State-Bank-of-India: Frugal Innovation

Ever since 1970, every day we consume more resources of the earth than it can produce. So much so, that in 2019, we had consumed the entire year's resource by July 29th, the earth overshoot day of that year. But there is a disparity here. There are some countries that consume their resources in just two to three months. These are mostly among the developed nations, overspending the resources, while there are other populations in the underdeveloped world, mostly in Asia, Africa and Latin America who are not able to meet their needs. The recent developments in the world including the pandemic crisis have once again drawn our notice to the grievous exploitation of natural resources by human beings and its fatal consequences.

Frugal innovation (FI), defined as "doing more with less for more (people)" (Prabhu, 2017), offers a solution to both these problems. Since frugal innovations include substantial cost reduction, concentrate on core functionalities, and optimized performance levels" (Weyrauch & Herstatt, 2017, p. 12), they reduce resource consumption and make the products available at a lower cost. Thus they serve the population at the bottom of the pyramid and also serve environmental purposes. Frugal innovations are necessary for the future of this world and for serving societal purposes. Large corporates today are turning to such innovations due to these reasons and also because it gives them a cost advantage and a much bigger market to serve.