Can Frugal Go Global? Diffusion Patterns of Frugal Innovations

Abstract

This paper explores diffusion patterns of frugal innovations. Frugal innovation refers to products or services that are affordable, easy-to-use, and innovated under conditions of resource scarcity. When such innovations migrate from resource-scarce contexts to developed countries they are termed reverse innovation. The diffusion of frugal innovation is, however, uncharted territory. While practitioners show growing interest in scaling up frugal innovations, scholars have dedicated limited attention to their diffusion. Exploring four purposefully selected cases, we identify four main diffusion patterns of frugal innovations. We label these diffusion patterns local diffusion, proximity diffusion, distance diffusion, and global diffusion. Local diffusion refers to a frugal innovation that diffuses within its country of origin. Proximity diffusion indicates a frugal innovation that diffuses to neighbouring and nearby countries along with its country of origin. Distance diffusion is a frugal innovation that diffuses in distant countries, in addition to its country of origin. Both proximity diffusion and distance diffusion take place predominantly where the socio-economic environment is similar in diffusion countries. In rare cases, frugal innovation can diffuse globally, including into developed markets. This study ushers scholars into an emerging research domain and provides new insights for practitioners keen on scaling up frugal innovations.