At a time when consumers in the West are being prepped for Google glasses and smartphones treat voice calls almost like an afterthought, the Indian concept of jugaad or street-smart quickfix seems counterintuitive. But Jugaad Innovation, the 2012 book by Jaideep Prabhu, Navi Radjou and Simone Ahuja argued it was imperative for western companies to use frugal innovation to stay competitive. Prabhu, an IIT graduate and now the Jawaharlal Nehru Professor of Indian Business and Enterprise at University of Cambridge, was in Toronto to deliver the message of Jugaad 2.0 to audiences at TiE or The Indus Entrepreneurs and the University of Toronto. Indira Kannan met Prabhu to ask about the role of jugaad in big business.
How and why is jugaad relevant today?
Let's start with emerging markets like India. Upward of 40 per cent of Indians don't have access to financial services, and are outside the electricity grid. And similarly for healthcare, education and so forth. You have to be able to create solutions for them that are frugal, highly affordable, and not heavily resource dependent. This is the case in other emerging markets, but we're also seeing an interest in this in the West where you see a parallel hollowing out of the middle class, growing pressures on budgets whether in households or governments, and therefore a need for frugal innovation.
Will western consumers actually accept jugaad products, especially in an age where there's seemingly a demand for an app for everything?
You've put your finger on it - I would say an app is the western equivalent of jugaad. It's frugal, there's a lot of improvisation and can be done by a small team of people sitting in a room with basic computing devices. But to go back to the heart of your question, in our book we use the example of Mansukhbhai from Gujarat and his concept of the Mitticool clay refrigerator - it has obvious relevance to India because you have a large number of people who would like to keep fruit and vegetables fresh but cannot afford a refrigerator or there's no electricity. Will it sell in the West? Probably not in the same way. But you might imagine a niche, like boutique hotels that are green. They could have this in every room where you really don't need to cool things but just keep them cool. I think it's not the specific products that you could bring back to the West, it's more the mindset.
Jugaad often has negative connotations in India, denoting a shoddy quickfix. How do you differentiate that from genuinely innovative jugaad?
You've been kind because in India sometimes jugaad is downright illegal activity. But I suppose even if you were doing good things and legally, you could do them shoddily. But how do you apply the ingenuity that people use everyday to achieve something that's of a higher standard? That's where you need companies, you need professionals. And that's where the concept of Jugaad 2.0 becomes interesting - basically you're marrying that frugal flexible mindset to the process culture that you see many Indian companies have achieved by virtue of competing in India, but also outside India. I think the future in India will belong to companies which can do that and possibly if they can take it elsewhere it would be a competitive advantage.
Where do you see jugaad innovation being most relevant, in what context?
I think the big opportunity is in the emerging markets, to be able to bring on board something like four billion people who are outside the formal economy. This is a five-trillion dollar market that is basically untapped. The emerging markets offer opportunities for local companies, small entrepreneurs and multinational corporations. The local entrepreneurs typically have a deep understanding of the context and therefore can come up with ingenious solutions and they also have the passion to solve a problem. What they don't have is scale. The larger companies have those resources but often don't have the local knowledge or motivation to solve that problem. So that sets up the possibility of partnerships. You already see this happening in the FMCG sector for example, with Unilever's Project Shakti. You also see this in mobile banking.
What would be the implications for Intellectual Property rights? A lot of Western companies complain that's a loose concept in developing countries to begin with.
There's some truth to that. But innovation means two very different things to the large Western company and to people operating in emerging markets. In the West innovation is about R&D teams, big budgets, planned projects, pushing the tech frontier, it's about IP and recovering those investments by charging premiums. In an emerging market, it's almost diametrically opposite. It's about cutting costs in any way you can, not having capital expenditure if you can avoid it, by partnerships, by improvising solutions. It's not about pushing the tech frontier, but meeting market needs by using existing technologies. And it's not about IP at all. In fact, many Chinese companies, even if they do create some IP, don't bother patenting it. For me innovation is about meeting a market need, IP on the other hand sometimes works against that. It's like protecting your idea when actually you should be getting it out there.
Is there an element of reinventing the wheel in jugaad for the West?
Sometimes it is or they rediscover their roots. An interesting story I heard was of the German white goods company Miele. In India it was fascinated by the fact that people in Punjab use washing machines to make lassi. And they decided they would showcase this in their museum in Germany. Somebody pointed out to them that in Germany, Miele got started because the person wanted to figure out a way to churn milk. So they designed this machine to churn milk and then discovered they could use that same machine to wash clothes. They were amused by these Indian farmers but actually that's how their own company originated, which is sort of like rediscovering your own past.
JUGAAD INNOVATION:,
A FRUGAL AND FLEXIBLE APPROACH TO INNOVATION FOR THE 21ST CENTURY
Author: Navi Radjou, Jaideep Prabhu, Simone Ahuja
Publisher: Rupa
Pages: 242
Price: Rs 295
