Real Life Innovation

Digital platforms like Uber and Airbnb harness the power of the Internet to offer a frictionless marketplace that powerfully matches supply and demand so as to make whole new sets of assets available to customers. Airbnb lets spare room owners make money and makes their asset easily accessible for more travelers.

The idea of offering your spare room on the web is not new, but with Airbnb you don’t have to create your own website and hope that Google-searching travelers find you. We have to challenge the idea that innovation is costing a lot or are just for happy-few that will benefit from the latest technologies available.


This kind of innovation is almost a textbook example of frugal innovation. There is no major capital investment involved and yet it changes the industry and unlocks the value-creating potential. What enables revolutions like this is the existence of broadband networking and mobile infrastructure, cloud-based data storage, and clever digital programming — stuff we already have. The result is a growing set of capabilities to meet consumer needs than we have traditionally imagined. The digital revolution, therefore, is helping to create a more frugal economy, one that generates greater value in a highly efficient, socially inclusive, and eco-sustainable manner. What’s more, many of the innovations originate in relatively poor, underdeveloped regions or are designed to serve low-income customers, which means that the innovators have no choice but to be frugal. Few examples:

Healthcare. Take China, which sits on a ticking demographic time bomb. China can’t build enough new hospitals and train sufficient doctors to take care of its rapidly aging population. To solve this issue, Neusoft, China’s largest IT service provider, deployed a low-cost telemedicine solution that enables doctors in cities to remotely treat older patients with chronic diseases who live in rural areas. This frugal solution is built around affordable and easy-to-use medical devices that can be operated by nurses in rural clinics.

Education. Khan Academy has upended the education sector by offering free tutorials on multiple subjects as short videos via YouTube. Yet, over 5 billion people worldwide don’t have Internet access. So Khan Academy launched KA Lite, open-source software that delivers its educational content without Internet connectivity. Today, underprivileged students in Mumbai learn math through content locally using low-cost tablets.

Energy. Climate change is an accepted danger to all of humanity. To keep the rise of global temperatures below 1.5 degrees Celsius, all countries — rich and poor — need to rapidly transition to renewable energy. Africa, a continent where up to 90% of people lack electricity but where mobile phone penetration reaches 90%, is showing us the way. In Kenya, half of the population uses M-PESA, a mobile payments solution that doesn’t require a bank account. M-PESA is now enabling other disruptive business models in sectors like energy. After paying for a full year, the system is unlocked and the customer owns the product outright. Adding 600 new customers a day, M-KOPA intends to cross the million-unit mark by the end of 2017.

Finance. According to one recent estimate, Europe is home to 50 million low-income people. Traditional banks have been unable to crack this interesting market. Compte Nickel, a French startup that enables people without a bank account to walk into a local store, subscribe to their service in just five minutes, and get an international debit card and an international bank account number. The service enables users to send/receive money with their mobile phone and pay anywhere in the world using their debit card—all at no extra cost. Compte Nickel charges a flat annual maintenance fee of just 20 Euros (compared to 180 Euros charged by retail banks). Adding 20,000 new customers a month and with a 97% customer satisfaction rate, Compte Nickel expects to close 2016 with half a million clients.

Having access to so many things now, a new generation of innovators is emerging to address our basic needs faster, better, and cheaper than traditional providers. These digital pioneers are using frugal innovation, rather than distributive economics, to tackle the global wealth equality situation. I hope more entrepreneurs will join them to co-build an inclusive frugal society where everyone can live better with less.

(extracts from works and speeches from Navi Radjou)


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