Frugal Innovation: New Models of Innovation and Theoretical Development -- Dr Yasser Bhatti
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This document discusses frugal innovation. It summarizes research on two communities of innovators and entrepreneurs - a global social business incubator and a design program for extreme affordability. The research included analyzing business plans, conducting interviews, and observing a social entrepreneurship bootcamp. Frugal innovation is defined from different perspectives and as having the goals of affordability, adaptability, accessibility, and doing more with less. Examples are given of frugal surgical innovations in India that dramatically reduce healthcare costs. The document then discusses introducing a frugal surgical drill innovation into the UK healthcare system, estimating it could save 85-94% of costs compared to existing solutions.
Frugal Innovation: New Models of Innovation and Theoretical Development -- Dr Yasser Bhatti
- 1. Frugal Innovation New Models of Innovation and Theoretical Development YABhatti@frugal-innovation.com 29 June 2018
- 4. Social entrepreneurs function in contexts marked by Resource Constraints Institutional Voids
- 5. Research Questions Innovation Social Innovation Social Entrepreneurship Resource ConstraintsInstitutional Voids RQ 1 RQ 3 RQ 2
- 6. Study of two communities of innovators and entrepreneurs. 1. Global Social Business Incubator (Santa Clara) 2. Design for Extreme Affordability (Stanford) 163 business plan document summaries, 81 interviews with entrepreneurs, investors, and academics, and 2 months of observations at an annual intensive social entrepreneurship and innovation boot-camp. http://www.cambridge.org/97811071 88976
- 7. Varying Motivations Efficiency-Driven Innovation Social-Driven Innovation User-Driven Innovation Challenge-Driven Innovation 息 Yasser Bhatti 2012 7
- 8. User-Driven Frugal innovation for individuals is user driven to generate solutions to local or personal needs otherwise not met. For personal needs and no aspiration to profit or scale. Efficiency-Driven Frugal innovation for firms is efficiency driven to achieve cost leadership as a competitive advantage. For profitability and scale. Social-Driven Frugal innovation for communities and hybrid firms is social driven to solve problems and create value for society. For social improvement with aspiration to scale. Challenge-Driven Frugal innovation for individuals and networked organizations is challenge and prize driven innovation to radically improve price- performance points of existing solutions for consumers. For inclusive reach. Perspectives on Frugal Innovation
- 9. Definitions of Frugal Innovation based on varying perspectives Institutional perspective: Frugal innovation is viewed as a purposeful systematic change on how development can be best achieved within specific social contexts. This contributes to it developing as a new field (field formation). Process-related perspective: Frugal innovation is viewed as a set of tasks or actions to redesign products and services and reconfigure value chains to improve efficiency and create value for inclusive markets. Functional perspective: Frugal innovation focuses on how the outcomes are used and for what purpose. For instance it may mean to satisfy unmet needs (user driven), become more efficient (efficiency driven), solve social problems (social driven), or solve wicked problems for underserved markets (challenge driven). Operational perspective: Frugal innovation involves means and ends to do more with less for many. Conceptual definition Theoretical definition Operational definitions 9
- 10. Frugal Innovation process entails means and ends to do more with less for many Affordability Adaptability Accessibility Reduced resources, price As good or better performance Widely accessible, scalable, meets needs of unserved Bhatti and Ventresca 2013; Bhatti et al 2018
- 11. C o s t P e r f o r m a n c e Cheap Frugal Standard Bhatti 息 2011 11 Frugal is not cheap Suboptimal Good Enough High Performance
- 13. Figure 4.3b: Price-performance space for frugal innovation 息Remotion (used with permission)
- 14. Figure 4.3d: Overlay of two figures in support of the finding that frugal innovation is not cheap Cheap Frugal Standard
- 15. Performance Time Addresses lack of access to healthcare with a lower cost business model Disruptive innovation in less developed countries Barlow, J. 息 2018 15 Disruptive Standard
- 16. C o s t P e r f o r m a n c e Cheap Frugal Standard Bhatti 息 2018 16 Disruptive and Frugal Suboptimal Good Enough High Performance Disruptive
- 17. Performance Time Addresses lack of access to healthcare with a lower cost business model Disruptive innovation in less developed countries Barlow, J. 息 2018 17 Technology centric view
- 18. Social Innovation Institutional Innovation Technology Innovation Figure 4.2: Theoretical model of frugal innovation Frugal innovation is difficult
- 19. The team realized that designing for inspiration and end users was not enough. It had to design also for manufacture and distribution.
- 20. PUTTING LESSONS INTO PRACTICE FOR HEALTHCARE FRUGAL INNOVATIONS
- 23. Procedures per year Cost of similar procedure in the US Aravind Eye Care 240,000 50x Narayana Health 7,500 30x The Innovation Sandbox, Prahalad 2006 Famous Frugal Innovations both Surgical
- 26. 26 Surgical and Household Drill Bosch Drill: Same speed Same torque Lightweight Bosch Batteries: Longer lasting charge Longer life Very low cost https://youtu.be/YbWD6u5O45g
- 27. CAN WE INTRODUCE A FRUGAL INNOVATION INTO THE UK?
- 28. Musculoskeletal disorder is a leading clinical & economic burden for UK 2.16 million bed days, 7.5% of all hospital admissions.1 3rd largest area of NHS spending at 贈4.7 billion in 2013/14.2 The surgical drill and saw is essential to orthopedic surgery A single surgical drill can cost as much as 贈23,0003 1. NHS Digital, Hospital Episode Statistics 2014/15. 2. NHS England 2013/14 CCG programme budgeting benchmarking tool online at https://www. england.nhs.uk/resources/resourcesforccgs/prog budgeting/ 3. Prime M, et al. BMJ Innov 2018;4:103110. UK Context
- 29. Affordability Incumbent Innovation At the national level, if the NHS were to replace all incumbent drills with similar offerings this could cost 贈115 million. (approximately 5000 at estimated cost of 贈23K per drill) However, if all of NHS providers were to move to the Arbutus Drill Cover System it could cost as little as 贈7.5 m. (estimated cost per drill 贈1500) At the hospital level, the total cost to equip and maintain surgical drill equipment for two theatres over 5 years would be 贈324 500. (11 drills at 贈23K per drill with annual battery replacement for years 25) While Arbutus Drill Cover System would be 贈47 993. (2 drills+2 saws; 22 initial linens; 14 p.a. replacement linens and 4 replacement batteries per drill for years 25). 94% saving 85% saving
- 30. Insanity is doing the same thing over and over again and expecting different results. Albert Einstein
- 31. Make time and space for learning and adopting new ways of working from unconventional sources
- 32. Thank you
Editor's Notes
- #2: Learning objectives: Summarise emerging trends in healthcare innovation, open and frugal innovations Discuss what are frugal innovations in healthcare Question whether frugal and reverse innovations have a level playing field
- #8: From the above perspectives we see that the common features of frugal innovation are serving underserved consumers who face market (market cant reach or make it affordable enough) or technology failure (technology is not designed for those users). So the definitions that stem from this are: i) Overcoming market or technology failures to create inclusive markets. ii) Frugal innovation provides solutions (products, services, distribution, business models) for underserved consumers who face market or technology failure.
- #14: Lecture: Meratul Uroos Episode 8: Show clip on expensive shaadi cards as bad example of high cost => high performance
- #15: Lecture: Meratul Uroos Episode 8: Show clip on expensive shaadi cards as bad example of high cost => high performance
- #19: Find out how to defend Institutional and Business innovation overlap! Innovation under three or any two of the three constraints is Frugal innovation Any two of three sandbox constraints foster frugal innovation
- #23: Key takeaways from the five cases: When we talk about frugality, it comes back to large capital expenditures and people. Changing the setting of care and the providers are the key drivers of frugal innovation. Facilitation of communication and integration across the system (between payers, providers, patients, families, etc) was found to be a critical component of all the models. Empowerment of patients, consumers, and their families to move toward health seeking behavior and change the way they interact with the system of care was also a common element.
- #33: Curators need to: 1) develop standards for innovation presentation 2) agree standards for innovation quality assurance 3) present evidence of innovation adoption within other contexts. We believe a metric combining these three dimensions should be created to help indicate and highlight the best solutions.