How frugal is frugal innovation?
Frugal innovation is not frugal by choice, but by the lack of it.
How does any individual, anywhere, innovate to overcome a personal problem? He tinkers with what he has lying around, salvages from the junk yard and develops an optimal solution, constantly balancing cost and functionality.
But when he has to sell the same to others, his outlook changes. And his focus on frugality gradually vanishes.
What was once his personal, beautiful baby will now be impersonally and critically judged by paying customers. That rusty bolt and nut will have to be replaced with new ones. He will have to use new steel sheets instead of the rusty piece cut out from the car door. Edges will have to be beaded. Painting with a brush will have to be replaced with rust proofing, surface preparation and powder coating. He will need decals. The hand beaten metal cone has to be deep drawn. That open mechanism he had covered with a shoe box now has to be covered with a moulded plastic cover. Those rubber components he cut from a tyre have to be moulded. Plastic ties replaced with metal worm clamps. Since his customers may not be tech savvy, he needs to modify the design, make it user friendly and incorporate safety features and consider maintenance / spare parts issues. He also needs to pack, crate and insure his machine for transportation.
And all these if he has to sell even five units. If he gets orders for 50 units, then he has to contend with issues like a dedicated manufacturing setup, labor, accounting, regulatory compliance, CNC machines, water jet cutters, MIG, TIG and robotic welders etc while planning for a 500 unit order. Complexities and cost increase with more orders, more expectations, more responsibility and reputation.
Then comes competition. This leads to patent and copyright protection, forces mass production techniques to reduce unit costs, advertising, R&D to develop newer models and thus is born the evil, profit driven corporation. ‘He’ and ‘frugal innovation’ are dead and gone.
This is true of all frugal innovations and all big corporations. Apple, GE, IBM, Ford are a few that comes to mind. And hence condemning big companies while leading and encouraging frugal innovators up the same path is misleading, devious, myopic and mischievous.
Take the real world example of 2 guys in India who ‘invented’ a windmill water pump. No, no, not in the 17th century but in 2011, and I, for the life of me, cannot fathom what the invention is all about. One report says these frugal innovators used bamboo to build the tower and tin sheets to fabricate the vanes and cost $120. Any DIY guy will also vouch that this could not have cost more than a couple of thousand rupees.
Then came along the National Innovation Foundation, an organization dedicated to discovering and encouraging ‘frugal, grass root innovation’ in India and propogating it globally. NIF ‘helped’ these farmer turned innovators to patent, improve design, find manufacturers, market etc this Indian invention.
After this intervention, this frugal innovation is made of mild steel tubular towers and blades made of ‘light weight material’.
This, now not so frugal an innovation costs rupees 80,000 + transportation + taxes.
Thanks NIF for helping these frugal innovators defeat the very concept of frugal innovation and thanks too for inadvertently proving to the world the reality of frugal innovation and how your or any modern principles, processes, technology or business practises, the very concepts you deviously preach to the developed world to shun, avoid and discard, transforms a frugal innovation into a full fledged modern business.
But the bigger question which proponents of frugal innovation have to answer is how does one define frugal innovation? In the case of the wind mill, is the very first working prototype, costing around 6000 rupees, with all it’s shortcomings, frugal, or the improved version costing 80,000, frugal?
If the increase in cost can be justified as for better material, design, reliability etc, then who decides how much improvement, in what sector is enough?
The balance between all these factors is finally decided by the consumer. And this is what any business is all about. Demand and supply. If there is a demand for an unreliable, ugly, inefficient product, it will be met. But then these very same academicians will decry this effort with words like quality, reliability, serviceability, efficiency, aesthetics etc.
So it would be safe to conclude that “frugal innovation” is a misnomer, a phrase coined solely for the purpose of academic debate.
But if these guys truly believe their own lies, then they are fools to not realize that they are sitting on an untapped market with billions. Let them frugal innovate, say a car, and prove their theory. Oh wait. The Tata’s tried that with the Nano and failed.