Worldwide Locations

Worldwide Locations

Learning from the Frugal Mindset

Simone Ahuja at Asia Society New York on Jan. 28, 2010.

Simone Ahuja at Asia Society New York on Jan. 28, 2010.

Do you think these innovations would be easily accepted outside? Or would developed nations be hesitant in accepting innovations from emerging ones?

The ability of the West to accept ideas from emerging markets is a mixed bag. Everybody doesn't have—to use the Zen metaphor—the empty-cup philosophy. And having said that, in the scenario of the clay fridge, we actually presented this at the University of Cambridge a few months ago and there was a journalist there from the Economist who wrote about it and the inventor of the clay fridge was ultimately contacted by two major appliance makers in the West. So we'll have to see how it works. The people who are forward-thinking and the people who really understand this—that blending is what is going to drive innovation globally—those people are open.

You mentioned the benefits of the jugaad, but are there problems that you can foresee with the jugaad? Or does the end justify the means? Have there been much opposition against it?

I surveyed hundreds of people across India about the word jugaad and what it means to them. And what I got was a pretty varied response. It depends on the region and the variety of other factors. But why we included jugaad in our TV series, Indique, a guide [on] emerging India, is because I learnt about jugaad. I learnt to practise it in a way, as I had been working in India over the last several years. And cutting corners to me, if you look at the definition to me is just finding an easier or a cheaper solution to get to a same or similar result. I don't see what's wrong with that. To me, that sounds like frugal innovation. What I would say to folks who have trouble with the word is, let's focus on jugaad potentially as a concept. My colleagues and I conceptualized jugaad to mean "creative improvisation in a framework of deeper knowledge." So if we look at it that way and stop focusing what exactly does it mean to everyone. Meaning of words change, shifts over time, and improves. For some people it might just make them feel more comfortable to say fine, we're re-contextualizing jugaad.

But the core of jugaad, according to me, is still brilliant. I love it. I have learnt, to an extent, that mindset.

There's definitely been some pushback but I think it's because people have been focused on the exact meaning of the word in its original context. That's okay. All I'm saying is, let's give it a new context, let's take the elements of jugaad that are really valuable and let's talk about the real mindset, the innovation mindset; whether it's called jugaad or something else; whether it's a fad or not, time will tell.

But the mindset of people in India and many emerging markets, and to a lesser extent, the US—but then we just aren't faced with extreme resource constraints—that innovation mindset is something form which we can all learn. And that's why frugal innovation is so hot today because we have to do more with less for more. So we have to deliver more value for less cost to more people. And that's what jugaad is. That is what frugal innovation is.

Can you give an example of what have been the challenges encountered and barriers faced by these entrepreneurs?

SELCO provides solar light, clean energy. Theirs is a really unique model. It is about the end customer insight and the eco-system. Most vendors can't afford to pay and prefer to pay on a day-to-day basis, which is the best lesson Harish learned from a street vendor. Harish employed the community and used micro entrepreneurs. He rented out to individual vendors. That's how you engage the eco-system. And the eco-system has been pretty effective. SELCO, for example, provides light but there are other elements, such as their unique repair model. If the light is broken, SELCO promises to repair it within 24 hours. Now, that's impressive in an urban area but in a rural area, that's amazing. I've visited customers of SELCO and some are them are in places so remote. So when you're asking about the challenges; for SELCO it is how do you deliver this kind of service? I think that remains a challenge for them.

Have the public accepted these innovations with open arms?

It's very end-customer insight driven. When we talked to the vendors who are using these solar lights (by SELCO) for example, they talk about how they had purchased the solar light, paid it off, and for the last two years have been getting free light. So for those people it's very broadly accepted. It's also made so affordable that it's competitive with electricity, for example. It's modular. So it might be available in an area where it's not already. Here in the US, a lot of sustainable practices are not affordable. Solar, even with a lot of the incentives that are provided, is still very expensive. So what he did was he took it to a level where it's not only desirable, it's almost the only option.

Next: "There are really valuable lessons these people have to teach us."