Design Thinking for Frugal Innovation: Unleashing Sustainable Business Models in Emerging Markets

Abstract

Frugal innovation is a hotbed for low-cost innovative solutions that addresses the needs of underprivileged customers in emerging markets. Many of such frugal innovations are designed and developed by organizations that work at the grassroots, and, develop solutions in response to the interests of disadvantaged communities. With a central tenet of transforming an existing or undesirable state into a desired state, Design plays a significant role in meeting the unmet needs of such disadvantaged communities. Lately, Design Thinking is increasingly gaining traction as a human-centered approach to innovation that focuses on creative, innovative, and iterative development. The foundation of Design Thinking lies in a strong desire to understand more about the people for whom the products and services are developed. When combined with the principles of sustainable business models, design thinking can lead to frugal innovations that not only meet the needs of underprivileged customers but also engender long-term social, economic, and environmental implications. However, studies focusing on the interplay of design thinking and sustainable business models, to unravel the outcome of frugal innovation are scanty. The current study fills this knowledge gap by uncovering how design thinking and sustainable business models can jointly help in improving the outcomes of frugal innovation practices in emerging markets. The research methodology comprises qualitative data collection through a multi-case study strategy using a grounded theory approach. The findings result in a conceptual framework that can be utilized to assess the performance metrics of organizations practicing frugal innovation in an emerging market context. The framework suggests that the outcome of frugal innovation can be measured using various indicators such as affordability, accessibility, energy efficiency, empowerment, and a human-centric approach. By focusing on human-centered solutions and maximizing the potential of frugal innovation, the study’s contribution can potentially offer insights for organizations aiming to create a sustainable impact.