The Social Impacts of Frugal Innovation – Impact Hub Vienna
The world is full of really great combinations jam and bread, Batman and Robin, and social impact and frugal innovation. These combinations are natural and the separate pieces feel odd without their partners. And while that last one is new to the list; we are certain you won’t ever think about them separately again after reading this article.
The definition used at Impact Hub Vienna explicitly links social impact and frugal innovations: “high-quality, resource-light and affordable products and services in response to the specific needs of a target group. They address issues that are often underserved, through resource-efficient solutions that are affordable and easily available.” Therefore frugal innovations are, by definition, linked to positive social impact.
The affordability aspect is what makes frugal innovation particularly relevant in the current climate. There is a high demand for low-cost quality products at the moment as people are confronting increasing financial difficulties due to nationwide economic stress and global events far out of their control. Large companies are reacting to increased demand in emerging markets, providing targeted and market driven solutions while keeping quality and the needs of the consumer foremost in their planning and development. Mercedes, Siemens, and Google have all jumped on the frugal innovation trend and their range of products and services in these markets reflect the quality the brands are known for while keeping their products affordable. But does this emerging consumer-focused methodology have the capacity for social impact?
The answer is: yes.
The Best of Partners: Social Impact and Frugal Innovation
Social Impact is a nebulous term, encompassing everything from more inclusive policy changes to environmental sustainability. However, the accepted definition is the positive effect action (or inaction) it has on communities. These communities can be global or hyper-local. What matters is a pressing social need within the communities is addressed through inclusive means.
When Mercedes Benz was looking to create a cost-effective truck for the Indian market, they spent time with truck drivers all over the country to understand their needs and design a product which matched. When Martin Wesian was personally affected by cholera while travelling, the need to create a cheap, efficient, and accessible solution for clean drinking water became clear in his mind, and so he developed WADI, which is now in use in Uganda and Kenya. Graggar Bakeries in Vienna helps disadvantaged communities by designing and building specific ovens to bake bread and consulting in the development of business plans to make the effort sustainable in the long term.
So, what do trucks, clean water, and bread have in common?
While these are all frugal innovations, they are inexpensive trucks, disinfection systems, and ovens. They are also so much more. They have massive impacts. In order to build the trucks for the Indian market, Mercedes Benz built local factories. Which have now expanded to manufacturing buses as well. Creating well paid and safe jobs. While these are still fossil fuel powered, they use less fuel and produce less emissions than their counterparts in the region. WADI and Helioz have worked hard to ensure clean drinking water is available in Uganda and Kenya, reducing the effects of water borne pathogens, like cholera, hemorrhagic e-coli, and dysentery.
Creating healthier communities. Graggar Bakeries enables income generation and self-sufficiency in some of the most economically depressed areas of developing economies. They work with communities to design ovens specifically tailored to the area’s needs and resources, including fuel sources. They work with communities to develop business plans to support long-term sustainability of the local bakery and a community reinvestment plan for the profits. That is already a lot. Locally, Graggar Bakeries works with some of the most disenfranchised members of society, persons with cognitive disabilities. They provide apprenticeships as bakers or confectioners, enabling and empowering people. They work with Caritas in a number of countries, especially in the Balkans to provide support and programs.
These are companies, through their products and services, with massive social impacts. From job creation to economic empowerment and healthy communities to reinvesting in development. These are the impacts every social entrepreneur strives to achieve. Solving a local issue using innovative processes and enabling people to build stronger communities and economic partnerships. Their use of the frugal innovation concepts enabled them to create products and services which the communities needed. Their targeted consumer driven processes mean their solutions were the most usable and meaningful.
As mentioned before, it will be hard to separate frugal innovation from social impact. They are made for each other.
New Funding Opportunities for Frugal Innovations
The “Innovation for a Better World: Advanced Solutions for Sustainable Development” project is here to help organizations navigate these dynamic markets and through funding. The project is a pilot funding scheme on frugal innovation jointly developed by ADA and FFG to help organizations from Austria and the Western Balkans make meaningful contributions to the Sustainable Development Goals.
The political situation throughout the Western Balkans is stabilizing and the economies are growing. Austria is uniquely positioned, with traditional trade ties and a significant start-up eco-system, to partner with Western Balkans entrepreneurs, start-ups, and subject matter experts to create new and innovative solutions for existing challenges.
The funding packages are substantial for companies in Austria with working partners in the Western Balkans. The details for the funding packages and eligibility requirements are on our partner websites. But we have a quick summary here: for projects using innovation processes with significant involvement from stakeholders in the Western Balkans and with a maximum cost of €150,000 euros the FFG is offering €75,000 euros for eligible projects. ADA has a generous funding package for eligible projects, at €200,000 or 50% of direct costs. And there are further provisions for feasibility studies.
We know products and services developed using frugal innovation have the potential to make huge impacts on the economy and the quality of life of people who use them.