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  • Rani Tria Anggiani

Frugal Innovation

So we all agree that living in a developing country sometimes has many barriers in terms of starting startups company, but sometimes, these barriers are quite good to challenge our brains and strategy in constructing our business model. The most significant thing that we can distinct between developing countries and the developed one, is.. obviously.. infrastructure and the market itself. In response to this issue, there's this new business paradigm which method can be implemented in developing country, it's called Frugal Innovation.

Frugal innovation or frugal engineering is the process of reducing the complexity and cost of a good and its production. Usually, this refers to removing nonessential features from a durable good, such as a car or phone, in order to sell it in developing countries.

But as time passed, frugal innovation can be implemented into a more various field such as information technology. Interestingly, Information technology these days are not quite the same as the IT that we all know five or ten years ago. Information technology these days are often related to an online based platform such as Website, microsite, social media, and mobile apps. For developed country, many fields have used Online based- information technology as day to day business activities. with high-speed internet, high education, and higher GDP (which helped them in buying a more sophisticated gadget and handheld) of course they have no problem adapting to this technology. But what about developing country? like Indonesia?.

This is the time when frugal innovation emerged. I will take the example of Gojek, and why I think Gojek is one of a local company who succeeds in adapting frugal innovation. If we look at uber, and we all know that it was a big hit at developed country like the US, we see that Gojek was adapting some of Uber's method (which is online-booking-public-transportation) but.. eliminating some of the barriers for developing country, such as.. credit cards, and instead of cars, Gojek uses motorcycle, which is more favorable in developing country because of the traffic jam, lack of decent public transportation, and of course less buying power. In terms of payment, Greek received cash on delivery, which most people in Jakarta has in their pockets rather than credit cards, also, people who have motorcycle and driving lessons can join for Gojek drivers. This giving less barrier to those who want to use Gojek, because it's related so much to them and doesn't take much effort to use it.

What I'm saying here is that doing business in developing country, we still have to do our research well of what happening in another side of the world and assess what's work and what's not. But from there, we have to create less and less barrier for the consumer and know our consumer very well before establishing anything. Innovation is created not to be a barrier for people to adapt it, but rather it has to be a solution and an efficiency for those who use it. Technology is grown to help people get an easier life not the otherwise. So, interested to do some frugal innovation?

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