“Think local” is a mantra of frugal innovation. In developing nations, where frugal concepts first emerged, this is driven in part by the low cost of local resources, especially labor. But, with frugal innovation’s focus on serving the poor (Prahalad’s Bottom of the Pyramid), it is no less important, that the local focus can spur development.
Husk Power Systems not only brings electricity to rural villages, it brings employment to those who run the equipment and collect the fees. The company’s success also created an opportunity for locals to sell compact fluorescent light bulbs, and this has given local people retail expertise so that now they are discount suppliers of soap, biscuits, oil, and other products. The char from burned rice husk were turned into incense, providing employment for 500 women.
Not surprisingly, the localization aspect of frugal innovation builds local support and imbeds innovations within a community, increasing the potential for long-term success. Many people benefit directly or indirectly from the innovation, and this builds a base of supporters.
This is not small thing. Innovation often creates winners and losers, and notoriously incites resistance. In fact, those who oppose technologies still may be called Luddites, in reference to the English textile workers who smashed the machinery that took their jobs away.
Naturally, the appeal of saving money, especially in our austere times, is one reason why business leaders in developed countries have an interest in frugal innovation. Key concepts like simplification have obvious advantages, but “local” perspectives are also relevant.
Local resources may be less expensive or even free resources. IBM has used Second Life as a rich online platform for meetings, training and sales. Its internal forums were used to explore, test and develop open source software before management support existed.
This points to how local labor might be interpreted within a corporate perspective. Volunteers provide free labor if managed with sensitivity and skill. They are an invaluable resource, not only because much of their effort occurs off the clock, but because non-traditional innovators are recruited. These people bring real-world experience that may be less available to people working in research and development labs. They tend to look at problems and opportunities differently, and they may bring a sense of urgency since they are closer to people who feel the needs.
Finally, corporate culture is an essential element of gaining acceptance for an innovation. Unlike the Luddites, who had little real power, an executive who is risk averse or protecting turf or just doesn’t “get it” has the clout to bring innovation to a halt. This is especially true if he or she suspects adoption of the innovation will make him or her a loser.
The “everybody’s a winner” aspect of localization is powerful in terms of reducing risk and concerns and allowing the innovation to be a natural, organic, and familiar change within an organization. The more proof there is of value and the more an executive is surrounded by people who have participated in an innovation and share enthusiasm for it (instead of opposing it), the less resistance there will be to accepting and even scaling up an innovation.