India’s Frugal Dynamism

India’s sliding economy has inspired gloom and doom far and wide, but increasingly bearish sentiment is misplaced. India still offers hope, but, to understand why, you have to leave macroeconomic indicators aside and go micro.

NEW DELHI – India’s sliding economy has inspired gloom and doom far and wide, but increasingly bearish sentiment is misplaced. India still offers hope, but, to understand why, you have to leave macroeconomic indicators aside and go micro. To take one example: Google the phrase “frugal innovation,” and the first 20 search results all relate to India.

Indian companies have long recognized the opportunities in meeting previously overlooked demand at the “bottom of the pyramid.” Shampoo sachets originated in India more than two decades ago, creating a market for a product that the poor had never before been able to afford. Indians without the space or money to buy a whole bottle of shampoo for 100 rupees could spend five for a sachet that they’d use once or twice.

But India’s leadership in “frugal innovation” goes beyond downsizing: it involves starting with the needs of poor consumers – itself a novel term (who knew the poor could be consumers?) – and working backwards. Instead of complicating or refining their products, Indian innovators strip them down to their bare essentials, making them affordable, accessible, durable, and effective.

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