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Business

Many Companies waking up to a Unique Competency in Developing world: Frugal Innovation or “Jugaad”

Desh Kapoor Jan 28, 2013

There is value in frugal innovation. And this kind of work comes mostly from the developing countries. Companies are now using this “core competency” to their advantage.

Emerging markets such as Africa, Brazil, China and India are a breeding ground for frugal innovation. Millions of Kenyans today rely on M-PESA, a service that enables them to save, spend and transfer money using their cell telephones without having a bank account. Likewise Selco provides solar energy at low prices to more than 125,000 households in remote Indian villages, debunking the myth that poor people can’t afford clean technology.

Then there’s Gustavo Grobocopatel, an Argentinian farmer who overcame scarcity of land and skilled labor by subcontracting all farming work to networks of small firms. By scaling up his ”asset-light” business model, Grobocopatel has boosted his agricultural output without adding more resources.

All these creative entrepreneurs in emerging markets share a common mindset called jugaad. ”Jugaad” is a Hindi word meaning an innovative fix or an improvised solution born from ingenuity and cleverness.

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