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Innovation for SMEs as a solution for the new economy

By Javier Campos

Frugal innovation refers to the innovation of products and services with restricted resources, in contexts of certain urgency at low prices. It could be a solution to problems of SMEs.

I recently had the fortune to spend little more than a month in the far-away lands of India, this time gave me the opportunity to discover a little more about the complex and fascinating culture of that country. During a meeting in Bombay, I found myself discussing with a group of friends about our experiences in innovation issues and how it develops in our respective countries.

On the one hand, I insisted that in order to be effective, Innovation must be fast, simple and adjustable. On the other hand, there were those who, from a more academic point of view, brought to the discussion the international definitions of Innovation and the sophistication of structured processes. After arguing for a long time, one of them finally asked me the question: Do you mean Jugaad?

The Definition

In 2012, relatively recently, the term “Frugal Innovation” appeared in a book titled Frugal innovation how to do more with less, written by two Indian authors Navi Radjou and Jaideep Prabhu.

It draws attention especially in critical moments such as the one we live in where we will hardly find a day in which there is not something to stir up the fragile economy, which has also been made clear in various international forums that something has to change.

After the World Economic Forum and the evident figures of economic slowdown, as well as the constant concern for the environment that the last centuries of industrial development have charged us with, is it possible that this term has the opportunity to put itself at the head of the possibilities that does the human being have to generate what he is used to doing, which is to innovate, with the mediation of the needs of the present?

Frugal innovation refers to an innovation of products and services with restricted resources, in contexts of certain urgency at low prices. The term comes from the Hindi word Jugaad, which roughly means “improvised or innovative solution” and implies fixing or creating new products with the least use of raw materials possible.

The aforementioned text and the concept have always gone hand in hand with the insertion into the economy of the segments of low purchasing power within which are mostly those that inhabit emerging economies, however, given the conditions of the current economy, This activity has also spread to developed countries with healthier economies and is growing exponentially.

These innovations generate better business and social value than traditional innovations mainly because they include four main characteristics: affordability, good performance, sustainability and utility.

Although the starting point has been the incipient need of the poorest segments of society, there are two characteristics that perhaps we are not taking into account and that could be a new and powerful starting point for this type of innovation, and this is the immediacy in the demand for solutions and the ecological emergency.

And it is that among the most interesting characteristics of this type of innovation is the low cost and the use or reuse of local materials and what it implies the generation of income, improvements in infrastructure and distribution, as well as reduction of complex laboratories to stay with basic engineering skills.

According to some analysts on the subject, there are three ways to give birth to frugal innovation projects, which are: combining materials, processes and existing resources, which by itself also reduces time, materials and human resources.

We have already addressed the importance and implications of finding opportunities in needs. These ideas may sound empty when we do not have specific examples and we would not even know where to start in terms of projects and even more so when it comes to affordability not only of the resulting product but of the innovation itself, but let’s put in context and look closely.

Solution in Emerging Countries

How many problems do we have in a place like this, in a country like India, Mexico or anywhere in the world on a daily basis? We could ask ourselves, what we have at hand and how much we could solve them through innovation, but the “frugal innovation” that allows us to lower our costs and use our mind as the only available resource in a world that no longer has natural resources at large. scale and that at the same time has taken technology to unthinkable and almost fictitious models.

Given that frugal innovation has been around for a long time as a solution in emerging countries, now we take a look at it again, as well as the state of our environment, which is increasingly fragile and whose characterization for the coming decades will be “in a state of emergency” , we could give this concept a twist and renewal to rethink the possibilities of frugal ecological innovation that at once addresses two fronts: changes in the economy, the state of our natural resources.

Related: This is the New Way of Understanding Work

Perhaps the grandmother’s oil can be made with a green bottle and of a warm beauty, with a recycled cap from someone else that stopped serving a long time ago, is not only nostalgically beautiful, but it is also a propositional creation of ecological frugal engineering that has also served at home for so many years that we have not been able to turn to see its beauty and its usefulness.

Disruption and innovation are not always a spark of almost divine illumination; They can also resemble a moment of decision in which we choose to rebuild what is and has always been there, by engineering our practical solutions in merely everyday environments. Isn’t that innovation, in its purest and easiest way to understand it?

First Person Example

When we at the Wadhwani Foundation realized that the backbone of economies around the world: small and medium-sized businesses had no consistent support to understand the problem areas that prevented them from growing, no access to expert consulting, and much less long-term follow-up, we decided to create our Advantage initiative to accelerate the growth of SMEs and began the design from our vision of the end goal, analysed the available resources and launched ourselves with the execution without thinking too much about the process.

Expert consulting has existed for dozens of years, there are SMEs all over the world that require help and service providers, clients and sources of capital have always been there, so there was a lack of a tool to detect growth areas, to connect the dots. correctly without friction and we developed the product that was launched on the market and as of today, 12 months later, the improved version of Advantage is a reality that has impacted thousands of companies in India, Mexico and Brazil, already creating more than a thousand direct jobs and tens of thousands indirect.

At Wadhwani Foundation we have the mission of creating the millions of jobs that the world needs and from our initiatives we work to be the catalyst that allows entrepreneurship, innovation and skills of the 21st century to be the growth engines of Mexico and the world.

If you are a student interested in entrepreneurship, an entrepreneur who wants to grow in sales or an expert in a strategic issue and you are interested in knowing how to undertake or grow exponentially, write to me at and let’s explore which of our programs and initiatives can help you or visit to learn about our mission.

Javier Campos is Vice President, Latin America at Wadhwani Foundation

Source: Entrepreneur

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