Frugal Innovation in Healthcare: Aligning Systematic Review, Patterns, and Factors for Diffusion in Developing Economies

The Economist (2010) defines frugal innovation as “instead of adding more bells and whistles, strip the products down to their bare essentials.” This definition is becoming an interesting phenomenon for academia and practitioners around the globe. This phenomena have changed the traditional ways of doing business in emerging economies and by 2025, almost 50% of the global organizations will have shifted their focus toward emerging economies because of their lucrative growth potential (Dobbs et al., 2013). The bottom of the pyramid (BOP) is an unexploited market that constitutes more than four billion people living their lives on less than 2 US dollars per day (Prahalad, 2004). Emerging economies have changed the traditional ways of doing business. Weyrauch and Herstatt (2016) identified three criteria for frugality: low cost, focus on core functionalities, and optimized performance level. For example, General Electric (GE), an American Conglomerate, invented a pocket sized ultrasound machine (Vscan) at the low cost of $15,000 that is battery operated, easy to use, and has a performance level, which meets the expectations of the proposed market. It was originally developed for China and other emerging economies; however, after a great success it was adopted by developed economies like the United States (Govindarajan and Trimble, 2012; Hossain et al., 2016). The main idea behind the development of frugal innovation is to cater to the needs of non-affluent customers in emerging economies who cannot afford expensive products (Soni and Krishnan, 2014; Govindarajan and Trimble 2012). Frugal innovations have been developing at three levels: first, MNC like General Electric, have research and development centers in emerging economies such as in India and China. They develop frugal products, for example, Vscan and Siemens fetal heart rate monitor. Second, local multinational organizations in emerging economies develop frugal products such as TATA Nano (the world’s cheapest car) and TATA Swach (a water purifier) by TATA, which is an Indian conglomerate. Third, grassroots entrepreneurs understand the local situation and even without proper education and knowledge often devise quick, smart and low cost solutions to local e.g. MittiCool (a clay made fridge) (Kumar & Puranam, 2012). A number of researchers in the field of frugal innovation have explored the differences and similarities between frugal innovation and other types of innovations (Weyrauch & Herststt, 2016; Zeschky, Winterhalter & Gassmann, 2014; Brem & Wolfram, 2014; Landrum, 2007). Some researchers are trying to identify the link between frugal innovation and sustainability (Kalogerakis, Fischer & Tiwari, 2016; Kahle et al., 2013; Rosca, Arnold & Bendul, 2016; Pansera & Sarkar, 2016). Moreover, other researchers are defining the significance of frugal innovation for multinational organizations in the competitive world (Tiwari & Herstatt, 2012; Anderson & Markides, 2007; Agarwal & Brem, 2012). Human capital is one of the strongest assets for the economic progress of a country. To make the most out of these valuable assets, countries need to invest in healthcare services (World Bank, 2017). Access to healthcare and wellbeing is a human right. Inequalities in healthcare continue to exist despite the progress that has been made worldwide in recent years to improve healthcare access and wellbeing (UN, 2015). Increase in health expenses is recognized as a serious worldwide concern that increases poverty (World Bank, 2017). Frugal innovations have the potential to offer simple and economical solutions to global healthcare challenges. Despite the potential of frugal innovation in healthcare, this context has rarely been studied. The objective of this dissertation is therefore to provide an in-depth analysis of the concept of frugal innovations in healthcare. With this aim, the first study provides a systematic review of frugal innovation in healthcare. Data for this study was collected using Google scholar, EBSCO, Cochrane library, Scopus, and Web of Science. “Frugal innovation in healthcare” and “frugal innovation and healthcare” were the two keywords used to search the data from the year 2006 until 2016. To conduct the analysis for the study, we used the Prisma review methodological approach (Moher, Liberati, Tetzlaff, Altman, & The Prisma Group, 2009). In total, 14 research articles were included in the study; these were based on the inclusion criteria of language and availability of the articles. The literature was categorized into two clusters: relationship of frugal innovation with sustainability and the importance of frugal innovation for multinational organizations. The study provides an exciting opportunity to advance our knowledge of frugal innovations in healthcare. In study 2, the patterns of frugal innovations in healthcare were examined by closely analyzing the 50 selected cases of frugal innovations in healthcare. Of the 50 selected innovations, various characteristics such as the country of origin, first launch market, type of innovator, type of innovation, type of care, and geographic diffusion were investigated. The finding shows that most of the frugal innovations in healthcare originated in the US (i.e., in the industrialized world). India is the most frequent first launch market for such innovations. Academia is the strongest driver with respect to different types of innovators. Frugal innovations place greater focus on neonatology and general practice, and most of the innovations are product innovations. Moreover, the study examines the relationship among these variables to obtain deeper insight. Together with various limitations, further research areas for frugal innovation include an adequate business model and successful factors responsible for the diffusion of frugal innovation. The study 3 aims to identify the factors that affect the diffusion of frugal innovation in healthcare in developing economies. Two frugal healthcare innovations were selected, including one product innovation and one process innovation (Jaipur Foot and Narayana Hurdayalaya Heart Hospital). Interviews from experts in the field of cardiology and orthopedics were conducted in Pakistan from January 2018 to March 2018. The study was exploratory; therefore, thematic qualitative text analysis was used for the analysis (Kuckartz, 2014). The results show that only 11% of the participants knew the term frugal innovation belonging to the orthopedics medical specialty. Sixty-eight percent of participants were using frugal products or techniques in their hospital, for example, locally made implants, low-cost medications and techniques, government -recommended products, refurbished machines, and locally made stents. The driving force behind using these frugal products and techniques lies in three factors: innovation characteristics and user preferences, patient satisfaction, and social system. A lack of awareness, political reasons and other reasons were the barriers for not adopting the above-mentioned frugal products and techniques in their hospitals. Innovation attributes and recommendations from hospital owners and administration as well as the government were the most important drivers for adopting these innovations. In addition, participants identified hospital administration, seniors and consultants, and government as important stakeholders that are responsible for implementing these particular innovations in hospitals. The study has various limitations and provides additional areas for future research.

Level thesis:degree_level

thesis.doctoral

Grantor dc:publisher

Universität Leipzig

Year

2021

Author dc:creator

• Arshad, Hareem

• frugal innovation
• healthcare
• diffusion of frugal innovation
• developing economies