Patterns of Frugal Innovation in Healthcare

The philosophy behind the development of frugal innovation has been described as “instead of adding more bells and whistles, they strip their products down to their bare essentials” (The Economist, 2010). Various researchers have since tried to define frugal innovation and differentiate the term from similar terms such as low-cost innovation, good-enough innovation, jugaad innovation, frugal engineering, constraintbased innovation, Gandhian innovation, or reverse innovation (e.g., Bhatti and Ventresca, 2013; Brem & Wolfram, 2014; Ostraszewska & Tylec, 2015; Zeschky et al., 2014). Weyrauch and Herstatt (2016) have analyzed various definitions and recommend that an innovation should be considered as frugal if it meets the following relevant criteria: a substantial reduction of cost, the concentration on core functionalities, and optimized performance levels. Frugal innovations have been adopted in a wide range of industries including automotive, energy, information and communication technology, and healthcare. One of the most prominent products is certainly the TATA Nano, introduced in 2009 as the world’s cheapest family car created for the needs of Indian and Chinese families at a remarkable cost of only $2000 USD (Prahalad, 2012). Other examples of frugal innovation in other sectors include the Mitticool refrigerator, a natural refrigerator made entirely from clay, and GE Healthcare’s high-efficiency Lullaby baby warmer for neonatal care. In each case, the frugal innovations in these examples were developed for the needs of emerging economies.