Capturing and Assessing the Sustainability of Frugal Innovations

Maria Alejandra Pineda-Escobar^{1, 2*}

¹ International Institute of Social Studies - ISS, The Hague, The Netherlands; ² Faculty of Business, Management and Sustainability Politecnico Grancolombiano, Bogota, Colombia

* [email protected]; [email protected]

Abstract

It has been proposed that frugal innovation can contribute to the attainment of sustainability in resource-scarce contexts. However, not all frugal innovations are necessarily sustainable by definition, and little is currently known about the frugality-sustainability link. This short paper is part of a research project that reveals the scarcity of evidence-based claims on the sustainability potentials and pitfalls of frugal innovation and emphasizes the need to count with better ways in which these can be captured and assessed.

Keywords 

Frugal Innovation, assessment, sustainability, outcomes, measuring tools 

Introduction

Environmentally benign and socially inclusive innovations are seen as pivotal for the achievement of sustainable development. Frugal innovation (FI), a topic that has gained increased attention among academics, practitioners and policy makers, has been proposed as one of these types of innovations arguing that it can contribute to the attainment of sustainability in poverty contexts in resource scarce environments. However, not all FIs are necessarily sustainable by definition, and little is currently known about the ways in which FI can be considered sustainable.

FI is a type of innovation that aims to (re-) design products, services, systems, and business models, providing affordable solutions with reduced complexity, a focus on core functionalities and minimal use of resources, mainly targeted at low-income consumers (Rao, 2013; Rosca, Arnold and Bendul, 2017; Leliveld and Knorringa, 2018). Given these features it has been recurrently proposed as a means for responding to social and environmental challenges of lower income communities. Extant FI literature has so far given greater attention to definitional issues, with mostly conceptual papers and case studies that focus on how to define, design and implement FIs. Such studies have been found to raise expectations about potential outcomes and impacts of FI, but these are not yet actually estimated or measured following harmonized indicators and tools. This is particularly true when it comes to claims on the potential contributions of FI for sustainability, where a major gap in empirical evidence remains (De Marchi et al., 2022).

Secondly, some authors mention the significant role played by local micro/small-medium enterprises in FI and suggest that FI is opening a door for developing country entrepreneurship and is fostering the creation of sustainable and social enterprises in the Global South (Basu et al., 2013). However, the role played by these local social entrepreneurs (SE) in FI has not been systematically studied. This includes, studying them in relation to the sustainability of their FIs.

Responding to this limitation in present literature, the wider research project that this short paper is a part of, focuses on the study of FI by local SE in Colombia. I aim to get the discussion going around what needs to be assessed and measured in the sustainability of FI and how best it can be done, using a group of Colombian SEs as object of analysis. I will present an initial proposal for capturing and assessing the sustainability of FIs, taking into consideration the distinctive characteristics of FI as a new and alternative innovation discourse.

Frugal Innovation and Sustainability

Given the accessibility, availability, affordability and resourcefulness of FI, many authors allude to social, economic, and environmental outcomes and impacts of FI. It is commonly argued that FI can be a solution for responding to the sustainability challenges of lower income communities (Levänen et al., 2016). Authors affirm that FI “can be a firm driver of progress in achieving sustainable solutions” (Basu et al., 2013) and, if scaled, can “contribute to a more sustainable world by aiding the efforts to end global poverty, world hunger, and social injustice, and to protecting the capacity of the planet to support our own and other species.” (Ibid. 66). Wohlfart et al., (2016) go over to affirm that FI can represent a “strong impetus for sustainability” that is yet to be leveraged to its full extent. These statements, though, are mostly given on the bases of a normative discourse that sees sustainability benefits as a causal consequence of how FI is defined, considering FI as inherently contributing to achieving sustainable development.

With a critical lens, some authors have brought into question the unidirectional positive impact of FI on sustainability and have raised concerns about negative side effects that ought to be considered in this relation, such as increased pollution due to greater waste generation (Weyrauch and Herstatt, 2016; Rosca, Arnold and Bendul, 2017). In addition, some authors affirm that the sustainable development claim has been exploited by several organizations to use it as a way of profiting from low-income consumers (Hossain, 2018).

But the underlying question is that the existence of a frugality – sustainability link can’t be claimed only on the basis of theoretical considerations. As innovations are not by definition the product of sustainable processes leading to sustainable outcomes, the existing connection between FI and sustainability shall be a question subject to empirical research. In fact, the literature exploring the links between sustainability and FI is starting to exhibit a shift towards more empirically grounded contributions, as a response to the multiple calls that had arisen in the literature in this respect (Knorringa et al., 2016; Levänen and Lindeman, 2016; Rosca, Arnold and Bendul, 2017; Rosca, Reedy and Bendul, 2018; Albert, 2019; Hossain, 2021).

Based on their work exploring business models for sustainable innovation, with a focus on frugal and reverse innovation, Rosca together with Arnold and Bendul (2017) had appear as the one opposing stance, making a strong call in favour of the separation of FI from sustainability discussions. Interestingly, however, only a year later Rosca, Reedy and Bedul (2018) engaged in a systematic review of the literature to explore the approaches and conditions under which frugal innovations can enable sustainable development. This interest in linking sustainability and FI discussion by hitherto strong opponents allows arguing that even the former contestants have now come to agree that a rigorous exploration of the links between sustainability and FI is a relevant and necessary line of research that needs to be promptly addressed by interested scholars.

By taking a particular SE focus, my work also responds to the research gap identified by Rosca et al. (2018) in their literature review on FI and sustainability. The authors affirm that “[o]ften studies do not adopt a clear perspective or differentiate between private sector actors when proposing theoretical claims on the impact of frugal innovation for sustainable development. In this sense, it is important to differentiate between private sector actors and further advance our understanding on the motivations and contributions of each group” (p150).

Methods

This short paper is part of a wider research project that aims at exploring the linkages between FI and sustainability, using SE in Colombia as the object of analysis. Colombia has been recognized as a country where entrepreneurship, sustainability and social innovation issues are having a rapid increase, with significant attention and funds being devoted to these areas by local and international actors alike (Inter-American Development Bank, 2016). In addition, as of July 2022, it has become the first Latin American country with a law for the promotion of SE.

I am implementing a stepwise methodology to identify SE in Colombia, using the RECON organization as the main database. RECON is a non-profit organization active in Colombia since 2016 and has become a central point of reference with respect to social entrepreneurship in the country, which makes it a relevant dataset to fulfil the purpose of this research. For the screening and identification of cases I am first using innovation as the eligibility criteria for inclusion/exclusion, and secondly checking for the existence of FI within that SE sample. I am following the general definition of innovation given in the fourth edition of the Oslo Manual (2018). For data collection I will conduct fieldwork with the selected SE, implementing semi-structured in-depth interviews with the entrepreneurs and other relevant informants from within their stakeholders. I will triangulate the sources of data by combining primary field data with the analysis of SE reports, SE websites, popular press, and other types of grey literature, enhancing construct and internal validity.

As an outcome of the wider research project, I will propose a framework for FI sustainability assessment and measurement and will use these field data from Colombian SE to test the implementation of the proposed framework.

Expected Results

Building upon the existing knowledge from other types of alternative innovations, such as social and open innovation, I will approach the proposal for assessing the sustainability of FI with the incorporation of qualitative dimensions that can elucidate the soft and intangible components behind the sustainability of FI.

For this purpose, I will take into consideration that FI is highly context-specific and it is frequently pursued with a hybrid economic and social/environmental goal. Another distinctive characteristic of FI is that it seldom occurs by the actions of a single actor. On the contrary, it is characterized by the occurrence of diverse ways of partnerships and collaborations, to develop, implement and diffuse frugal innovations. Thus, it is important to consider that variety of actors and their interrelations when assessing its sustainability performance.

Taking the Sustainable Development Goals (SDG) as a reference point, I will present an initial proposal for the construction of a framework for assessing the sustainability of FI, considering the distinguishing features of FI and pointing out which type of data would be required.

Preliminary Conclusions

This research will contribute to uncover the scarcity of evidence-based claims on the sustainability potentials and pitfalls of FI and will emphasize the need to count with better ways in which these can be estimated and assessed. As an output of the wider research project I will present an initial framework proposal which looks beyond conventional indicators and measurement tools and considers the distinguishing features of FI.

References 

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Basu, R.R., Banerjee, P.M. and Sweeny, E.G. (2013) ‘Frugal Innovation Core Competencies To Address Global Sustainability Introduction: A Call For Global Sustainability’, Journal of Management for Global Sustainability, 2, pp. 63–82.

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OECD/Eurostat (2018), Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data on Innovation, 4th Edition, The Measurement of Scientific, Technological and Innovation Activities, OECD Publishing, Paris/Eurostat, Luxembourg, https://doi.org/10.1787/9789264304604-en.

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