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Open global innovation networks as enablers of frugal innovation: propositions based on evidence from India

  • Tiwari, Rajnish
  • Herstatt, Cornelius
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    Recent years have seen the emergence of low-cost innovations targeted at economically weaker sections of the society, seeking to align business with social welfare. In many instances, results on the ground have been, however, rather sobering as firms have generally (probably justifiably) worried that 'good quality, low price' products may cannibalize into their regular business. At the same time those very customers that were intended to benefit from the new approach have tended to shy away fearing low quality and social stigma of using cheap products. Using multiple case studies of successful affordability-driven innovations ('frugal innovations') from India we investigate how firms can effectively reduce market and technology uncertainty of product innovations targeted at price-sensitive customers. The key criteria to success seem to lie in reducing the overall cost of ownership and enhancing customer perception of quality and image. The case studies reveal that affordability-driven innovations are especially successful when firms seek recourse to open global innovation networks (OGINs) for collaborative development in all phases of the innovation value chain.

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    Paper provided by Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management in its series Working Papers with number 72.

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    Date of creation: 2012
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    Handle: RePEc:zbw:tuhtim:72
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    1. Herstatt, Cornelius & Tiwari, Rajnish & Buse, Stephan, 2008. "India's National Innovation System: Key elements and corporate perspectives," Working Papers 51, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    2. Aneel Karnani, 2009. "Romanticising the poor harms the poor," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 76-86.
    3. Tiwari, Rajnish & Buse, Stephan & Herstatt, Cornelius, 2007. "Innovation via global route: Proposing a reference model for chances and challenges of global innovation processes," Working Papers 49, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    4. Frédérique Sachwald, 2008. "Location choices within global innovation networks: the case of Europe," The Journal of Technology Transfer, Springer, vol. 33(4), pages 364-378, August.
    5. Stephan Buse & Rajnish Tiwari & Cornelius Herstatt, 2010. "Global Innovation: An Answer To Mitigate Barriers To Innovation In Small And Medium-Sized Enterprises?," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 215-227.
    6. Tiwari, Rajnish & Herstatt, Cornelius, 2012. "India - a lead market for frugal innovations? Extending the lead market theory to emerging economies," Working Papers 67, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    7. Tiwari, Rajnish & Herstatt, Cornelius, 2011. "Role of "Lead Market" factors in globalization of innovation: Emerging evidence from India & its implications," Working Papers 64, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    8. Ramani, Shyama & SadreGhazi, Shuan & Duysters, Geert, 2010. "On the Delivery of Pro-Poor Innovations: Managerial Lessons from Sanitation Activists in India," MERIT Working Papers 018, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Tiwari, Rajnish & Herstatt, Cornelius, 2009. "The emergence of Indian multinationals: An empirical study of motives, status-quo and trends of Indian investments in Germany," Working Papers 56, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
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