Article

Two sides of the frugal innovation coin

The effects of frugal innovation on workplace conditions

coin.jpg

We are all consumers. From billionaires to bums and everyone in between. We all have needs, we all have desires. Whether it is a private plane or a sufficient meal, we all consume. This provides chances for producing companies, from goldsmith to grocer. In innovation there is a part of innovation that focusses specifically on the people that are not all that wealthy. Frugal innovations are innovations with reduced complexity and costs aimed at serving the needs of the bottom of the pyramid. This bottom of the pyramid consists of the world’s poorest people. Specifically focus within this type of innovation will be on people in developing countries.

Frugal innovation is linked to several good and bad effects for their own target group. I want to look at frugal innovation from the perspective of workplace conditions. In the last decade there has been a lot of debate about workplace conditions and living wages. We have seen this in the scandals such as the ones concerning big fashions chains, the smartphone production and the tea and chocolate industry.  But what is the effect of frugal innovation on workplace conditions? Frugal innovation can keep the workplace conditions low. On the other hand frugal innovation could also improve workplace conditions.  How these effects can co-exist shall now be explained.  

Arbeidsomstandigheden-Apple-toeleveranciers-NieuweMediaBlog.jpg

Firstly frugal innovation can be considered a chance for exactly this group of workers. Most of these workers work for quite low wages and are for that reason the people at the bottom of the pyramid. This means that these are the people the frugal innovations are designed for. As consumers of these frugal innovations they can gain a better position. Frugal innovations can enable access to the world, provide with better health care et cetera.

How this can be done will be explained using the example of the Mozilla smartphone. This is a smartphone for 25$ created to serve the needs of the people at the bottom of the pyramid. Now think of a woman, let’s call her Jane. Jane works 15 hours a day in bad labour conditions to support her family. Without a trade union Jane feels powerless, if she will not work under these conditions she might not be able to support her family. Now let’s imagine Jane with a Mozilla smartphone. We have just provided her with access to the world. Jane can directly comment on the working conditions, find the information she needs to discuss her situation, join a trade union and speak up for her right. If a lot of the workers in these production processes have this access, they will have a better position to negotiate their working conditions. Frugal innovations such as these smartphones will provide chances (Fair Wear Foundation, Press of Mozilla).

mozilla smartphone.jpg
Afbeelding1.png

On the other hand frugal innovation is possible by keeping the production costs low. This can be done by keeping the costs in every stage of the production process as low as possible. When keeping costs low it is essential to use cheap materials, keep the wages low, produce locally and produce in a large amount (Zeschky, Winterhalter & Gassmann, 2014). It is also possible to demand long days of the workers which will decrease the safety for the workers in the production process. These long days can already be created by keeping the wages low (Fair wear foundation). All these and many other possibilities to keep the production costs low have bad effects on the workplace conditions.

 

To summarize the frugal innovation can have a negative effect on workplace conditions because of the necessary low costs of productions. Frugal innovation can also have a positive effect on workplace condition because it will help enable feedback and trade unions, provides information and present many other advantages that will not only improve working conditions but also quality of life.

In conclusion when looking at the frugal innovation coin there is both an upside and a downside. How the coin, frugal innovation, is being used in what matters the most. It is just like any other coin.

 

List of references

                Fair Wear Foundation website. Found at: www.Fairwear.org

                Press of Mozilla(2014). Firefox OS Unleashes the Future of Mobile. Found at https://blog.mozilla.org/press/2014/02/firefox-os-future-2/

                Zeschky, M. B., Winterhalter, S., & Gassmann, O. (2014). From Cost to Frugal and Reverse Innovation: Mapping the Field and Implications for Global Competitiveness. Research technology management, 57, 20-27. DOI: 10.5437/08956308X5704235.