By Andy Yen

American companies and universities, endowed with large R&D budgets, have traditionally invested a lot of money and resources into specialized units and centers or expensive initiatives, such as “Six Sigma,” in their quest for innovation. But according to a panel of experts convened by ASNC on May 23, a new approach to innovation called jugaad—meaning “innovative fix” in Hindi—and which is already prevalent in emerging economies such as India, is gaining traction in the U.S. and other Western economies. Reena Jana, the Executive Editor at frog design, moderated the panel.

Jugaad emphasizes a more flexible and open approach to innovation, one that does not require a large amount of resources.  Simone Ahuja and Navi Radjou, two leading international business consultants, have outlined the principles of jugaad in their new book, Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth.  In writing their book, the authors studied innovation in emerging markets across the world as well as in the West.

 “We talked to hundreds of CEOs and entrepreneurs from all over,” said Ahuja, who also founded Blood Orange, a strategy consulting firm based in Minneapolis whose clients include Honeywell and The Economist. “What we found is that they typically innovate by asking what if questions. There’s a difference between what if questions in developed nations and developing nations.  In developed nations what if questions are more on the incremental side.  In developing nations those what if questions are much more fundamental.”

To illustrate the power of jugaad, Radjou and Ahuja spoke about an entrepreneur they met in rural India who did not have an R&D lab, little access to capital, and very limited resources who was nonetheless able to design a refrigerator that did not use any electricity.  “This entrepreneur,” noted Ahuja, “identified a basic need in his community, and with a high school education, he was able to develop a solution driven by fundamental constraints.” Innovation, she added, has become more “democratized.”

“There is no direct correlation between how much a company spends on R&D and how innovative it is,” according to Sean Randolph, President of the Bay Area Council’s Economic Institute, citing an important finding from a joint-survey conducted by the Institute and consulting firm Booz & Co. in March 2012 looking at innovation in the San Francisco Bay Area.

Peter Weng, Director for Search Quality Evaluation at Google, provided insights for how companies could better align their corporate strategies with jugaad-like innovation strategies.  “Google started in a garage.  Engineers are given 20% time that’s just theirs.  20% of their working time is just for whatever they want to work on.  Many successful ideas have come from that.” Nadjou added that it was actually 3M that pioneered this practice in the 1950s, and one of creations was the Post-It note.

Innovation should also be more about collaboration, added John Snydal, Principal Director at frog design. “You try a lot of things, or create a new research method.  If it works well, people start to get behind it” 

But is jugaad just a fad?  Radjou argued it is not, noting that “interestingly jugaad sounds exotic as a term, but it is something that we think has been present and practiced in this country for many centuries.“

The event was hosted by K&L Gates in San Francisco.