How SME's Can Create & Capture Value In Emerging Markets On A Shoestring Budget
Monday, 14 November 2022, 13:19 IST
There is no doubt emergence of digital technologies & innovation has bought revolution from large to small sized industries. Digitization refers to the procedures that industries use to conceptualize the latest innovation, ideas and the products and make the process go advance in a novel way. Working in an innovation which is called as a planned modification in the organization's actions to improve the growth & performance. To respond to the challenging environment, business organizations pay attention to frugal innovation and the Internet of things. When it comes to large scale industries, there is no doubt they have a large number of employees a good budget to spend on technologies they need. But what about small and medium sized businesses? On a shoestring budget, how can SME'S CAN create, capture, as well as compete in the emerging markets? The answer is via implementing frugal innovation into their business models.
Frugal innovation has changed the way businesses operate, shifting from traditional to more innovative methods, and such transformation of business operational activities is entirely reliant on advanced digital technologies, including the IoT mechanism. Industry 4.0 is the most recent phase of the industrial revolution, with a strong emphasis on automation, realtime data, connectivity, and machine learning. Industry 4.0 refers to the digital transformation of organizations to digital structures that emphasize digital technology in order to complete the new level of innovation required in the modern era through inter connectivity via IoT and digital platforms. `Frugal Innovations has completely altered the manner and pattern of the SME's operations'.
How Does Industry 4.0 benefits SME's?
Furthermore, as the latest wave of digitization improved, customer needs and trade and industry requirements changed. The primary goal of Industry 4.0 is to improve the overall effectiveness and competence of organizations. Because it provides new means and patterns for organizational control and growth for SMEs, Industry 4.0 contains various technologies that facilitate digital transformation of the production, manufacturing-, and value creation related activities of SMEs. Transformation entails altering the overall strategy, which is a significant decision to make. Because of its automated and digital nature, Industry 4.0 is becoming a growing challenge for businesses.
Major Drivers of Change SME's Require to advance the Existing Processes
Frugal innovation requires major changes in the existing processes of small to med sized business organizations. Existing processes that most organizations' attempts to implement new processes and programs often fail due to insufficient organizational readiness for those changes. Now what is Organizational readiness? it is basically a ability of an organization to accept, adapt and implement required change. With higher organizational readiness, organizational members are more inclined to initiate change, put in their best efforts, and demonstrate cooperative behavior and attitudes, which overall results in a more successful and effective implementation of frugal innovation. Members of organizations with higher readiness perceive that they have sufficient resources that will contribute to the proper Sustainability.
The Key challenge with small & med-sized business has been their inability to scale. Limiting their potential impact, an ecosystem approach linking innovative finance, partnerships & business support is required. Frugal innovations are not just about limiting the resources yet making innovations worldwide in a sustainable manner, its great potential also lies in business model innovation. Frugal innovations in services can include deep specialization in a niche segment of a huge market, tiered pricing systems and efficient use of human capital. These innovations respond not only to a lack of skilled human capital, but to an institutional void. For example, Unilever's small, affordable detergent packets are priced at a more palatable level for the low-income populations in India and Africa. And Aravind Eye Care's approach to performing cataract surgeries at large scale without compromising on quality highlights how process innovation can ensure inclusivity and service delivery in a sustainable manner.
Implementation of Low-Cost Solutions in Emerging Markets
Today many businesses, both startups and established corporations, have begun to develop cost-effective, market-based solutions that include product and business model innovations in order to meet the unmet needs of billions. For example, Dr. P.K. Sethi's Jaipur Foot, also known as the Jaipur Leg, is a rubber-based prosthetic leg for people with below-knee amputations in India. Dr. Sethi was awarded the Magsaysay Award for Community Leadership in 1981 and the Padma Shri by the Indian government the same year for his invention, and another startup called MittiCool was founded by a traditional clay craftsman, Mansukhbhai Prajapati, who literally turned the soil into gold. He harnessed the cooling properties of clay and created a low-cost, biodegradable refrigerator made out of clay, Mitticool. It became an instant hit in his village, and since then, there is no looking back. His factory is producing other kitchenware out of clay. This Village Entrepreneur has been recognized and awarded by national and international organizations. And this how SME's can implement low cost solutions into their strategies and come out to be a behemoth in the emerging market.
Final Thoughts
Entrepreneurs' innovative, cost-effective solutions can help address this issue, leading to a more equitable future. However, an ecosystem approach is required to achieve this goal, with integrated support from a variety of players ranging from investors and donors to corporations, mentors, and service providers. With this assistance, small to med sized business will be better able to market, scale, and reach vulnerable communities.
Frugal innovation has changed the way businesses operate, shifting from traditional to more innovative methods, and such transformation of business operational activities is entirely reliant on advanced digital technologies, including the IoT mechanism. Industry 4.0 is the most recent phase of the industrial revolution, with a strong emphasis on automation, realtime data, connectivity, and machine learning. Industry 4.0 refers to the digital transformation of organizations to digital structures that emphasize digital technology in order to complete the new level of innovation required in the modern era through inter connectivity via IoT and digital platforms. `Frugal Innovations has completely altered the manner and pattern of the SME's operations'.
Frugal innovation has changed the way businesses operate, shifting from traditional to more innovative methods, and such transformation of business operational activities is entirely reliant on advanced digital technologies
How Does Industry 4.0 benefits SME's?
Furthermore, as the latest wave of digitization improved, customer needs and trade and industry requirements changed. The primary goal of Industry 4.0 is to improve the overall effectiveness and competence of organizations. Because it provides new means and patterns for organizational control and growth for SMEs, Industry 4.0 contains various technologies that facilitate digital transformation of the production, manufacturing-, and value creation related activities of SMEs. Transformation entails altering the overall strategy, which is a significant decision to make. Because of its automated and digital nature, Industry 4.0 is becoming a growing challenge for businesses.
Major Drivers of Change SME's Require to advance the Existing Processes
Frugal innovation requires major changes in the existing processes of small to med sized business organizations. Existing processes that most organizations' attempts to implement new processes and programs often fail due to insufficient organizational readiness for those changes. Now what is Organizational readiness? it is basically a ability of an organization to accept, adapt and implement required change. With higher organizational readiness, organizational members are more inclined to initiate change, put in their best efforts, and demonstrate cooperative behavior and attitudes, which overall results in a more successful and effective implementation of frugal innovation. Members of organizations with higher readiness perceive that they have sufficient resources that will contribute to the proper Sustainability.
The Key challenge with small & med-sized business has been their inability to scale. Limiting their potential impact, an ecosystem approach linking innovative finance, partnerships & business support is required. Frugal innovations are not just about limiting the resources yet making innovations worldwide in a sustainable manner, its great potential also lies in business model innovation. Frugal innovations in services can include deep specialization in a niche segment of a huge market, tiered pricing systems and efficient use of human capital. These innovations respond not only to a lack of skilled human capital, but to an institutional void. For example, Unilever's small, affordable detergent packets are priced at a more palatable level for the low-income populations in India and Africa. And Aravind Eye Care's approach to performing cataract surgeries at large scale without compromising on quality highlights how process innovation can ensure inclusivity and service delivery in a sustainable manner.
Implementation of Low-Cost Solutions in Emerging Markets
Today many businesses, both startups and established corporations, have begun to develop cost-effective, market-based solutions that include product and business model innovations in order to meet the unmet needs of billions. For example, Dr. P.K. Sethi's Jaipur Foot, also known as the Jaipur Leg, is a rubber-based prosthetic leg for people with below-knee amputations in India. Dr. Sethi was awarded the Magsaysay Award for Community Leadership in 1981 and the Padma Shri by the Indian government the same year for his invention, and another startup called MittiCool was founded by a traditional clay craftsman, Mansukhbhai Prajapati, who literally turned the soil into gold. He harnessed the cooling properties of clay and created a low-cost, biodegradable refrigerator made out of clay, Mitticool. It became an instant hit in his village, and since then, there is no looking back. His factory is producing other kitchenware out of clay. This Village Entrepreneur has been recognized and awarded by national and international organizations. And this how SME's can implement low cost solutions into their strategies and come out to be a behemoth in the emerging market.
Final Thoughts
Entrepreneurs' innovative, cost-effective solutions can help address this issue, leading to a more equitable future. However, an ecosystem approach is required to achieve this goal, with integrated support from a variety of players ranging from investors and donors to corporations, mentors, and service providers. With this assistance, small to med sized business will be better able to market, scale, and reach vulnerable communities.
