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Frugal Innovation in Emerging Markets
Journal
Research Technology Management
ISSN
0895-6308
ISSN-Digital
1930-0166
Type
journal article
Date Issued
2011-07
Author(s)
Abstract
The quality and number of innovations developed by multinational companies from emerging countries is increasing dramatically. In particular, frugal innovations - "good-enough," affordable products that meet the needs of resource-constrained consumers - have created tremendous demand in emerging markets. While the development of such products has largely been the domain of local corporations in emerging countries, Western corporations have recently started to engage in frugal innovation as well. This is a diffi cult task for Western firms, however, because their business models and organizational structures are traditionally designed for the development of advanced products for the affl uent few at the top of the economic pyramid. Using Swiss weighing-instrument manufacturer Mettler Toledo as a case example, this article suggests that frugal innovations are largely developed by local R&D subsidiaries of Western fi rms in emerging countries. A substantial degree of autonomy for those local R&D subsidiaries, including product-portfolio responsibilities, can facilitate the development of frugal innovation.
Language
English
Keywords
frugal innovation
emerging markets
HSG Classification
contribution to practical use / society
HSG Profile Area
SoM - Business Innovation
Refereed
Yes
Publisher
Industrial Research Institute
Publisher place
Washington DC
Volume
54
Number
4
Start page
38
End page
45
Pages
8
Subject(s)
Division(s)
Eprints ID
211637