I've spent my career studying innovation. What has struck me over the years is how differently large Western corporations and innovators in emerging markets like India, where I grew up, approach it.
“Jugaad” is the Hindi word for finding low-cost solutions in an intelligent way, and “jugaad innovation” is a term to describe three common traits of Indian entrepreneurs. First, Indian entrepreneurs are very frugal in their approach, very good at doing more with the limited resources they have. Second, their mindset is very flexible. There is a lot of improvisation and lateral—creative, nonlinear—thinking. And third, their solutions seem designed to bring people who are outside the formal economy into the formal economy, so these solutions are very inclusive.
A lesson in a fridge
Let me illustrate with a comparison of refrigerator technology. In advanced countries, consumers can spend as much as $3,000 for a fridge intelligent enough to talk to them. But for a fraction of that price in India, thanks to a humble social entrepreneur, the poor can buy a $30 clay fridge that uses the cooling properties of water stored in a reservoir at the top. When that water evaporates through the clay, it keeps fruit and vegetables fresh for up to five days—without electricity.
The message to Western corporations—and a lesson from which nonprofits also can learn—is that they can no longer just rely on the old formula of top-down strategies, expensive R&D projects, and highly structured innovation processes. Rather, they should consider jugaad’s bottom-up approach to frugal and flexible innovation.
My coauthors Navi Radjou, Simone Ahuja, and I defined “jugaad innovation” as the art of improvising “good-enough” solutions using limited resources. And interestingly, when we published our book on the topic in 2012, people from other parts of the world, such as Brazil, wrote to say, "We have something similar in our country." Moreover, we’re now seeing equivalents in the West. A good example is the Raspberry Pi, a $30 computer originally designed to help schoolkids in the United Kingdom—and now around the world—tinker with computer hardware and learn coding.
Innovation inspired by adversity
The story of the clay fridge reveals some underlying principles of jugaad. Its inventor, Mansukhbhai Prajapati, has a high school education and grew up in a family of potters. In 2001, an earthquake devastated his village in the Indian state of Gujarat. On a morning soon afterward, he opened the local newspaper to see a picture of a broken clay pot under the caption: "Poor man's fridge broken." And that actually gave him the inspiration. He set up a factory and trained local women to make clay refrigerators. What had been a disaster ended up providing women with additional income, and he went on to sell these to other poor people via the Internet. Prajapati’s work embodies the six principles of jugaad:
- Doing more with less—and of course that's what these people do beautifully. They take the resources they have in plenty and use them to substitute for resources they don't have.
- Creating very simple solutions. The design helps to conserve resources, but a simple design also ensures that these innovations will be widely adopted and easily maintained.
- Using an agile approach. A traditional approach might suggest “How do we create a refrigerator cheap enough for poor people to buy, and provide affordable electricity to operate it?” Lateral thinking says “How do we take materials readily available at an affordable cost and turn them into reliable refrigeration?”
- Getting inspiration from adversity (the earthquake, in this case).
- Viewing marginal people as not only beneficiaries, but also part of the solution.
- Following passion. These innovators really follow their hearts. This is important, because what they're doing is quite difficult and requires persistence.
Large NGOs face the challenge that innovation can be expensive and slow; it’s hard to be agile because of legacy processes and because it’s hard to include outsiders.
One example of how to overcome the “must-be-invented-here syndrome” is to find more agile outside partners and co-develop solutions. This has been demonstrated by Ford Motor Company, which empowered its product-development employees to tinker with innovation tools and software at TechShop Detroit, an independent research lab. The collaboration has succeeded in reducing Ford’s R&D costs, motivating its employees, and increasing the number of patents it has filed.
Barclay’s Bank, meanwhile, has begun partnering with financial technology startups to develop customer solutions by mining data the bank is unable or unwilling to exploit on its own. The bank even has accelerators in four countries that house and then absorb innovations from the startups as they mature.
Among NGOs, perhaps the most impressive example I’ve encountered is Bangladesh’s BRAC, which does frugal innovation at scale in areas such as primary health and primary education. It also sponsors an annual Frugal Innovation Forum.
Jugaad also informs some of the most creative multinational initiatives in financial inclusion, drawing in people outside the formal economy. M-PESA, a well-known mobile payment service for typically migrant people not served by a bank, is a good example. With M-PESA, for example, a woman in a rural village can use her basic cellphone to not only speak to her son in Nairobi, but also receive money from him. She could text the request, accept the electronic money on her cellphone, and cash it at a local shop. Today, more than 25 million people use M-PESA in Kenya alone, and many others in countries such as Afghanistan have joined the program.
Meanwhile, researchers at UC Berkeley have created CellScope, which turns cellphone cameras into otoscopes and dermascopes—devices that let parents monitor their children’s symptoms at home and send the list of symptoms to consultants who are located remotely.
As we attempt to solve important questions at scale, this kind of frugal, flexible, inclusive innovation is just what the world needs. Organizations don’t need to actually be big to think big in ways that improve lives everywhere.