January 2015  |  TAGS: , , , ,
Jugaad Innovation

Jugaad Innovation

Navi Radjou says frugal innovation can play a dynamic role today’s developed world.

Navi Radjou believes this age-old concept has a place in today’s developed world.

India’s Mars Orbiter Mission recently made headlines with astonishing images of the Red Planet. Equally impressive: the project’s $74 million cost. That’s less than the budget for the 2013 sci-fi blockbuster Gravity.

According to Navi Radjou, it’s also an example of Jugaad innovation. His 2012 book, Jugaad Innovation, explored the essence of the concept, which is a Hindi word for “improvised solution.” His next book, Frugal Innovation, published by The Economist, shows how firms can create more value with fewer resources.

ACCESS: Can you briefly explain Jugaad?

NAVI RADJOU: Jugaad is when you see adversity, you don’t run away or confront it with brute force, but rather you turn it into an advantage. For example, lack of electricity is not an issue for entrepreneurs in Africa who use bicycle power to recharge cellphones. And in India, a craftsman created a clay refrigerator that doesn’t use electricity; instead, it relies on evaporation — water trickles down the sides of the unit absorbing heat, and cooling the food inside. Jugaad is about turning constraints into opportunities.

NASA’s Mars mission MAVEN cost nearly $700 million. In India, they asked, “How can we do it cheaper?” Instead of prototypes, they created virtual ones using computer simulations. They reused technology from previous projects. They also designed the satellite to be smaller and had it orbit longer around Earth to gain more velocity when propelled, which required less energy.

ACCESS: Your books look at leaders from GE, Procter & Gamble, and PepsiCo who embrace Jugaad and frugal innovation. Are there any other examples?

N.R.: In 2004, Renault launched Logan, a reliable car priced at $6,000, making it the least expensive car in the West. Instead of “defeaturing” an existing car, the company designed the Logan from the ground up. For example, it designed a flat windshield, which is easier to build than a curved one. It also simplified manufacturing by using fewer components. Today, Renault’s low-cost, no-frills cars account for more than 40 percent of its global sales. To date, no other Western carmaker has managed to produce such a low-cost car.

ACCESS: What is driving interest in Jugaad?

N.R.: The economic crisis made Western consumers frugal. Frugality is no longer a temporary economic imperative. It is becoming a new cultural norm, especially among Gen Y and Z consumers. My new book, Frugal Innovation, explores how this big shift in buying behaviors and values is driving U.S. and European firms to create affordable and sustainable products using fewer resources.

ACCESS: Can you provide another example of Jugaad innovation in the West?

N.R.: Paul Benoit, a French entrepreneur, has done something very Jugaad. He noticed that microprocessors used in computers, when they are doing calculations, generate heat that is typically dissipated. So he developed “digital radiators” built with microprocessors that are connected to the internet. They can do computation work at low cost for scientists and companies anywhere in the world who require high-performance computing power. The digital radiators harness the heat generated from microprocessors to heat houses and office buildings.

ACCESS: Do you see the Jugaad mindset as a way of connecting the developed and the emerging world?

N.R.: Yes. I think it can help us move beyond the mindset of, “Oh, we can do it all ourselves here in the U.S., even if we’re inspired by what is happening in Africa and India.” The key is to consider how we can co-create across geographical boundaries. We need to take the developed world’s technology capabilities and integrate them with the resourcefulness that you find in places like India. If you combine the talents and capabilities from around the world, then you can come up with frugal solutions that will be relevant and useful for all humanity. Multinationals like Xerox and IBM are building global innovation networks that integrate talent, ideas, and technologies from around the world.

ACCESS: What are the challenges to adopting the Jugaad mindset in the West?

N.R.: Challenges include the wrong perception of Jugaad solutions as being “low-tech” and “low-quality” and the difficulty to think and act frugally in resource-abundant Western societies. But I think these challenges will be dealt with because the younger generation, which grew up during the worst economic recession, is inherently frugal and environmentally conscious, and is more aware and interested in ideas from anywhere in the world. If you look at Facebook, young people have friends all over the world. Today’s young Americans are the most globalized generation we’ve ever had. They already have the Jugaad mindset.

And Western corporations get it — they have no choice. Today, two-thirds of the world’s consuming middle-class live in the United States and Europe. In 20 years, two-thirds will be in India and China. Businesses will have to go where the markets are going to be, because that’s where the growth will be. To succeed in those cost-conscious markets, however, Western firms must unlearn their old “more for more” business model and learn to do “more with less.”

To see more trends and ideas about global opportunity see the Access 25.

COMMENTS

  1. Jack Kaslow - February 23, 2015

    This is a refreshing read. The most inspiring and innovative operations are in countries where people are the greatest resource and collaboration and creativity are already a a necessity. All the best to Mr. Radjou. I'll be dropping links to this article every time I go online for at least a week. The young people of the US have frolicked in a downpour of indiscriminate praise, easy money, and limitless resources for several years now, and all they have produced are deriviative iterations from the Steve Jobs business model that places profits over people – often referred to as consumers or users, as if helpless and too simple-minded to recognize and control their additions (even as the tactics for nurturing and profiting from these addictions are openly discussed online by those lacking sufficient conscience and awareness as to participate in "modern marketing," which is more easily recognized by its original name "fraud"), the same addictions and the same learned-helplessness experienced as children by today's twenty-somethings, many of whom owe a significant debt to the advances in technology and medicine that may extend their lifetimes well into the triple-digits, decades beyond the average lifespan of previous generations and perhaps just enough time for at least one to grow up.

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