Creating and Capturing Value: A Consumer Perspective on Frugal Innovations in Water and Energy in East Africa

Frugal innovation emphasizes the reduced use of resources and cutting of costs through the process of innovating around constraints. However, how innovating around constraints leads to profitable (value creation) businesses and local economic development impact (value capture) is still unclear. Early frugal innovation literature assumed that a reduction in cost would be a means to reach low income consumers. Yet, many companies in emerging markets are not reaching their intended low income customer group. Most early frugal innovation literature was conceptual and case study based with most case studies being from India and Asia. Additionally, frugal innovation literature focused more on the design process and less on the consumer and what drives decision making of frugal innovations.