Daedalus 141:3 (Summer 2012) - Science in the 21st Century

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Lazard, Gilbert. Lim, Dongsik. Squartini, Mario. Berro, Ane. Rozin, P, and Lila R Gleitman. Toward a Psychology of Reading. Gleitman, Lila R, and Paul Rozin. Henderson, Brent. Grimm, Scott, and Louise McNally. Poppels, Till, and Andrew Kehler. Kitagawa, Chisato.

Levshina, Natalia. Seres, Daria, and M. Teresa Espinal. Geurts, Bart. Presuppositions and Pronouns. Oxford University Press. McCready, Eric. Reliability in Pragmatics. First edition.

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Oxford Studies in Semantics and Pragmatics 4. Oxford: Oxford University Press. Rooryck, Johan. Grammatical Evidentiality in French and Italian. Kaufmann, Magdalena, and Stefan Kaufmann. Axel-Tober, Katrin, and Remus Gergel. Nuyts, Jan, and Johan Van der Auwera. The Oxford Handbook of Modality and Mood. Bianchi, Valentina. Consequences of Antisymmetry: Headed Relative Clauses.

Studies in Generative Grammar Collins, Chris. When the meaning was too blurred, we sorted the article out. We coded expressions of similar attributes, characteristics, or description by using attribute categories. We conducted inductive coding, meaning we developed codes progressively during data collection Miles et al.

Table 3 in the Appendix provides a more detailed overview. To assure that the data are interpretable in a similar way, we checked for inter-rater reliability. The nine attribute categories created in the first-cycle coding were used for the questionnaires of the interviews with the 45 managers and researchers.

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After data cleaning, we included answers of 34 interviewees into our analysis. Of these, 27 interviewees were managers from companies located in Germany or with subsidiaries there. The companies were from all branches and operated globally: 24 companies operated in Europe, 20 in Asia, 19 in North America, 17 in South America, 17 in Africa, 17 in the Commonwealth of Independent States, 16 in the Middle East, and 16 in Australia and Oceania.

Of the interviewees, 22 were managers of larger multinational companies with more than employees and annual turnover of at least million euro. Interviewees were asked which attributes apply to frugal innovation.

Further attributes identified in the literature review are also strongly associated with frugal innovation. The results are summarised in Fig. Most articles discussed in the literature review focus only on some attributes see Table 3 in the Appendix , whereas the interviewees confirmed almost all attribute categories we had identified in the literature review. We sought to identify primary categories on the basis of the attribute categories. The primary categories cost reduction, core functionality, and performance level could subsume the attribute categories see Fig.

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To go into detail: we identified nine attribute categories. The findings indicate that the discourse about frugal innovation mostly occur within the three main categories cost reduction, functionality, and performance level. Thus, most characteristics that are attributed to frugal innovation can be related to at least one of the three primary categories. Using the three categories, we defined criteria for frugal innovation. Thus, the second criterion for frugal innovation is concentration on core functionalities; we will define it in detail.

The third primary category is performance level. We could subsume many attributes describing frugal innovation into this category. At the same time, frugal innovation must meet very specific needs often not addressed by mature-market products Sehgal et al. Therefore, our third criterion for frugal innovation is optimised performance level ; we will define it in detail. What all frugal innovations have in common is that they meet all three criteria simultaneously see Fig. However, how the three criteria we defined manifest in real products and services strongly depends on the user environment and context.

For instance, while criterion 2, concentration on core functionalities, is valid for emerging markets and developed markets, the core functionalities will differ depending on the context.

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The three criteria can also be relevant for other innovation types. Cost innovation also seeks significant cost reduction Williamson , and other innovation types also seek core functionality and simplicity Flatters and Willmott The difference between frugal innovation and other innovation types is that frugal innovation must meet all of the three criteria at the same time.

Criterion 1 for frugal innovation is substantial cost reduction. Frugal innovation is characterised by a much lower price or significantly lower costs compared to conventional products and services. Almost every definition or description of frugal innovation in the literature emphasises this aspect, as we have seen in both the literature review and the interview results.

In the literature, it is not explicitly mentioned whether or not lower costs must always be from a customer perspective or whether or not an innovation can be frugal when there is a cost reduction only from a manufacturer or service provider perspective. By interpreting the findings, it becomes clear that it must always be from a customer perspective. A cost reduction that relates only to a manufacturer or service provider is insufficient, because it is not in line with most terms that characterise frugal innovation. Thus, the criterion substantial cost reduction must always be met from a customer perspective.

This already includes the perspective of the manufacturer or service provider. Few articles emphasise that frugal innovation seeks to reduce the total cost of ownership Barclay ; Tiwari and Herstatt For Ojha , this is at least valid for the Indian market Ojha The criterion substantial cost reduction is in line with this perception and encompasses both lower cost or purchase price and reduced total cost of ownership. At least one of the two aspects must be met. It is difficult to specify the extent of the cost reduction in frugal innovation. This question is not sufficiently answered in the literature.

It is hard to determine a specific threshold value for the criterion substantial cost reduction, since there are no representative samples. Rao compared the prices of 13 frugal innovations with ordinary products and services, mainly based on Internet searches. Concerning criterion 1, frugal innovations have a significantly lower purchase price or lower total cost of ownership from a customer perspective one third or more, with prices and costs compared to current solutions available on the market or, if no solution exists yet, with the assumed costs of making them available to the market, for instance by importing current solutions.

Criterion 2 for frugal innovation is concentration on core functionalities. Thus, the meaning of frugal innovation implies a focus on the core functionalities with the highest customer benefits, and it directly targets user requirements, as we will discuss in some detail: Wooldridge , p. The criterion concentration on core functionalities is not only a way to reduce costs. Concentrating on core functionalities can also have the purpose of making a product or service easy to use Andel ; Wooldridge , of saving resources Barclay ; Rao ; Tiwari and Herstatt , of having a lower impact on the environment Basu et al.

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Thus, the criterion concentration on core functionalities encompasses all the aforementioned characterisations and is a discrete criterion. In short, frugal innovations must concentrate on core functionalities compared to current solutions available in the market. Criterion 3, optimised performance level, is particularly important if one is to capture the full meaning of frugal innovation. It is not sufficient to focus only on core functionalities.

There must also be a serious examination of which levels of performance and quality are in fact required. Here, performance has a very broad meaning, covering the performance of all functionalities and engineering characteristics, such as speed, power, durability, and accuracy see Fig. The relevant engineering characteristics for which the performance level must be determined vary with the context. For instance, a frugal car has different engineering characteristics to a frugal ultrasound machine.

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  6. Other innovation types also require serious examination of the performance level, not only frugal innovations. Which performance level should be aimed for often receives insufficient attention. This implies that the right level of performance and quality has to be achieved. Soni and Krishnan , p. Further, Tiwari and Herstatt , p.