Friday, August 3, 2012

More on Frugal Innovation: The NESTA Report

I had the pleasure of meeting Kirsten Bound, co-author of a new report by NESTA on India’s Innovation System, several years ago when she visited India on an earlier study. That attempt at understanding the complexities of innovation in India resulted in a thought-provoking report titled “India: The Uneven Innovator.” I always thought that was an apt description of innovation in India, for we certainly have islands of excellence - sectors, institutions and individuals - who have done outstanding innovation work amidst a sea of unrealized potential.

So, when I heard that Kirsten was working on a new report, this time for NESTA, with a focus on how the UK could collaborate better with the Indian innovation system, I waited for it with anticipation. I had the opportunity to share my perspective on a couple of occasions with Ian Thornton, the other author of this report, and I was encouraged by the fact that he seemed to be showing the right mix of skepticism and excitement about what’s currently happening on the Indian innovation scene.

Overall, I am not disappointed. Given the pessimism in the west driven by an economic crisis that is unlikely to end anytime soon, it’s not surprising that the report has latched on to the silver lining represented by the emerging economies in general, and India’s ability to innovate with limited resources in particular. Like many other recent books and reports on innovation the NESTA report lauds India as a role model for how frugal innovation can be done. In the process, the report points to some interesting trends, and raises some interesting questions.

The Frugal Innovator

In building its frugality story, the report goes back to familiar examples of “frugal innovation” – the Jaipur Foot, Aravind Eyecare, Narayana Hridayalaya, Selco , Swach and Nano, to name some of the innovations discussed in the report. These are certainly the “bright spots” of frugal innovation in India, but every time I read these examples, I wonder how we extract broader frugal innovation principles from these. That’s certainly a challenge, as my earlier reviews of the books by London & Hart, and Radjou, Prabhu and Ahuja show.

While the NESTA report lauds Indians for possessing the “unusual skillset and mindset for frugal innovation” and points to the thousands of grassroot innovations compiled and documented by the Honeybee Network and the National Innovation Foundation, the fact remains that we still haven’t found a way of scaling up and diffusing these "grassroots" innovations. In fact, they still remain “inventions” rather than “innovations.”To solve this problem, the NIF has tried to connect these innovators to the formal innovation system ranging from research labs to college students, but it’s proving much more difficult than they thought.

Interestingly, the innovators who have been most successful in scaling up their frugal innovations are not these grassroot innovators, but members of India’s educated professional class – people like Dr. Devi Shetty, Harish Hande, and the legendary Dr V of Aravind Eyecare. By Indian standards at least, none of these individuals faced extreme deprivation, so where did the frugal mindset come from?

Other Challenges of Frugal Innovation

Though the NESTA report suggests that frugal does not necessarily mean low -tech, and that some of the frugal innovations do involve using contemporary (if not cutting edge) technology [e.g. the Tata Swach that uses nanotechnology to improve its filtration effectiveness], combining high tech with frugality remains a serious challenge for innovators. Particularly in an environment where high tech skills, and infrastructure are in short supply.

A couple of other assertions – that “a growing aspirational middle class creates the perfect conditions for frugal innovation” and that “the Indian consumer base is… willing to experiment” don’t seem to be on firm ground when one thinks of the struggles of the Tata Nano. At any rate, finding the sweet spot that meets consumer expectations appears to be a substantive challenge.

The Policy Challenge

Since the formation of the National Innovation Council in 2010, the government has formally stated its intention to support the use of innovation to solve national problems like education, healthcare and food security. But how do you do this? The ability of government policy to support innovation (as opposed to scientific research) on a sustained and systematic basis has been mixed in most parts of the world. Even in a country like Israel which is often lauded for its proactive innovation support policies, questions are asked about the effectiveness and efficiency of government intervention. Relatively speaking, the support of directed, frugal innovation is unknown terrain, and India’s efforts in this regard will be watched closely.

I am inclined to agree with the NESTA report when it says that “whether the government’s far-reaching policies can create a more supportive environment for frugal innovation in the first place, and even if it can, whether frugal innovation ultimately offers a way to resolve the tension between excellence and equity in Indian science and innovation, or merely perpetuate it, remains to be seen.”

The Formal Innovation System

The NESTA report provides a good statistical update on how the formal innovation system has been doing. A couple of trends that I noted in From Jugaad to Systematic Innovation persist: China continues to forge ahead on research output measured through publications. While India and China were almost neck-to-neck till 2005, the number of US patents obtained by inventors in China has diverged substantially from that of India since then. The NESTA report indicates that India scores well on efficiency – the investment per research output is low compared to many other countries. But I often wonder to what extent that is just the result of lower wages in India rather than any other more sustainable frugality advantage? For, all the scientific equipment used is imported, and India enjoys no cost advantage in the non-manpower dimensions of the cost of R&D.


My take after reading the NESTA report is that India will continue as an “Uneven Innovator” for many more years to come. This will pose a challenge to others who want to work with us. The NESTA report was driven by the desire of the British government to forge closer innovation ties with India. But, at the end of the report, I am no wiser about how they might do so, particularly if they want to connect with the more fascinating frugal innovations that are happening outside the formal R&D institutions. No wonder that one of the recommendations of the NESTA report is that the UK government sponsor a frugal innovation award – that would give them an indirect means of associating themselves with successful frugal innovation happening in India!

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