Frugal innovations are newly designed technological products, services and systems that are of good quality and are affordable to low-income people in developing countries. They are basic but also adapted to the local circumstances and culture. Through re-engineering, these innovations become an important instrument to address over-engineering. The VTI department develops new inclusive business models for successful frugal innovation in Africa.
Frugal innovations help to solve the problems of low-income customers in resource-constrained economies by designing technological products and systems in an inclusive way without over-engineering. This requires a scientifically sound framework for new inclusive business models through which high-technology EU firms can collaborate with local entrepreneurs in developing countries. Involving local entrepreneurs from the beginning of the product development cycle is crucial. Their knowledge of local distribution chains, and of local buyers’ ethical and social values, makes them a key source of knowledge in the design or redesign process. The new inclusive business models that VTI develops, help to obviate the need for costly modifications afterwards or the risk of society rejecting new technology.
Through reversed engineering – designing or redesigning innovations for developing countries – frugal innovations can be adapted to match the preferences of low-income customers in the EU. Frugal innovations can therefore also contribute to solving the problems of a growing unequal income distribution and a lack of social cohesion within EU countries.
Frugal innovations are an important future form of innovation management. There is clear interest on the part of private firms, particularly regarding how to manage the design, development and production of frugal innovation in a non-western context. This calls for completely new inclusive business models in which design or redesign makes the innovations fit perfectly the preferences of low-income groups in non-western cultures. When successful, huge numbers of customers can be reached and a local economic impact can be created due to increased entrepreneurship.
VTI is involved in an NWO/MVI project together with private firms such as Philips, OASEN and Hatenboer. Philips has set up a Community Life Centre in Kenya. VTI carries out research into the local economic impact of the centre and is currently developing an inclusive business model. Research in innovative business models is also carried out, as an example, for a frugal thermometer prototype that has been tested in Kenya and Uganda, and for Dutch Water Limited, an initiative that provides purified water in Kenya. Another project is TAHMO, in which a frugal weather station suitable for developing countries needs an inclusive business model.
VTI collaborates with the Delft Global Initiative in contract research on the performance criteria of innovation hubs in Africa.
‘My aim is to build a concise and rigid framework in which inclusive business models generate profits and address local economic impact at the same time, aimed at making frugal innovations inclusive and hence addressing social problems in a business friendly way.’
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Who is involved?
TU Delft researchers: Cees van Beers, Laurens Rook, Victor Scholten, Nick van de Giesen (CiTG), Jan Carel Diehl (IO). Haye Hazeberg, Rachel Howell, Elsie Osongo (EUR/TU Delft), Kinsuk Mani Sinha (EUR/TU Delft).
How is the project funded?
TU Delft, Leiden University, Erasmus University Rotterdam, NWO and private firms: Philips (electronic health equipment), Hatenboer (water purification), OASEN (water company).