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Innovation seems to be a prime directive at almost any firm I run into, regardless of industry.  How do you get more of it?  In these tough times the answer is no longer to throw money at it.  What we increasingly need is frugal innovation, what the Indians call Jugaad. It is an idea, whose time has come.

Earlier this year I had the pleasure of traveling to India with 30 McGill MBA and B.Com. students to meet with executives of a number of large companies in New Delhi, Mumbai, and Bangalore as part of the ongoing Hot Cities of the World Tour.  The word Jugaad turned out to be the word of the trip. A word that I believe should be adopted by many firms in the West.

We first ran into the word in London enroute to Delhi.  What would have otherwise been an unfortunate 15 hour layover at Heathrow on the way to India, was made quite enjoyable thanks to a few activities in London, including a visit to the offices of The Economist. We sat down with Adrian Wooldridge, Management Editor and Schumpeter Columnist, who had just returned from India and was glad to share some of his thoughts with us.

One of the hot topics: frugal innovation, the essence of which is captured by the Jugaad mindset, a Hindi word that in a nutshell refers to making do with what one has to solve one's problems (also implying a certain degree of improvisation). In a business context it means bringing innovative products to market despite limited resources - if not thanks to limited resources, since it is the financial constraints of producers or customers (or both) that drive the innovation in the first place. Frugal innovation results in great value: no-frills, good quality, functional products that are also affordable to the customer with modest means.  If you want to hear more of what Adrian said about frugal innovation, listen to the youtube video below.  It is only a recording, there is nothing to watch due to technical problems...

-Article by Karl Moore

Read full article: , May 24, 2011