Technology and Innovation Management WORKING PAPER Open Global Innovation Networks as Enablers of Frugal Innovation: Propositions Based on Evidence from India Rajnish Tiwari Cornelius Herstatt December 2012 Working Paper No. 72 An edited & peer-reviewed version of this paper has been published as “Frugal Innovation: A Global Networks’ Perspective” in: Die Unternehmung, 66(3): 245-274. Hamburg University of Technology Schwarzenbergstr. 95, D-21073 Hamburg, Germany Tel.: +49 (0)40 42878-3777; Fax: +49 (0)40 42878-2867 www.tu-harburg.de/tim www.global-innovation.net Open Global Innovation Networks as Enablers of Frugal Innovation: Propositions Based on Evidence from India Rajnish Tiwari and Cornelius Herstatt Institute for Technology and Innovation Management Hamburg University of Technology Schwarzenbergstr. 95, 21073 Hamburg, Germany Tel: +49 (0)40 42878 3776 / Fax: +49 (0)40 42878 2867
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[email protected] TIM/TUHH Working Paper No. 72 Summary Recent years have seen the emergence of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare. In many instances, results on the ground have been, however, rather sobering as firms have generally (probably justifiably) worried that “good quality, low price” products may cannibalize into their regular business. At the same time those very customers that were intended to benefit from the new approach have tended to shy away fearing low quality and social stigma of using cheap products. Using multiple case studies of successful affordability-driven innovations (“frugal innovations”) from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers.