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Frugal Innovation

Posted: 2nd September 2016 at 7:58 am   /   by   /   comments (0)

Article by: John Forrester, Ancitel Spa Napoli

In recent years with reduced budget and austerity programs local governments have been encouraged to do more with less. Although demand is increasing for public sector services, resources are steadily decreasing. Local governments are being pressed to deliver focused, efficient services with ever diminishing resources.

One report recently issued on frugal innovation for the European commission contains some possible responses even in the context of our project about the possibilities of innovation in an European context [1]. To define the term of frugal innovation the authors cite Pralahad and Mashelkar’s phrase ‘more value from less resource for more people’. The process as they define it focuses both on the outcome of innovation (what is produced and who for) and the innovation process itself (how and who by). An insight that we could find useful in looking at ways to engage citizens in their local governments. Frugal Innovation has traditionally been associated with developing economies particularly India. In contrast, many assume in Europe solutions are often among the most technologically advanced

Looking at countries like Italy the population statistics reveal that 84.68% of a total of 8,005 cities in Italy with a population below 10,000 due to their size plus insufficient resources and limited budgets lack the money to dedicate many resources to new services for their communities

 

Population

Number Total

0-1.999

3.493 43.64%
2.000–4.999 2.098 26.21%
5.000-9.999 1.187 14.83%
10.000-19.999 707 8.83%
20.000-59.999

416

5.20%
60.000-249.999 92

1.15%

>250.000 12

0.15%

The above situation is replicated throughout Europe. The implementation of many decisions taken by national authorities have a direct impact on local authorities. As the part of the government closest to local communities, local governments play a critical role in governance. The quality of service delivery by local governments has a direct impact on citizens. As demands increase most of these cities given their limited resources need to rethink their activities.

Despite the limited resources of many local authorities, frugal innovation implemented well could generate services that provide better value for less affluent customers. Frugality can be achieved in a variety of ways. A common strategy, the report points out, is “de-featuring” (removing features), there bye, improving in the long run robustness of services and sustainability. High tech and frugal innovation are certainly not exclusive. Those solutions aimed at “base of the pyramid” consumers as the study puts it are at times based on advanced technologies

With frugal innovation the aim is to produce solutions and services that are notably cheaper but better. This can be achieved by focusing on users’ needs and prioritizing only the features of the greatest importance to customers. In the process of doing this, frugal innovation may help in a complete rethink of what local government is doing and why.

Collaboration and connection assets emphasized in any discussion of frugal innovation may turn out to be more central and sustainability and circular economy considerations are going to feature more clearly as time goes on. Local governments need to rethink completely their mission and activities engaging their communities as encouraged in frugal innovation movements. In that our Project could play a role in providing a framework for governments to engage citizens.

One might expect European frugal innovation to incorporate more high-tech elements. Certainly the public sector is likely to be an important player as the component of government in closest contact with citizens. It’s important generally to remember that frugal innovation in public services is not just question of efficiency saving; any potential savings are not enough to meet increasing costs and growing demand. Might be useful to conceptualize frugal innovation in terms of what economists would call ”high elasticity of demand” – those areas where, crossing a threshold, a decrease in prices (based on a more focused functionality) will tend to lead to a higher demand.

For local government frugal innovation could help generate increased social and environmental benefits and help to tackle challenges, ranging from service delivery in conditions of austerity and growing demand, plus promoting social and economic inclusion and ecological sustainability.

Meanwhile, there is certainly space for more ‘frugal thinking’ in public services, where efficiency savings and cuts alone aren’t enough to meet rapidly escalating costs and demand and where radically different approaches might be indispensable. Overtime frugal innovation, the authors in the report note, does not always produce “greener, cleaner, more socially beneficial” results. The challenge remains for local governments to encourage frugal innovation in such a way that it maximizes its benefits and minimizes potential issues [2] – that is, using their assets they have more effectively.

[1] http://www.nesta.org.uk/sites/default/files/frugalinnovationsummary_isi_nesta_final.pdf

[2] See more at: http://www.nesta.org.uk/blog/better-less-does-europe-need-frugal-innovation#comment-2488

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