Posted by: Bruce Nussbaum on January 29, 2008
If you go to the official Tata Nano website and check out the bottom left corner, it says “inclusive innovation.” Click on that and you get to a discussion on the kinds of innovations that Nano represents.
One is called “frugal engineering” by Renault-Nissans’s chief Carlos Ghosen, referring to the simple and inexpensive way the car was developed. It is a methodology you see all over India—in health care, telecom, drug development and now car manufacturing. I prefer to call it “Frugal Innovation.” And I expect India to be exporting this form of process innovation all around the world, just as the Japanese exported Quality Manufacturing.
The other is called "inclusive innovation" because the inexpensive process produces an inexpensive product that people, even at the Bottom of the Pyramid, can afford. Again, products sold as sachets, mobile communication service sold by the minute, cataract operations that cost a fraction of those in the West--all these are Indian business model innovations.
I think the term "Frugal Innovation" actually captures both ideas. Let's start calling it that, unless you have a better term.
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