Relevanz und Potenziale frugaler Innovationen für Österreich : Studie im Auftrag des Rates für Forschung und Technologieentwicklung, Österreich

This qualitative-explorative study set out to investigate potentials and relevance of frugal innovations, as enablers of “affordable excellence”, for Austria. Employing a multi-method approach combining literature review, case studies and expert interviews it sought to generate preliminary insights about the strategic imperative of frugal innovations for Austrian firms. The generated insights were analyzed with experts in a focus group to identify the resulting implications for Austria’s research and innovation system. The study discovered that some Austrian firms are already engaged in creating affordable products and services targeted at the developing economies. Yet others are utilizing frugal products and business models for the home market, where there is a growing trend in certain sections of the society for voluntary simplicity and more moderate lifestyles. Many users, especially senior citizens, feel overwhelmed by the (avoidable) hyper-complexity of technical solutions. They desire simpler and more robust products, and see the practice of planned obsolescence skeptically. Besides, the changing demographic structure is expected to enhance financial constraints in the society and affordable excellence will be increasingly crucial to ensure continued high standards of living, e.g. in healthcare. Furthermore, ecological considerations necessitate a significant reduction in the consumption of finite and depleting natural resources, globally. Engaging in frugal innovations, therefore, contributes positively to achieving the Sustainable Development Goals (SDGs). Austrian economy is competitive, knowledge-driven and R&D-intensive and actively engages in international trade. A large share of its exports, at present, is directed to other developed economies in Europe, especially Germany. It seems advisable that Austria attempts to secure a strong market position in the unsaturated and rapidly-growing markets in the emerging market economies, such as China and India, with high-quality and affordable products and services. Ensuring a sizeable market presence in such countries is likely to help Austrian firms in securing long-term global competitiveness. Nevertheless, for achieving this, Austrian firms will have to move beyond, what the Indian Minister Piyush Goyal is reported to have called the paradigm of “technology of exclusivity” to a paradigm that allows it to create “technology of inclusivity” by fully utilizing the benefits of cutting-edge research in fields as diverse as digitalization, biotechnology, nanotechnology etc. The study comes to the conclusion that the innovation policy in Austria should be recalibrated to support frugal innovation – going beyond an almost exclusively technology-focused paradigm to a more inclusive innovation-driven approach that may also encourage novel products and services on the basis of marketing and design innovations. High-tech solutions should be proactively encouraged to achieve affordable excellence in addressing global societal challenges. For this, there is a need to (a) build awareness about the imperative of frugality, (b) help firms to build frugal innovation capabilities, and (c) intensify research and innovation cooperation with emerging economies with “lead market” potential on account of their market size, technological prowess and access to open global innovation networks. Finally, regulatory standards and norms should be regularly updated to ensure continued appropriateness and avoid over-engineering that harms both business competitiveness and the environment.