Will frugal innovation challenge the west

Melanie Howard
Future Foundation

Scaled-down products for poorer consumers in BRIC countries could pose a threat to developed markets, says Melanie Howard

WITH HINDSIGHT it seems inevitable that the developed world's innovation record and thus its ability to stay ahead would be challenged. But to date, it hasn't been the most obvious consequence of rising economic power in the BRIC countries. The model followed by most multinationals has largely been one of nurturing and satisfying a growing desire for Western brands and goods, fuelled by newly empowered consumers’ discovery of the exciting palette of self-expression conferred by disposable income and choice.

But the new markets may be coming back to bite the hand that fed them. Rapid consumer evolution is both a consequence of, and an engine for, increasing numbers of the educated, clued-up middle classes, working in the expanding service sectors to meet the demands of people just like them, literally creating a virtuous circle: 55% of Indians are now employed in the tertiary sector.