Seema Singh at Forbes writes about innovations that enable Profit from Scarcity, touting the benefits of Jugaad and Frugal Innovation. Writing about the newly released Jugaad Innovation by authors Navi Radjou, Simone Ahuja and Jaideep Prabhu, Singh talks about their view of innovation from the bottom-up as opposed to the more traditional top-down approach of long-standing institutions and multinational corporations: “As the era of scarcity, of economic and natural resources, is upon us, the old structured way of innovation needs to be propped up by a new flexible, frugal model.” She goes on to write,
Tata Nano, according to the authors, exemplifies these principles. Yes, despite the cases of flaming cars and tepid sales. “Applying these principles at scale is not easy and that’s why Nano is a good example. Today, Tata Motors is saying that Nano 1.0 was not very successful, but we can apply the learning to Nano 2.0,” says Prabhu. As an academic at Judge Business School at Cambridge University, UK, he has watched structured innovation systems fail to respond to volatility caused by globalisation; how it misses out on the ingenuity that lies in the rest of the organisation, and even outside of it.
The authors believe these principles are, and will be, followed by two categories of companies: Multinationals like GE, 3M, Philips, GM, etc which are in India and are innovating here, not in terms of ‘reverse innovation’ but acquiring the mindset of frugality and flexibility and taking it back to their global centres.
Then there are Indian companies which are going global and can take these best practices to other locations. They are applying them in the local context. That is, communicate the philosophy of Jugaad and let the local managers implement them. By not ‘scaling’ them, they are avoiding the mistakes that multinationals made in going global, says Radjou. The next battleground, according to him, is going to be among MNCs who’ll have to unlearn some of the top-down mechanisms and try to espouse this new bottom-up approach. Indian companies in this regard have a clean slate as they don’t have to unlearn anything, he believes.
While ingenuity and an accordance to frugality are certainly valuable to innovation, especially in today’s context, it remains incomplete and lacking as a complete innovation process and methodology. Cost efficiency can be valuable, but is by no means the most important part of innovation, and does not necessarily bring about the kind of change that is desired or necessary. Simply making thing cheaper doesn’t solve a lot of the problems we face a society, and the Tata Nano is an excellent case in point. Indian cities do not need more cars to add to the pollution and congestion – rather, we need more and better systems of public transport that will serve even those citizens who cannot afford a cheap car or any other form of personal transport.
Besides this, while I agree with Radjou that a lot of the MNCs need to unlearn their old mechanisms of functioning, it seems unfounded and just plain illogical to say that Indian companies have nothing to unlearn, as there are some long-standing, highly entrenched barriers to innovation in Indian companies, most specifically in the resident hierarchies that dominate most Indian firms. Jugaad may be valuable in some ways, and could help in terms of reorienting people towards a more user-centered and crowd-sourced approach to problem solving, but it seems overly simplistic to see it as the solution to the kinds of grand challenges that the world is currently facing from various different spheres: ecological, economic and social. We need to think of innovations that can truly make an impact. Some of these may lie in bringing cheaper versions of existing technologies to more people, but there are many problems that require an entirely new approach, a complete reorientation of the way we view the world, and go far beyond the mere reduction of cost.