Frugal innovation—A key strategy for sustainable development

The world needs frugal innovations that are capable of successfully driving sustainable growth. Frugal innovations offer feasible solutions for improving social and environmental sustainability in resource-constrained conditions. Providing frugal solutions to global problems is vital in our resource-scarce world, where mindful resource usage is important. One of the drivers for such innovations is the frugal mindset.

In this article, I reflect on frugal innovation as a strategy embraced by organisations in emerging economies and its inherent connection to sustainable development.

Innovations driven by necessity

In the affluent economies, innovation is often seen as a luxury that wealthy users can afford. We have traditionally experienced innovation as a top down approach, where solutions are developed in affluent countries with significant investments. However, in the context of emerging economies, innovations are not necessarily high cost.

In my strategy classes, students from western countries often find it challenging to grasp the concept of frugal innovation. As an International Business (IB) lecturer, I find it important to encourage students to think of innovation beyond high-tech solutions. Innovation can also be seen as a bottom up approach, which is practical and mostly driven by necessity, where solutions emerge even in resource constrained environments. Therefore, it is crucial to discuss the concept of frugal innovation and highlight its connection to sustainability.

Frugal innovations are affordable and sustainable

Frugal innovation is the ability to do more with less by creating more business and social value while minimising the use of resources such as energy, capital and time (Radjou & Prabhu 2014).

In simple terms, frugal innovations are affordable products and services that address the needs of underserved populations, especially in emerging economies. The aim is to innovate affordable and sustainable solutions while maintaining high quality. Some impactful frugal innovations can be found in healthcare, education and energy sectors, where affordable solutions are made accessible to low-income populations.

For instance, frugal healthcare solutions like low-cost heart surgery (Abrar 2012) or low-cost prosthetic limbs (Abhipedia) make treatments accessible to poor customers at a fraction of the cost of conventional treatments. In the education sector, low-cost innovative learning tools allow children to learn basic literacy skills without expensive infrastructure (Sampark 2025).

Frugal innovation is an important strategy for low-income economies as these markets face unique challenges and therefore are unable to innovate by traditional means. Resource constraints, limited access to technology and unequal distribution of income are some factors that push the frugal innovators to think outside the box and innovate cost-effectively.

Frugal innovators understand the local context and create affordable solutions that are appropriate for the local environments. Frugal innovations have enabled access to essential services even to the poorest sections of society. For example, Vortex ATMs, easy to use ATMs, are designed in India to cater to challenges like unreliable power supply and higher illiteracy rates of end users. They work on solar power and have an inbuilt fingerprint identification feature that eliminates the need for personal identification number. (Khan & Melkas 2020.)

Frugal innovation is important for sustainability

The Sustainable Development Goals (SDGs) launched by the United Nations General Assembly in 2015 outlined the mainstream global development policies that are intended to be achieved by the year 2030. SDGs build on the success of Millennium Development Goals (MDGs) that ended in 2015. SDGs go beyond MDGs as they are more global in nature. SDGs were designed to be a blueprint to achieve a better and more sustainable future for everyone residing on this planet. The SDGs are an agenda to balance human prosperity with protecting the planet. These goals are action-oriented, concise, global in nature and universally applicable to all countries. The rich countries as well as the poor ones have to promote sustainable development together and this universal agenda is important to all nations. (United Nations 2015.)

The concept of frugal innovation, originally introduced to meet the needs of low-income markets is seen as necessary in affluent markets as well. Frugal innovation is more of a mindset than a particular type of innovation. This concept is gaining momentum as frugality should be the approach of every organisation regardless of whether it is operating in the developing or the developed world. Frugal innovation is becoming increasingly relevant in the affluent countries as slow growth, rising inequalities, environmental devastation, resource-scarcity and a variety of other societal problems like aging population exist in the affluent economies.

Companies from the developed world need to adopt frugal innovations even more as consumers’ perspectives have shifted. Consumer frugality is driven not only by resource constraints but also by changing values, such as a focus on mindfulness, durability, environmental sustainability and a desire for lower consumption.

Frugal innovation promotes SDGs by encouraging efficient use of resources and providing affordable solutions to low-income economies, and is seen as a practical step towards realising sustainable development. (See a previous publication of mine How frugal innovation promotes social sustainability.)

I encourage my students to explore how sustainable development is intertwined with sustainable business practices. Case studies demonstrating frugal innovation in action enable students to identify this connection. For example, low-cost healthcare solutions improve access to healthcare or solar powered lamps allow access to electricity in remote areas of the world. These examples clearly depict how frugal innovations are shaping the future of sustainable business models.

Exploring the notion of frugal innovation in the classroom

First of all, students should be introduced to the concept of frugal innovation and how it differentiates from traditional innovation. Next, they should be provided with the opportunity to explore the case studies for a practical understanding. Furthermore, they should understand the connection between frugal innovation and sustainable development.

As the topic is further explored, students should be encouraged to develop a frugal mindset as it is highly important for future business leaders to depict the interrelation between profitability and sustainability. Lastly, the students should be encouraged to design frugal innovations for the pressing global problems, which challenge the conventional notion of innovation. This encourages them to think outside the box and nurtures their ability to think critically.

Frugal innovation is a business strategy embraced in emerging economies and has the potential to challenge the traditional models of innovation. It is a process of solving wicked societal problems through resourcefulness and it allows underserved populations access to basic services. Frugal innovation is inherently connected to sustainable development and is seen as a tool for sustainable growth. Both students and educators should embrace frugal innovation and be encouraged to innovate through ingenuity and a frugal mindset.

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