Developing world designs
Social enterprises harnessing ‘frugal innovation’ are developing public services inspired directly by the needs of emerging economies
Stephen Duckworth is Director of the Serco Institute. This article first appeared in The Guardian. Image courtesy of Empathy Learning Systems, as featured in the Serco Institute report discussed below.
Over the past 60 years, innovation and improvements in India’s public services have frequently emerged in the absence of state intervention or involvement. Social enterprises have stepped in to address challenges where the government has failed. As a consequence, radical new perspectives have developed that might not have emerged had governments imposed top-down initiatives adopted from the West.
‘Frugal innovation’ is the idiom applied to this sweeping revolution in public service design and delivery. The term is used in India and other developing economies to describe innovation that minimises costs by creating frugal solutions to deliver improved (or even previously non-existent) public services. Frugal innovation has given more people access to a wider range of services. One, now famous, example is the Narayana Heart Hospital in Bangalore, which delivers high volumes of cardiac bypass surgery with lower mortality rates than the top clinic in the US at a fraction of the cost, thus opening access to swathes of Indian society who would otherwise have been excluded. The 1298 ambulance service in Mumbai was set up as a social enterprise that allows customers to pay according to their means, and is now contracting with state governments to widen its reach.
Grass-roots solutions in challenging service environments
Although the social and economic challenges of India are of a different order to the fiscal crises currently faced in the developed world, the Serco Institute’s new report, Frugal innovation: learning from social entrepreneurs in India, provides insights into how solutions developed from the bottom up in some of the most challenging public service environments can better meet the needs of citizens. The Aravind Eye Care System was developed by a retired eye surgeon as an alternative healthcare model; his mission to prevent all avoidable blindness in India. Starting with just 11 beds in 1976, the system has expanded to 3,590, treating more than 300,000 patients a year. Another, more recent, example is the provision of electricity in remote villages via innovative micro power plants that convert a widely available waste product – rice husks – into energy. Husk Power Systems has established more than 50 plants since 2007 and aims to scale up to 2,014 by 2014. The aim is to train local engineers and build the capacity of local entrepreneurs to manage franchises through the support of their bespoke training institution, the Husk Power University.
The report demonstrates how 40 social enterprises in India have leveraged the freedoms that exist at local community levels to develop new solutions that have widened access to public services, unconstrained as they are by legacy systems and services. It challenges the notion that good value for money can be delivered through centralised, uniform solutions. Though many specific models may not be suitable for adoption by Western public service providers, the examples from India are illustrative of the underlying principles and practices that lead to innovation and drive it in the first place. The social entrepreneur’s journey to transform bright ideas into practical insights and commercialise innovations so as to create sustainable businesses is, nevertheless, arduous and pushes at the boundaries of dedication and plain hard work.
Liberating ‘the drive to succeed’
Western governments today seek to manage large public deficits while striving to serve the rising expectations of citizens. There is a buzz emanating from emerging economies that has caught the imagination of Western leaders in their bid to deliver growth in sluggish fiscal environments. In a keynote speech at the Conservative Party Conference in 2011, British Prime Minister David Cameron called for the same “drive to succeed” that is seen in Delhi, Shanghai or Lagos.
However, businessman Harjeet Johal, who has run large retail companies in both the UK and India, points out that the incentives to succeed in the different geographies are divergent: “David Cameron wants some ‘Delhi drive’. In his conference speech, he called for Britain to find its inner energy and to start a national fight back, with all the fire of those in the developing world. But having lived and run companies in India, I know that this fight is going to be a knock-out with us on the canvas, as we British lack the reason to be driven.”
The role of the state as a commissioner, enabler, regulator, partner and sponsor can make a significant contribution to the success of frugal innovation. Attitudes must be reformed at the same time as cumbersome procurement processes, allowing greater devolution of delivery to those providers who best understand the risks and can deliver higher performance in terms of wider social outcomes rather than narrow financial costs. Social enterprises in the UK already have a rich history of achievement, but to unleash the domestic entrepreneurial drive that can deliver otherwise unobtainable outcomes, the government needs to do more to strip away remaining obstacles and liberate the potential that lies within.
