The Indians call it “jugaad”. “It’s the art of overcoming harsh restrains by producing a good enough solution with limited resources,” says Jaideep Prabhu, professor of Marketing and the Jawaharial Nehru Professor of Indian Business at Judge Business School, Cambridge University.
Addressing the OpenLab opening event this afternoon, Prabhu explained how working with limited means can spur faster, more flexible and better innovation.
Jugaad plays a vital role in the global economy, making it possible for people with low income to take advantage of products middle class Europeans take for granted, such as refrigerators and mobile phones, he says. While many Indians have benefitted greatly from economic growth on the subcontinent, many more simply aspire to improve their lives. Prabhu says that this segment of society “offers a very large, untapped market opportunity” for big companies. But the problem is to compress the production costs of products to make them affordable.
That’s where jugaad innovation comes in. As an example, he points to an electrocardiogram that was designed by students using off-the-shelf components, at a fraction of the cost of a typical ECG. Another innovation was a hand-sanitizing device that can be clipped to a medical worker’s scrubs. It cost only 3 dollars.
It’s not just products either. Using simple, existing technology, mobile operators in Africa and other parts of the developing world have become providers of financial services by enabling people to transfer money and pay for goods via mobile phone.
Big companies are finding that frugal innovation is the only way they’ll be able to compete with smaller companies with little resources, he says. “They have been getting out-competed by companies that didn’t have resources.”
But you don’t have to live in India to understand how to take on jugaad innovation. “You have problems in your own backyard,” he told the audience in Stockholm. “So you have to engage with people, you have to engage with consumers in those areas,” he says.
“Frugal, flexible innovation is crucial for our world.”