, and money
laundering; reduction of royalties, taxes, and other charges paid by logging
companies to the producer States (Reboredo, 2013).
Furthermore, there are many FI solutions driven by green technologies
where they use solar energy. Vortex engineering developed a low-powered
ATM equipped with solar energy (Agarwal & Brem, 2017). This can function
in adverse weather conditions in India. The performance related to shorten and
simplified withdrawal and deposit process are commendable outcomes.
However, although both examples of IKEA’s solar panels and renewable
energy usage and Vortex’s solar ATMs seems to be sustainable and eco-
friendly, they entail adverse environmental effects, as recycling of solar panels is
extremely difficult, energy consuming, and highly toxic (Murray et al., 2017),
thus leading to the environmental degradation. Further, a mere cyclic flow
does not guarantee a sustainable outcome because when the forest residues
from cuttings are used as a source for renewable energy and for substituting
fossil fuel combustion, the most nutrient-rich parts of trees and branches are
removed from the forest ecosystem and hence lose biodiversity and, in turn,
forest growth (Korhonen et al., 2018). In addition, much energy is wasted
because of the machinery used to drive these operations. Thus, the dependence
on technology for environmental advancement exposes nature’s triple bottom
line to high risk (Murray et al., 2017). Thus, we suggest greater efforts to
understand and disseminate to the public more information about the strategies
for social and institutional changes which can effectively transform the produc-
tion and consumption processes (Bocken, Olivetti, Cullen, Potting, & Lifset,
2017; Hobson & Lynch, 2016).
Job losses and alienation

Crowdsourcing strategies are widely applied in digital developments associ-
ated with FI and open innovation contexts (Hossain & Kauranen, 2015). One
of the main examples is Giffgaff, a mobile telephone network in the UK. For
instance, Giffgaff, operates as a mobile virtual network operator using the O2
network and is owned by Telefónica. Giffgaff is run by the users who totally
perform the sales and support of the company. Members who answer ques-
tions in the community space generate sales to new users. They are incentiv-
ised by giving “Payback” points which can later be redeemed as cash, airtime
credit, or donated to charity (Radjou & Prabhu, 2014b). Although this is an
attractive cost-effective mechanism for Giffgaff, the danger of this is the job
displacement of the users (Stelmaszak, 2016) caused by user-generated job
loss. Crowdsourcing arrangements can have serious impact on eliminating
professional positions from firms that are typically filled by entry-level,
millennial-aged workers. In addition, these activities can play the role of a
“disruptive innovation” and influence creative fields such as advertising,

design, and data research, leading to significant job losses and displacements.
Furthermore, such crowdsourcing arrangements can lead to the elimination
off fulltime positions and the creation of digital “sweatshops” where the
underaged are employed and demanded to work long hours causing serious
health and wellbeing issues (Pearlson, Saunders, & Galletta, 2016).
Dilution of the innovation concept

Another dark side of the FI process is its dilution of the concept of innova-
tion. The Oslo manual defines innovation as the implementation of new or
significantly improved goods, services, or process, a new marketing method,
a new organisational method in business practices, workplace organisation,
or external relations (Gault, 2016). This definition and a number of others
emphasise the novelty or significant improvement aspects of products or
solutions which are referred to as innovation. We argue that some of the
practices or products referred to as FI raise serious questions. For instance,
how innovative are processes or activities such as mere repackaging and
rebranding of a product, copying existing informal practices, and freeriding
on existing networks? The question is, how new or significant are these
practices, and what difference are they making in the lives of the people
whose interests they claim to represent? While innovations in other jurisdic-
tions of the globe are focusing on phenomenal breakthroughs in business,
technology, and the sciences, the innovation associated with developing
countries is focusing on issues of repackaging and rebranding of detergents
and other such stuffs. Our argument here is that the concept of innovation is
being diluted and cheapened relative to some of the FI solutions and pro-
cesses. The next section identifies the dark side of FI outcomes.
Dark side of FI outcomes

While acknowledging the remarkable positive difference that a number of FI
initiatives have made in society – for instance the Jaipur Foot which has
restored mobility to over 400,000 people, and the Aravind Eye Care that has
helped prevent multitudes of blindness (Vadakkepat et al., 2015) – it is
important to draw attention to some of the unpleasant aspects of frugal
innovation so as to stimulate a more holistic discussion which hopefully will
lead to the rectification of these issues. In this section, we discuss three neg-
ative FI outcomes: unsustainable resource consumption; short-changing of
poor customers; and quality/image issues of products and solutions.
Unsustainable resource consumption

One of the often-trumpeted strengths of FI is its ability to reduce resource
utilisation (Melkas et al., 2018; Radjou & Prabhu, 2014a). Yet it appears the
opposite is rather the case. The two crucial, inconvenient truth core ques-
tions for us to address are:
How can FI lead to reduction in production and consumption while one

of its primary drivers is the proclivity of corporate entities especially the
multinational companies (MNCs) to tap business opportunities and profits
from the over 4 billion potential customers believed to be at the BoP?
(Angot & Plé, 2015; Rosca et al., 2017)
And
How can FI minimise production and consumption if the idea that

poverty can mainly be addressed by increasing the consumption of
material resources remains the central BoP concept?
(Pansera, 2018)
One of the fundamental motivations of FIs is the exploitation of the BOP
which is increasingly becoming attractive in terms of business opportunities
(Dolan & Roll, 2013; Tiwari & Herstatt, 2012), especially as the recent
2007/2008 global financial crisis has brought into question the validity of the
business model that focused almost exclusively on Western markets and afflu-
ent customers. The quest to capture the BOP has brought in its wake various
FI solutions and products, ranging from household cleaning agents to indus-
trial equipment; the target of FI which is the BOP is a huge market, in excess
of 4 billion people, constituting about two-thirds of the world’s population
(Angot & Plé, 2015). Producing for this market requires gigantic material and
other resource commitment. Though we acknowledge that the target of FI
cannot be all the people at the BOP, the aggressive distribution strategy with
which some of the MNCs are pushing their products, what Dolan and Roll
(2013) refer to as the “rural immersion programs”, indicates that a substantial
volume of products are landing onto the BOP.
Because FI products are cheaper, it often leads to higher demand, which in
turn leads to the use of more resources to be able to produce enough to meet
the increased demand. In effect, though FI may use fewer resources to
produce a unit of product, this might not necessarily lead to reduction in
resource consumption in aggregate terms, as more resources are used to
produce enough to meet the explosion in demand as result of lower prices.
This issue of unsustainable resource consumption is demonstrated in the
example of Aboboyaa. Because it is a lot cheaper than conventional vehicles,
many people are able to procure it, leading to a glut of this product every-
where, especially in the urban areas and the major towns of the country. In
effect, FI may lead to overproduction as well as overconsumption and their
attendant sustainability issues.
In addition, referring to the circular approaches (e.g. Kingfisher and pro-
posed plans of IKEA) we mentioned earlier, we argue that such approaches
promote more virgin resource usage. For instance, due to IKEA’s cost
advantage, it attracts new consumers from both lower-end market segments

with more affordable products and higher-end market segments with more
customised products for which consumers are willing to pay a premium
(Kortmann & Piller, 2016). With its ever-increasing customer base, IKEA
engages in massive production to meet its growing demand. This leads to
increased production and consumption (Wohlfart et al., 2016) with implica-
tions for environmental sustainability.
We argue that, although fewer materials may be used in producing a unit
of FI product or solution, in aggregate terms however, more material
resources end up being used in producing for BOP and the circular
economy. This is contrary to the much-celebrated claim of FI regarding
resource conservation. In effect, FI solutions are contributing to unsustainable
production and consumption, and this is injurious to the wellbeing of the
planet, whose carrying capacity is already under immense stress. Some may
argue: How then can the needs of those at the base of the pyramid be met if
more goods and services are not produced? To such arguments, our response
is: Not all the offerings of FI address needs, and indeed most of the offerings
do not address the real issues of people at BOP at all. For instance, a private
car does not become a necessity if there is a decent and reliable public trans-
port. So, the answer to the transportation problem of the low- or medium-
income earner in a developing country is not necessarily a miniature car, but
is about fixing the poor infrastructure, and the provision of a more sustainable
public transportation solution. A reliable and efficient train, tram, or bus
system will be more resource efficient and effective solution, in this regard.
The car is used in this instance just for the purpose of an example; similar
issues can be raised regarding many other FI products or solutions. As Pansera
(2018) rightly observed, addressing the issue of scarcity does not merely lie in
increasing material goods; it is more of an issue of social justice.
Short-changing poor customers

“Lipstick evangelism” by Dolan and Scott (2009) and a similar publication
(Dolan & Roll, 2013), give a sense of the intense and aggressive nature of the
customer recruitment drive adopted in the distribution of the MNCs’ prod-
ucts at the BOP. The marketing strategies have been described as aggressive
and intense (Dolan & Scott, 2009). With such strategies, poor consumers may
be lured into misusing their hard-earned money in buying products that may
be pretty much unnecessary given their economic situations. Karnani (2009)
intimated that such targeting of the poor as customers has the tendency of
misguiding them into wasting away their precious little resources on unneces-
sary goods and services which in some instances may even be detrimental to
their welfare. Initiatives by MNCs such as Coca-Cola, Pepsi, Nestle, DuPont
and others to use micro-entrepreneurs to get their products to every nook
and cranny of Africa and other developing countries (Dolan & Roll, 2013)
are likely to lead to increased purchase of these products by low-income cus-
tomers, and with the aggressiveness that characterises the promotion and dis-
tribution of these products it is almost a certainty that the vulnerable poor will
be lured into buying them. The heart-wrenching conscience question
however is, how needful is a product like Coca-Cola or Pepsi to a rural
dweller who earns less than a $1 a day?
Quality and image issue

Frugality is an enduring style of steady and well-organised corporate practices
in utilising economic resources to achieve long-term goals (Anderson & Lillis,
2011). It is a quality of prudence and responsibility which is worthy of acqui-
sition irrespective of whether one is operating in a resource constrained or
resource abundant environment. However, this does not appear to be the
kind of frugality being portrayed in the FI lexicon, as the latter’s focus seems
to be overwhelmingly about resource-constrained countries, and how to
improvise solutions for the poor. This mentality seems to be having a toll on
the quality of process as well as the outcomes of FI. Tata Nano, a classic
example of FI, has had its share of quality issues, with some of the vehicles
bursting into flame (Mahendra, 2017; Rao, 2013), and it is also found to be
deficient in some safety and convenience features (Zeschky, Widenmayer, and
Gassmann, 2015). Apart from its quality issues, what appears to be plaguing
this innovation even more is its image as a “poor peoples’ ” car. A quote from
the Financial Times cited in Tiwari and Herstatt (2012, p. 249) indicated that
sales performance of the car has been poor because “nobody wanted to buy
the world’s cheapest car”. So, in effect, not only does FI produce poor-quality
outcomes but also outcomes that come with the unattractive tag of poverty.
This image issue can again be demonstrated through the case of Aboboyaa.
The agitation and rage that greeted the introduction of the use of Aboboyaa
as ambulance (see Figure 19.5) (Ghana News, 2018; Tordjo, 2018) clearly
demonstrated that the citizens perceived that move as an affront to their
dignity.
In voicing their displeasure, many stated it was inhumane on the part of
the government to contemplate such an initiative (Tordjo, 2018). This is an
indication that, though people might be using Aboboyaa out of necessity,
they aspire to a more decent means of transportation. A study of consump-
tion behaviours of BOP customers in Asia, Africa, and Latin America by
Subrahmanyan and Gomez-Arias (2008) revealed that in spite of income con-
straints, these customers seek to buy products which do not carry the stigma
of being those of poor people, and that purchases are motivated not just by
survival and physiological needs but more importantly the desire to fulfil
higher order needs, either to build social capital for cultural reasons, or as a
Figure 19.5 Aboboyaa as ambulance.

Source: Ghana News, 2018.
compensatory mechanism. We suggest that hyping poverty for purposes of
economic or political gains may not do the poor any good; as Karnani puts it,
“romanticising the poor harms the poor” (Karnani, 2009), and the gains
thereof, are not sustainable. FI will be a more attractive and useful tool for
development if it focuses less on the poverty message, and dwells more on
the real strengths of FI, such as prudent and responsible resource utilisation,
affordability, optimised performance, sustainability, as well as quality and
durability.
Less agility towards customer preferences

Sustainability is a major concern in Western developed economies and hence,
customers tend to depend on affordable, good-enough products, voluntarily
reducing their consumptions and possessions toward a higher degree of fru-
gality (Kuo & Ng, 2016). As a response to this, businesses have developed
“sufficiency-based business models” under the circular-economy approaches
where sustainability is delivered by reducing absolute material usage and
energy consumption by encouraging consumers to make do with less
(Bocken & Short, 2016). Yet, the introduction of a circular-based business
model may lead to decreased sales if the new, longer-lasting products reduce
sales of the previous products (Guiltinan, 2009; Michaud & Llerena, 2011) by
being a disruptive innovation in the market. On one hand, this risk of profit
cannibalisation can hamper the production of long-lasting, customised quality
products (Oghazi & Mostaghel, 2018). On the other hand, such business
models are not agile to fashion changes which can make both consumers frus-
trated and also reduce the earnings of firms (Mont, Dalhammar, & Jacobsson,
2006). This is a substantial impact on the industries where attractiveness of a
product/service depends on aesthetic attributes of the product and remanufac-
turing places will increase demands on product design for modularity and/or
timelessness (Linder & Williander, 2017).
Moreover, the implementation and the capabilities required to succeed in

such circular-economy approaches create enormous challenges to the busi-
nesses and the economy. One potential challenge is that customers may
return products during the product life-cycle, at the end of use and at the end
of life, which requires a highly customised and cost-consuming approach to
reverse supply chain so as to optimise the value recovery (Guide, Harrison, &
Van Wassenhove, 2003). In addition, it is hard to make the modifications to
the system, and thus there is a lack of room for diverse models and variations.
Chopra (2013) refers to the dark side of innovation as the innovations
which destroy the innovative incumbent firms, creating limited options in the
market: if they follow the new innovation, they erode their profits and if they
avoid such innovation, they commit themselves to obsolescence. Hence, FI
may destroy the existing market by challenging the high-price market with
radically cheaper products (Lim & Fujimoto, 2019) often reflecting on a “dis-
ruptive innovation”. If a FI with previously mentioned dark aspects disrupts
the markets as mentioned by Chopra (2013), it will lead to highly unsustaina-
ble, challenging, and destructive market conditions. This is because, once a
disruptive innovation enters and consolidates in the market, the standards it
sets in the market will be dominating. This may ultimately create major chal-
lenges to the competition and customer choices in the market. This is clearly
illuminated in the following example. Tarkett is a world’s leading frugal floor
covering manufacturer (Radjou & Euchner, 2016). In October 2017, the
French Competition Authority imposed a EUR 302 million fine for price-
fixing, sharing commercially sensitive information, and signing a non-compe-
tition agreement relating to environmental performance advertising (Lesur &
Chutrova, 2017). This ruling was imposed not only on Tarkett but on the
other two members of this floor-covering cartel: Forbo and Gerflor. This
kind of behaviour may keep other firms out of the market, thus leading to
monopoly, with implications for customer choice and consumer sovereignty.
Conclusion
FI has sharpened focus on the need to use fewer resources to produce more
and better outcomes and solutions, and continues to contribute substantially
to addressing societal needs even under conditions of extreme scarcity. Like
other concepts, processes, and solutions, FI has its limitations and dark side.
The purpose of this chapter was to highlight some pertinent weaknesses of
the idea, process, and outcome of FI. The need to conserve and use resources
prudently is a universal responsibility; as such the relevance of FI need not be
limited to resource-constrained contexts.
This chapter addressed real and potential dark sides of FI relative to mindset,
process, and outcome. Issues highlighted include quality and safety; unfair and
exploitative practices; unsustainable environmental practices; and potential
consequences for individual and national development. These issues have been
raised with the hope of stimulating a more holistic and balanced discussion of
FI, and to inform decisions and strategies towards making it a more effective
tool for addressing the myriad woes of the global community. As a civilisation,
our moral compass may be compromised by the dark side of frugal innovation –
the side that people are deliberately ignoring or are utterly ignorant about.
Note
1 A circular economy is a regenerative system where the resource inputs, waste, and
energy are reused, recycled, and remanufactured to minimise the resource
exploitation.
References
Agarwal, N., & Brem, A. (2017). The frugal innovation case of solar-powered automated
teller machines (Atms) of vortex engineering in India. Journal of Entrepreneurship and
Innovation in Emerging Economies, 3(2), 115–126.
Agarwal, N., Grottke, M., Mishra, S., & Brem, A. (2017). A systematic literature
review of constraint-based innovations: State of the art and future perspectives.
IEEE Transactions on Engineering Management, 64(1), 3–15.
Alexander, S. (2017). Frugal abundance in an age of limits: envisioning a degrowth
economy. In E. Garcia, M. Martinez-Iglesias & P. Kirby (Eds.), Transitioning to a
post-carbon society (pp. 159–179). London: Springer.
Anderson, S. W., & Lillis, A. M. (2011). Corporate frugality: Theory, measurement
and practice. Contemporary Accounting Research, 28(4), 1349–1387.
Angot, J., & Plé, L. (2015). Serving poor people in rich countries: The bottom-of-
the-pyramid business model solution. Journal of Business Strategy, 35(2), 3–15.
Annala, L., Sarin, A., & Green, J. (2018). Co-production of frugal innovation: Case
of low cost reverse osmosis water filters in India. Journal of Cleaner Production, 171,
S110–S118.
Ansari, S., Munir, K., & Gregg, T. (2012). Impact at the ‘bottom of the pyramid’:
The role of social capital in capability development and community empowerment.
Journal of Management Studies, 49(4), 813–842.
Appia-Korang, J. (2018). KMA to use ‘Aboboyaa’ for solid waste management.
Retrieved from www.todaygh.com/kma-use-aboboyaa-solid-waste-management/
Asiedu-Addo, S. (2015). Tricycles: Help and danger on wheels. Retrieved from
www.graphic.com.gh/features/features/tricycles-help-and-danger-on-wheels.html.
Attias, D. (2016). The automobile revolution: Towards a new electro-mobility paradigm.
Cham, Switzerland: Springer.
Auto–The Economic Times. (2018). Renault Kwid scores zero star in Asean Ncap crash
test. Auto–The Economic Times, 11 July. Retrieved from https://auto.economictimes.
indiatimes.com/news/passenger-vehicle/cars/renault-kwid-scores-zero-star-in-asean-
ncap-crash-test/64951008.
Basu, R., Banerjee, P., & Sweeny, E. (2013). Frugal innovation: Core competencies to
address global sustainability. Journal of Management for Global Sustainability, 2, 63–82.
Bhatti, Y. (2012). What is frugal, what is innovation? Towards a theory of frugal innova-
tion. (1 February 2012). Available at SSRN: https://ssrn.com/abstract=2005910 or
http://dx.doi.org/10.2139/ssrn.2005910
Bhatti, Y., & Ventresca, M. (2013). How can ‘frugal innovation’ be conceptualized.
Said Business School Working Paper Series. Oxford.
Bocken, N. M., Olivetti, E. A., Cullen, J. M., Potting, J., & Lifset, R. (2017).
Taking the circularity to the next level: A special issue on the circular economy.
Journal of Industrial Ecology, 21(3), 476–482.
Bocken, N. M., & Short, S. (2016). Towards a sufficiency-driven business model:
Experiences and opportunities. Environmental Innovation and Societal Transitions, 18,
41–61.
Brem, A., & Freitag, F. (2015). Internationalisation of new product development and
research & development: Results from a multiple case study on companies with
innovation processes in Germany and India. International Journal of Innovation Man-
agement, 19(01), 1550010.
Brem, A., & Wolfram, P. (2014). Research and development from the bottom up –
introduction of terminologies for new product development in emerging markets.
Journal of Innovation and Entrepreneurship, 3(9), 3–22.
Cassell, C., & Symon, G. (2004). Essential guide to qualitative methods in organizational
research. London: Sage.
Chopra, A. (2013). The dark side of innovation. St Johnsbury, VT: Brigantine Media.
Creswell, J. W. (2007). Qualitative inquiry and research design: Choosing among five
approaches (2nd ed.). Thousand Oaks, CA, US: Sage Publications, Inc.
Dai, J., & Dong, H. (2014). Intensive cotton farming technologies in China:
Achievements, challenges and countermeasures. Field Crops Research, 155, 99–110.
Dolan, C., & Roll, K. (2013). ASR forum: Engaging with African informal eco-
nomies. African Studies Review, 56(03), 123–146.
Dolan, C., & Scott, L. (2009). Lipstick evangelism: Avon trading circles and gender
empowerment in South Africa. Gender & Development, 17(2), 203–218.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of
Management Review, 14(4), 532–550.
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Oppor-
tunities and challenges. The Academy of Management Journal, 50(1), 25–32.
Emerson, R. M. (1962). Power-dependence relations. American Sociological Review,
27(1), 31–41.
Fulconis, F., Pache, G., & Reynaud, E. (2018). Frugal supply chains: A managerial
and societal perspective. Society and Business Review, 14(3), 228–241. https://doi.
org/10.1108/SBR-06-2018-0059
Gault, F. (2016). Defining and measuring innovation in all sectors of the economy:
policy relevance. In Proceedings of the OECD Blue Sky Forum III, Ghent, Belgium.
19–21.
George, G., McGahan, A. M., & Prabhu, J. (2012). Innovation for inclusive growth:
Towards a theoretical framework and a research agenda. Journal of Management
Studies, 49(4), 661–683.
Ghana News. (2018). Hi tech “Aboboyaa” ambulances pop up in parliament.
Retrieved from http://ghananewsonline.com.gh/hi-tech-aboboyaa-ambulances-
pop-parliament/.
Ghana Web. (2016). 10 dead, two critically injured in gory accidents. Retrieved from
www.ghanaweb.com/GhanaHomePage/NewsArchive/10-Dead-two-critically-
injured-in-gory-accidents-432479.
Goel, G., & Kalamdhad, A. S. (2018). A practical proposal for utilisation of water
hyacinth: Recycling in fired bricks. Journal of Cleaner Production, 190, 261–271.
Govindarajan, V., & Ramamurti, R. (2011). Reverse innovation, emerging markets,
and global strategy. Global Strategy Journal, 1(3–4), 191–205.
Grant, A., & Dutton, J. (2012). Beneficiary or benefactor: Are people more prosocial
when they reflect on receiving or giving? Psychol. Sci, 23(9), 1033–1039.
Guide, V. D. R., Harrison, T. P., & Van Wassenhove, L. N. (2003). The challenge
of closed-loop supply chains. Interfaces, 33(6), 3–6.
Guiltinan, J. (2009). Creative destruction and destructive creations: Environmental
ethics and planned obsolescence. Journal of Business Ethics, 89(1), 19–28.
Hagel, J., Brown, J. S., Wooll, M., & de Maar, A. (2015). Patterns of disruption: Anticip-
ating disruptive strategies in a world of unicorns, black swans, and exponentials. Retrieved
from hwww2.deloitte.com/us/en/insights/focus/disruptive-strategy-patterns-case-
studies/anticipating-disruptive-strategy-of-market-entrants.html?icid=interactive:
pod:jun16
Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Science, 344(6186),
862–867.
Hildyard, N. (2018). Scarcity, ‘polite society’ and activism. Geoforum, 101, 294–298.
Hobson, K., & Lynch, N. (2016). Diversifying and de-growing the circular economy:
Radical social transformation in a resource-scarce world. Futures, 82, 15–25.
Hossain, M. (2017). Mapping the frugal innovation phenomenon. Technology in
Society, 51, 199–208.
Hossain, M. (2018). Frugal innovation: A review and research agenda. Journal of
Cleaner Production, 182, 926–936.
Hossain, M., & Kauranen, I. (2015). Crowdsourcing: A comprehensive literature
review. Strategic Outsourcing: An International Journal, 8(1), 2–22.
Howell, R., van Beers, C., & Doorn, N. (2018). Value capture and value creation:
The role of information technology in business models for frugal innovations in
Africa. Technological Forecasting and Social Change, 131, 227–239.
Kahle, H., Dubiel, A., Ernst, H., & Prabhu, J. (2013). The democratizing effects of
frugal innovation. Journal of Indian Business Research, 5(4), 220–234.
Karamchandani, A., Kubzansky, M., & Frandano, P. (2009). Emerging markets, emerg-
ing models: Market-based solutions to the challenges of global poverty. Cambridge.
Monitor Group.
Karnani, A. (2007). The mirage of marketing to the base of the pyramid: How the
private sector can help alleviate poverty. California Management Review, 49(4), 90–111.
Karnani, A. (2009). Romanticising the poor harms the poor. Journal of International
Development, 21(1), 76–86.
Kingfisher. (2013). The business opportunity of closed loop innovation: Kingfisher’s
progress towards products that waste nothing. Retrieved from www.kingfisher.
com/sustainability/files/downloads/kingfisher_closed_loop_innovation.pdf#ref_
closedloopinnovation.
Korhonen, J., Honkasalo, A., & Seppälä, J. (2018). Circular economy: The concept
and its limitations. Ecological Economics, 143, 37–46.
Kortmann, S., & Piller, F. (2016). Open business models and closed-loop value
chains: Redefining the firm-consumer relationship. California Management Review,
58(3), 88–108.
Kraus, M. W., Park, J. W., & Tan, J. J. X. (2017). Signs of social class: The experi-
ence of economic inequality in everyday life. Perspect. Psychol. Sci., 12(3), 422–435.
Kuo, A., & Ng, S. (2016). Frugal innovation: A strategy for emerging market pene-
tration and beyond.
Lesur, L., & Chutrova, E. (2017). Significant fine imposed by the French Competi-
tion Authority in floor coverings cartel. Retrieved from www.antitrustalert.
com/2017/10/articles/cartel-enforcement/significant-fine-imposed-by-the-french-
competition-authority-in-the-floor-coverings-cartel/.
Lim, C., & Fujimoto, T. (2019). Frugal innovation and design changes expanding the
cost-performance frontier: A Schumpeterian approach. Research Policy, 48(4),
1016–1029.
Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. Newbury Park, CA: Sage.
Linder, M., & Williander, M. (2017). Circular business model innovation: Inherent
uncertainties. Business Strategy and the Environment, 26(2), 182–196.
Machala, Z., & Graves, D. B. (2018). Frugal biotech applications of low-temperature
plasma. Trends in Biotechnology, 36(6), 579–581.
Mahendra, A. (2017). The Tata Nano might soon be killed and here’s why. Retrieved
from www.financialexpress.com/auto/car-news/tata-nano-being-stopped-ratan-tata-
new-amp-modular-platform/540454/.
Meagher, K. (2018). Cannibalizing the informal economy: Frugal inovation and eco-
nomic inclusion in Africa. The European Journal of Development Research, 30(1), 17–33.
Melkas, H., Oikarinen, T., & Pekkarinen, S. (2018). Understanding frugal innova-
tion: A case study of university professionals in developed countries. Innovation and
Development, 1–16.
Mendoza, R. U., & Thelen, N. (2008). Innovations to make markets more inclusive
for the poor. Development Policy Review, 26(4), 427–458.
Michaud, C., & Llerena, D. (2011). Green consumer behaviour: An experimental
analysis of willingness to pay for remanufactured products. Business Strategy and the
Environment, 20(6), 408–420.
Mont, O., Dalhammar, C., & Jacobsson, N. (2006). A new business model for baby
prams based on leasing and product remanufacturing. Journal of Cleaner Production,
14(17), 1509–1518.
Murray, A., Skene, K., & Haynes, K. (2017). The circular economy: An interdiscipli-
nary exploration of the concept and application in a global context. Journal of Business
Ethics, 140(3), 369–380.
Noble, H., & Smith, J. (2015). Issues of validity and reliability in qualitative research.
Evidence-based nursing, 18(2), 34–35.
Numminen, S., Lund, P. D., Yoon, S., & Urpelainen, J. (2018). Power availability
and reliability of solar pico-grids in rural areas: A case study from Northern India.
Sustainable Energy Technologies and Assessments, 29, 147–154.
OCCRP. (2016). Ikea’s alleged use of forced labor reported to US authorities.
Retrieved from www.occrp.org/en/daily/5128-ikea-s-alleged-use-of-forced-labor-
reported-to-us-authorities.
Oghazi, P., & Mostaghel, R. (2018). Circular business model challenges and lessons
learned—an industrial perspective. Sustainability, 10(3), 739.
Pansera, M. (2018). Frugal or fair: The unfulfilled promises of frugal innovation.

Technology Innovation Management Review, 8(4), 6–13.
Pascoe, M. (2014). Ikea’s unfair advantage. The Sunday Morning Herald. Retrieved
from www.smh.com.au/business/ikeas-unfair-advantage-20141106-11i4r4.html.
Pascoe, M. (2017). Ikea’s flatpacked tax bill shows it’s time to put screws on bean-
counters. The Sunday Morning Herald. Retrieved from www.smh.com.au/business/
the-economy/ikeas-flatpacked-tax-bill-shows-its-time-to-put-screws-on-bean
counters-20171229-h0bauz.html.
Pearlson, K. E., Saunders, C. S., & Galletta, D. F. (2016). Managing and using informa-
tion systems, binder ready version: A strategic approach. New York: John Wiley.
Pisoni, A., Michelini, L., & Martignoni, G. (2018). Frugal approach to innovation:
State of the art and future perspectives. Journal of Cleaner Production, 171, 107–126.
Prabhu, J., & Jain, S. (2015). Innovation and entrepreneurship in India: Under-
standing Jugaad. Asia Pacific Journal of Management, 32, 843–868.
Prahalad, C. K. (2006). The fortune at the bottom of the pyramid. India: Pearson Education.
Protect the Forest. (2016). Russian conservation expert confirms the criticism of Ikea’s
logging in Russian Karelia. Retrieved from http://skyddaskogen.se/en/campaigns/
news-about-ikea-in-carelia/2731-russian-forest-expert-about-ikea.
Radjou, N., & Euchner, J. (2016). The principles of frugal innovation: An interview
with Navi Radjou: Navi Radjou talks with Jim Euchner about Jugaad and frugal
innovation and their place in corporate R&D. Research-Technology Management,
59(4), 13–20.
Radjou, N., & Prabhu, J. (2014a). Frugal innovation: How to do more with less. London:
Profile Books.
Radjou, N., & Prabhu, J. (2014b, 10 December 2014). What frugal innovators do.
Harvard Business Review. Retrieved from https://hbr.org/2014/12/what-frugal-
innovators-do.
Radjou, N., Prabhu, J. C., & Ahuja, S. (2012). Jugaad innovation: Think frugal, be flex-
ible, generate breakthrough growth (1st ed.). San Francisco, CA: Jossey-Bass.
Rao, B. C. (2013). How disruptive is frugal? Technology in Society, 35(1), 65–73.
Reboredo, F. (2013). Socio-economic, environmental, and governance impacts of
illegal logging. Environment Systems and Decisions, 33(2), 295–304.
Rosca, E., Arnold, M., & Bendul, J. C. (2017). Business models for sustainable innova-
tion–an empirical analysis of frugal products and services. Journal of Cleaner Production,
162, S133-S145.
Saad-Filho, A. (2007). Life beyond the Washington consensus: An introduction to
pro-poor macroeconomic policies. Review of Political Economy, 19(4), 513–537.
Schwittay, A., Badiane, K., & Berdish, D. (2011). The marketization of poverty.
Current Anthropology, 52(S3), s71–s81.
Sehgal, V., Dehoff, K., & Panneer, G. (2010). The innovators-the importance of frugal
engineering – providing new goods and services to “bottom of the pyramid” cus-
tomers requires a radical rethinking of product development. Strategy and Business,
(59), 20.
Sharmelly, R., & Ray, P. K. (2018). The role of frugal innovation and collaborative
ecosystems: The case of Hyundai in India. Journal of General Management, 43(4),
157–174.
Sheehy-Skeffington, J., & Rea, J. (2017). How poverty affects people’s decision-making
processes. York: Joseph Rowntree Foundation.

Soni, P., & Krishnan, R. T. (2014). Frugal innovation: Aligning theory, practice, and
public policy. Journal of Indian Business Research, 6(1), 29–47.
Stelmaszak, M. (2016). What the future holds for the self-employed?. Retrieved from
https://blogs.lse.ac.uk/management/2016/06/06/what-the-future-hold-for-the-
self-employed/
Subrahmanyan, S., & Gomez-Arias, T. (2008). Integrated approach to understanding
consumer behavior at bottom of pyramid. Journal of Consumer Marketing, 25(7),
402–412.
The Guradian. (2018). From solar torches to bioloos: Five frugal innovations from
around the world. The Guardian. Retrieved from www.theguardian.com/business-
call-to-action-partnerzone/2018/apr/05/from-solar-torches-to-bioloos-five-frugal-
innovations-from-around-the-world.
Tiwari, K., & Herstatt, C. (2012). Frugal innovation: A global networks’ perspective.
Swiss Journal of Business Research and Practice, 66(3), 245–274.
Tiwari, K., & Herstatt, C. (2014). aiming big with small cars: Emergence of a lead market
in India. Heidelberg: Springer.
Tordjo, V. (2018). The ‘Aboboyaa’ ambulance, is it out of place. Retrieved from
www.ghanaweb.com/GhanaHomePage/features/Kojo-Tordjo-Victor-writes-The-
Aboboyaa-ambulance-is-it-out-of-place-661503.
Ultimate FM. (2017). Fatal motor bike accidents in a/r alarming – Nrsc. Retrieved
from http://78.47.45.183/agency/ultimate-fm/20170411/38876092/fatal-motor-
bike-accidents-in-ar-alarming-nrsc
Vadakkepat, P., Garg, H. K., Loh, A. P., & Tham, M. P. (2015). Inclusive innova-
tion: Getting more from less for more Journal of Frugal Innovation, 1(1), 1–2.
Weyrauch, T., & Herstatt, C. (2016). What is frugal innovation? Three defining cri-
teria. Journal of Frugal Innovation, 2(1), 1–17.
Wohlfart, L., Bünger, M., Lang-Koetz, C., & Wagner, F. (2016). Corporate and
grassroot frugal innovation: A comparison of top-down and bottom-up strategies.
Technology Innovation Management Review, 6(4), 5–17.
Yin, R. K. (1994). Case study research: Design and methods. New York: Sage.
Yin, R. K. (2009). Case study research: design and methods. Applied social research methods.
London: Sage.
Yin, R. K. (2013). Case study research: Design and methods. Thousand Oaks, CA: Sage.
Zeschky, M., Widenmayer, B., & Gassmann, O. (2015). Frugal innovation in emerging
markets. Research-Technology Management, 54(4), 38–45.
View publication stats

Exploring The Dark Side of Frugal Innovation: November 2019

Uploaded by

Copyright:

Available Formats

Exploring The Dark Side of Frugal Innovation: November 2019

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Exploring The Dark Side of Frugal Innovation: November 2019

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Exploring the dark side of frugal innovation

Chapter · November 2019

Adela Mcmurray Chamindika Weerakoon

SEE PROFILE SEE PROFILE

Chapter in a book View project

Social innovation processes of social enterprises View project

The user has requested enhancement of the downloaded file.

though this knowledge is necessary for a more holistic understanding of the

The frugal innovation concept and characteristics

Figure 19.1 The variations of FI.

The potential dark side of frugal innovation

The idea of frugal innovation is polarising

Frugal innovation may stifle development

they do not address India’s fundamental problem of lack of adequate and

Frugal innovation may promote a class society

No frills strategy and resultant quality degradation

of accidents that characterise its use. It is involved in a number of gory acci-

Processes driven by unfair and exploitative practices

companies facilitate their production processes with unacceptable and less

Figure 19.3 A cross-section of a 400-year-old tree branch used in IKEA’s product

such incidents where Protect the Forest sent a cross-section of a 400-year-old

with a copy of the interview and a list of demands.

value chains as an effective approach to foster a FI culture in organisations

Linear value chain Closed loop value chain

Figure 19.4 Linear value chains vs. closed-loop value chains.

While we acknowledge the positive contributions of circular economy,

Job losses and alienation

“disruptive innovation” and influence creative fields such as advertising,

Dilution of the innovation concept

Dark side of FI outcomes

Unsustainable resource consumption

How can FI lead to reduction in production and consumption while one

How can FI minimise production and consumption if the idea that

advantage, it attracts new consumers from both lower-end market segments

Short-changing poor customers

Quality and image issue

Figure 19.5 Aboboyaa as ambulance.

Less agility towards customer preferences

Moreover, the implementation and the capabilities required to succeed in

Pansera, M. (2018). Frugal or fair: The unfulfilled promises of frugal innovation.

processes. York: Joseph Rowntree Foundation.

You might also like

Figure 19.3 A cross-section of a 400-year-old tree branch used in IKEA’s product