In this knowledge file you can read about the Frugal Innovation and Responsible Innovations in Africa project. 
A research project that investigated new design and business model approaches for Dutch companies to improve water and health innovations in Africa, both from an economic and socio-ethical perspective. The project team investigated a new integrative framework including ethical and social elements in the product development cycle, and inclusive business models. The usefulness of the framework is demonstrated by action-learning trajectories of five case studies in Kenya and Uganda.

This project has been made possible in a consortium with African entrepreneurs and three Dutch companies in the Water and Health Top Sectors: Royal Philips and the water companies OASEN and Hatenboer. The project received funding from the three dutch companies and the Responsible Innovation program of the Netherlands Organisation for Scientific Research (NWO). 

Keywords: Africa, frugal innovation, water innovation, health innovation, health innovation, bottom of the pyramid, entrepreneurship, business model, impact assessment, pove

Project Description

New design and business model approaches will enable Dutch companies to develop successful frugal water and health innovations in Africa, both from an economic and a socio-ethical perspective.

By collaborating with local entrepreneurs in Africa Dutch companies can develop frugal innovations – simple, affordable and functional versions of existing products – in a profitable manner. Frugal water and health innovations in Africa may potentially combine value capture and societal value creation, therewith creating benefits for both innovators and local users. Output of this project will be a model that includes local, context-specific socio-ethical values in the product development process and new business models which will inform future frugal innovations. The innovations developed in the future may also have potential for European markets.

What is Frugal Innovation?

Frugal innovation is a product development and production strategy that brings relatively sophisticated products, services and systems in a responsible way within the reach of the billions of poorer and emerging new middle class consumers at the Middle and Bottom of the Income Pyramid.

Due to extreme price sensitivity of the large numbers of consumers in the lower-income groups in the global south the turnover can only increase by redesigning products and services in such a way that the end-result matches the demand for affordability and other context-specific product traits.

Frugal Innovations are innovations for resource constrained environments that can be placed on the junction of affordability and ‘good enough quality’, while still having basic functionality. This necessitates the explicit
inclusion of local ethical and social values in the design and production. Co-designing and co-producing with local entrepreneurs is very important. 

Opportunities

A problem for innovation in developing countries is that good, reliable infrastructures for electricity, water, communication and transportation are often lacking. Frugal innovations provide opportunities to skip (leapfrogging) the phase of investing in the ‘heavier’ infrastructures in the developed world.

By for example using the latest communication technology more decentralised, potentially cheaper and more efficient systems are possible which also have potential in European markets.

The challenge is not simply to provide stripped down versions of Western products to poorer consumers, but instead to provide locally better fitting, cheaper alternatives without sacrificing user value. One of the elements to make frugal innovation a success is to make it inclusive, so that it fits into the local, resource constrained environment in developing countries.