This innovation is not being driven directly by environmental concerns.

India, so far,
has done this out of compulsion. The combination of scarcity and aspiration was the
trigger, says Ramesh Mashelkar, one of Indias most eminent scientists and a board
member of the Tata Group.
But, although frugal innovation and green innovation arent the same thing, many of the
tools and techniques used to reduce cost and increase access also have positive
environmental benefits.
Lower prices, wider accessand environmental benefits
There are eye-catching examples of new products, services and business models that are
high quality, yet dramatically reduced in price. Think of the Tata Nano, a family car that
meets global safety and emissions standards, but starts at $2,000. Or the Vortex ATM
which is two thirds cheaper than conventional ATMs and has the lowest power
consumption in the world, up to 90 per cent less than alternatives. Whats more, it can
run on solar power and has sophisticated inbuilt fingerprint scanning which overcomes
the literacy barrier to accessing the formal banking system.
Here are three approaches being used by Indias frugal innovators which also offer
lessons and routes for green innovators elsewhere:
1. De-featuring
A deep understanding of user needs can help cut out anything unnecessary and,
therefore, reduce a products environmental footprint. GE developed a remarkable ECG
machine in their Bangalore lab: reducing the size of a 15lb machine to 3lb, making it
portable, cutting retail price from $10,000 to $1,500, and reducing running costs to the
patient. To do this, they stripped out everything not entirely necessary and used off-the-
shelf parts where possible: the printer is a modified version of the one used for bus
tickets all over India.
2. Systems thinking
Harish Hande has brought solar power to over 150,000 poor households by devising a
viable pay-as-you-go model. Customers either buy or rent solar lights with the help of a
loan. By partnering with banks and local entrepreneurs to create this ecosystem,
Handes company, SELCO, is providing clean, electric light well below the cost of
kerosene (the normal lighting fuel for millions of Indians) to people earning barely $50-
100 a month, and all without a rupee in subsidy. His genius is to think about energy as a
people-centred system, rather than as a problem to be fixed by new technology.
3. Cross subsidy
Many Indian frugal innovations use cross subsidy, where wealthier individuals pay for
more the same core service, and the profit is used to support those that cant pay, or
cant pay much. Aravind eyecare, providing cataract operations for hundreds of
thousands of Indians a year, 1298 Ambulances, providing Mumbais best emergency
response service, and Narayana Hrudayalaya, providing world class cardiac care, all use
this technique. Though perhaps this explicit approach would not be politically
acceptable here in the UK.
A different mindset, not different technology
While UK entrepreneurs can adapt and adopt these tools and others, I believe frugal
innovation is ultimately about a mindset. A mindset that doesnt just see the challenges
we face as problems to be solved by better technology, itself yielded through more
investment. But instead a mindset that focuses on doing more with less, and using
creativity to achieve the same quality of products and services with fewer inputs.