Abstract
Recent research suggests that emerging economies can act as lead markets for innovations aiming at achieving affordable excellence. On the other hand, the overall R&D intensity of, and the number of patents filed by most firms in the developing world remain low. Only little published research exists so far – going beyond anecdotal evidence based on a limited number of cross-industry cases – about how successful emerging economy firms from a given industry actually are in a long-term perspective and what innovation pathways they take. This paper examines innovation capabilities in India’s auto component sector, which has acted as a key enabler of frugal, extremely cost-effective solutions in the vehicle industry. Results of our multi-layered study, based on sectoral and firm-level data, suggest that firms often engage in open innovation to reduce development costs; but also that they have accumulated significant product development capabilities. Leapfrogging to latest (manufacturing) technologies allows firms to engage in process innovations, lightweighting of components and significant reduction of waste. Very high efficiency levels are found to be central to balancing economic, environmental and technological considerations. The study discovers a remarkable set of frugal innovation pathways that make use of collaborative development, avoid over-engineering and are often driven by economies of scale.
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Tiwari, R., Kalogerakis, K. (2020). What enables frugal innovation? An examination of innovation pathways in India’s auto component industry. In: Tiwari, R., Buse, S. (eds) Managing Innovation in a Global and Digital World. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-27241-8_16
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