 Good afternoon, everyone. It's a great pleasure to be here. I grew up in India where I studied engineering as an undergraduate. I then went to the states and switched to business and got a PhD in marketing, and I've been an academic since. And throughout my academic career, I've studied innovation. In the first part of my career, I studied innovation in large Western companies because the understanding was that's where innovation happens. And then in about 2007 or so, I turned my attention to developing countries, emerging markets like India where I'd grown up. And when I went and talked to innovators in a country like India from the grassroots up, I was struck by how different they were from their Western counterparts. And they seemed different in three ways. First, their approach to innovation seemed very frugal. They were very good at taking costs out of the entire process and doing more with less, with limited resources. Second, their mindset was very flexible. They were very good at thinking laterally and improvising solutions. And if they had a plan, they would switch quickly to another plan and still another. And often, their solutions were designed to bring people who are outside the formal economy into the formal economy. Let me give you examples of what I'm talking about. Now, this is a bit of a caricature, but by way of contrast, this is what we might regard as innovation in a more affluent society. This is a fridge that will talk to you when you can talk back to via this tablet PC. And for that pleasure, you pay about $3,000. Now, I said it's a bit of a caricature, but there's an element of truth there. Often, Western companies will invest in innovation. They'll spend a lot. And often, they'll invest in technology for the sake of technology. And then they'll put that technology in their products to differentiate them and then charge the customer. Now, you might see that kind of thing in India as well, but you're more likely to see something like this. That's $3,000, that's about $30. It's a clay fridge. It uses the cooling properties of water that's stored in this reservoir to keep fruit and vegetables fresh for up to five days. This comes from someone in a village. I'll tell you more about him in a second. It's very frugal. It uses clay and water. The person's mindset is very flexible, very good at improvising. And his intention was inclusive. He wanted to develop a fridge for potentially millions of people like himself who'd like to have a fridge but cannot afford one and even if they can afford one may not have access to electricity. Here's another example. This is an incubator from a company like GE. It's a beautiful machine. It has all the bells and whistles, but you pay about $20,000 for it. Now, that puts it out of the reach of many people in countries like India who are often in rural settings where the health infrastructure is poor and the clinics cannot afford such machines. And even if people give them these machines, they may not be someone to maintain it and they may not be electricity. In a situation like that, something like this could be very powerful. So that's about $20,000, this is about $20. Now, it's not an incubator because for instance, it doesn't have an oxygen tent. It's a baby warmer, but it addresses a large part of the problem that these are designed to address. One of infant mortality, where if kids are born one or two weeks prematurely, they can't maintain their body temperature and in many cases will die. This helps mothers and midwives to avoid that situation. Interestingly, this was developed by four students at Stanford who took a course called Design for Extreme Affordability. And the objective of the course was to come up with a working prototype that was 100 the cost of the existing solution. Now, when I talk to people in India about these kinds of innovations and this frugal, flexible, inclusive approach, more often than not, they use this Hindi word jugard to describe this. So my co-authors and I then wrote a book which we call Jugard Innovation, where we defined it as the art of overcoming harsh constraints by improvising an effective, a good enough solution. It's not a perfect solution, a good enough solution using limited resources. And when we were researching this book and blogging about it, people from other parts of the world wrote to us to say, you know, we have something similar in our country. People from Brazil told us there were two different words to describe something similar. And it wasn't just emerging countries, also people in the West who said, you know, we have approaches like this in our country. So in the book, we looked at lots of examples and we tried to extract some principles that we thought were driving this kind of innovation and these innovators. Here they are. First, do more with less. Find ways to overcome adversity by seeking opportunity. Keep your solution simple. Often that helps to reduce costs but also make it easy for people to use and maintain. Think and act flexibly. Think if you can't climb the mountain, think of a way around it. Include the margin. Include marginal people, not only as consumers but also as part of the solution. And I'll give you examples in a second. And finally, all these innovators were deeply passionate about what they were doing and really wanted to make a difference. And this was important because often what they were trying to do was really difficult and needed that kind of commitment and passion. Let me introduce you to some of the people. This is Mansukh Bhai. He's the person behind the clay fridge. He comes from a village in the Indian state of Gujarat. He has a high school education and he comes from a family of potters. And in 2001, his state suffered a very serious earthquake and a lot of people lost their possessions including the clay pots in which they traditionally store water. And one morning he opened the newspaper and he saw a picture of someone's clay pot that was broken and the caption read, poor man's fridge broken. And from that, he actually got the idea to make this fridge. And he's gone on to do other things like come up with nonstick frying pans made of clay and also water filters made with clay. Here's another example of someone we cover in the book. This is a different sort of entrepreneur in India. His name is Dr. Mohan. He comes from the Indian city of Chennai in the south. Diabetes unfortunately is a big problem in India and people in the cities suffer from it. But they can go to his clinic and they can often afford his services. So he has a very successful private practice in Chennai. But he's also aware that diabetes is a problem in the Indian countryside at just a few kilometers outside Chennai and into the hinterland. And he knows that people there often can't do very much about their diabetes. They will not go to the city. It's costly and it takes time. But equally, his doctors are not going to go to the village. So his solution is this mobile van, which you see here. He worked with the World Diabetes Foundation that gave him this van and the equipment within it. He worked with the Indian Space Research Organization that gave him the satellite dish. And what happens then is the van goes from village to village. People like this lady from the village step in. This machine takes an image of her eye which then broadcasts via satellite to the doctor who can see it on his computer screen in the city and make a diagnosis. And then this person who's a local health volunteer then follows up. He takes instructions from the doctor and makes sure that this lady follows up with diet and exercise and so forth. Here's a third example. This is Harish Hande from the Indian, South Indian city of Bangalore. And he set up Solar Electric Lighting Company, or CELCO, to sell solar lighting solutions to people who don't have access to the electricity grid. And the first problem he faced was a lot of the people he was trying to reach couldn't afford the upfront cost of buying the panels, the lights and the batteries. And he says the best lesson in life he learned was from a fruit cart vendor who told him that 300 rupees a month was too much, but 10 rupees a day was not. And he realized he had to work backwards from that solution to offer solar lighting solutions at 10 rupees a day, which is what that lady would pay for kerosene. So here's his solution. He selects people like this from the community. He trains them to manage the panels, the batteries and the lights. He then worked with the bank to give them loans because they aren't banked and cannot get loans themselves. He guarantees the loan for the first six months. This person with the loan sets up shop, buys the panels, the batteries and the lights, charges the batteries during the day, and in the evening rents them out for 10 rupees a pop. So the end consumer, like the fruit cart vendor, is better off. She gets a much better quality of light, the same cost as kerosene. But equally, this person now has a livelihood. After six months, he can withdraw his guarantee, this person is banked, and he's an entrepreneur in his own right. We see lots of large companies doing these kinds of things in India. GE has its largest R&D center outside the US in Bangalore. And in the R&D center, they've been developing medical devices like this for the rural market. They know that doctors often have to go from the city to the countryside. So if they're going to sell ECG machines for the rural market, the ECG machines cannot look like that. They have to look like this. They have to fit in a doctor's bag. They have to be highly affordable and they have to run on batteries. So that's what they came up with. And to develop it, they didn't follow their usual approach. We would have been to do everything in-house and own the IP. Instead, they followed their competitors and use this kind of jugart approach. They said, well, we need a printer. They looked around and said, well, bus ticket printers will do the job and we can even use the paper. It's cheaper. We need a keypad. Well, telephones have keypads so we can use that component. So they used off-the-shelf components, cut and paste them, applied a quality control standard and had a faster, better, cheaper product which was successful in India, adapted for China, and now it's selling in the West as well. Nokia did this for years in their heyday. They had something like 60% of market share in markets like India on the back of innovations like this where they actually send Nokia employees in the late 90s, for instance, to live with people in urban slums like Dharavi in Mumbai. And they noticed that even though cell phones were expensive, people were buying them and it was a prized possession so they were wrapping them in plastic to protect them from dust and grime. And they noticed that people were also using the light in the phone to see their way in the dark. So they incorporated those specifications, those features, into this really robust, affordable phone and it became a huge seller. So much so, I believe there are now more cell phones in the world than toothbrushes which is a bit alarming at one level but at another is very empowering because now you can offer services on the back of this platform to people like these people here in Kenya. This is a mobile payment service called M-Pesa where a lady like this can not only use a basic Nokia type phone to talk to Hassan who may have left the village to go and work in Nairobi but they can use that same phone to send and receive money. So he can send money to her which she can cash in the local corner shop. And this is a killer application in a country with a lot of migrant labor. So much so, in since 2006 there's something like 20 million people in Kenya who use the service and because they're now empowered, many of them are unbanked, you can sell other things to them like saving solutions or even solar lighting kits. And if you remember Harish Hande's problem of 300 rupees a month is too much, 100 rupees a day is not, this solves that problem very elegantly because a lot of people in the informal economy can now buy this kit and pay off the installment in micro payments using M-Pesa. It helps them, but it also makes it easy for M-Copa to actually take these payments from people who are dispersed across the country. Now we wrote this book about emerging markets and frugal innovation there in 2012. And since then we've discovered there's a lot of interest in frugal innovation in the West for the West. Now this is partly because particularly since the financial crisis, consumers have become very value conscious in the West. This is from a PWC survey that's found since the financial crisis when about 50% of people in the West answered yes to these questions. Now something like 67% answer yes to these questions. So more people are value conscious in the West. But they're equally values conscious. This survey by Nielsen suggests that people are concerned about the environment and social problems and they would rather work for socially responsible companies. And so as a result I think we're seeing a big change in how the West is constructed economically. We're seeing some consumers who are more proactive. They're not simply passive recipients of products and services from companies, but they're actively involved in the economic process, driving movements such as the sharing economy and the maker movement. The sharing economy is of course where consumers can directly trade with each other spare assets that they have such as a room in their home. And that sector is expected to grow exponentially and become as big as the traditional rental sector by 2025. The poster child is Airbnb and this is Brian Chesky pointing out the difference between them and say Marriott, which is one of being asset light. Marriott would add 30,000 rooms in the whole year. They would do that in two weeks. And so they can scale very fast. This is another sharing economy poster child. This is blah, blah car, which allows people who are commuting from say Antwerp to Brussels and have spare capacity in their car to share those seats with someone else. Blah, blah car now transports in a short time more people than euros start as in Western Europe. Now the maker movement. This is where people, ordinary people are increasingly empowered to do more with less. This is a group of students who graduated from Northwestern in Chicago. They call themselves Design for America. And they said to solve problems you don't have to go to Asia or Africa. There are plenty in the American backyard such as this problem of hospital acquired infections which kills something like 100,000 people in the US every year. What can we do about this? So they said, okay let's go to a local Chicago hospital. They talked to doctors and nurses. They observed them. They realized very quickly these people have every intention of being hygienic but there are many moments in the day when they cannot go to the wall unit to wash their hands or dispense a gel. So they went back to their studio which has basic equipment, some computing equipment and a 3D printer. And they asked themselves, what would a kid do? Well a kid would probably just wipe his hands on his trousers. Okay, well can we take that wall unit and have it clip on to the doctor's and nurses' scrubs? And what would it look like? So they came up with this, they did a prototype with that 3D printer and it looked like this and not only does this dispense a gel but it also sends a signal to a wall unit that records the data every time you do that. So at the end of the day the doctor or nurse can upload this data to their screen and see how they've performed. Now they did the whole thing, the whole process with basic resources. They got the idea through observation and brainstorming. They developed the prototype in their little studio with the 3D printer. They outsourced the manufacturing. They've crowdfunded the financing. They sell it on Amazon and they do their marketing without a budget using YouTube, they've done TED Talks and social media. I think this is something we're gonna see more of. My own student in Cambridge, Evan Upton came up with this $30 computer he calls the Raspberry Pi. He and his colleagues were worried about the fact that fewer people were applying to study computer science at Cambridge and the ones who did hadn't opened a computer and tinkered with it and hadn't done coding. So they said, what can we do to solve this problem? What if we created a computer so cheap we could give one to every school kid in the UK and even if they broke it wouldn't be a big deal. They thought they'd sell a few thousand units that sold several million, not just to kids but often their parents particularly their dads who are using these frugal devices to develop others. Another student of mine has taken the Raspberry Pi, clothed it, called it Co-Learner and he has loaded it with the Khan Academy which is the entire school curriculum in the US available on YouTube for free and his idea is this will be very useful in countries like India where often teachers don't show up to the classroom and students don't have access to the internet or even computers but often have a TV screen. So they might be able to access the Khan Academy through a TV screen and teach themselves. People have very sophisticated computers they carry around in their pockets. This is a group called Cell Scope at UC Berkeley who are developing a whole range of medical devices that fit into the audio jack of a cell phone. This is an otoscope which a mother can use to take high resolution pictures of the inner year and then send it to a specialist. And you see a whole range of these devices are a fraction of the cost of the standalone dedicated equipment. Increasingly we are seeing things like this empowering people. This is a $179 3D printer funded on Kickstarter but even if you can't afford that you can go to spaces where you can tinker such as tech shop or fab labs or maker spaces where for a monthly fee you get access to 3D printers, laser cutters and importantly a community of people who are like-minded and trying to solve problems. An example of what came out of tech shop is this thing I told you about earlier those four students from Stanford they had to come up with a working prototype so they went to the neighboring tech shop and they knew that their solution would need a blanket where the mother could hold the baby but they needed something more than that something that would keep temperature constant and they didn't know how they were gonna do that and somebody there asked them and he said that he'd worked at NASA and that at NASA they use phase change materials to do that so they didn't know what that was he told them about it and so they have a pad which has that phase change material which can be heated using electricity or hot water if you don't have electricity. Now they become celebrities this is Jane Chen with Obama and Obama has been a big supporter of this movement this maker movement he hosted a maker fair in the White House and this is what he had to say today's do it yourself is tomorrow's made in America. Now these maker fairs are fascinating I went to one in Rome last year that was the European edition and there were all kinds of things there there was a whole display by students from the European Institute of Design of smart lighting solutions and one of them had two sensors in a flowering pot which were connected by an Arduino computer which is like a Raspberry Pi to some lights and if the soil was dry the green light went off so you knew you had to water it and if it was red you didn't water it and I thought this is a cute application with no commercial value until I discovered this which is a product that's come out of California partly to deal with the drought in California it's a sensor you stick it into the ground it has a whole bunch of sensors that take readings of things nutrients in the soil and moisture and so on send it to the farmer's smartphone where an app helps him to visualize how things are in his field and manage his resources prudently water fertilizer, et cetera. This is an example that's come out of the fab lab in Barcelona where they've developed a smart citizen kit and that's the kit which they made in the fab lab they sell it to people in Barcelona on the internet and people install it in their homes it helps them to track all these things and then get feedback on how, for instance, noisy their apartment is relative to other parts of Barcelona or how polluted it is and they can be more engaged in the process of speaking to their council. Let me just end with some thoughts on how large companies can do frugal innovation. My co-authors wrote this book earlier this year to reflect on what this means for large organizations and we have a simple definition in the book frugal innovation is a ratio of value to resources value to customers, shareholders or society and these resources could be financial, natural or time and we did the same thing we looked at lots of examples and we extracted some principles I'm not going to go through all of them I'll just give you some examples and let's take the one about create sustainable solutions this is Target, it's a French flooring company and they've given themselves the target of being a completely circular enterprise to reduce and recycle and reuse everything all the materials in their products by 2020 and they recognize that would also mean moving from a model where they sell to people to a service model. I mentioned tech shops earlier this is, these are Ford employees Ford the Motor Company has a partnership with Tech Shop in Detroit for Ford employees to go and tinker with other people and they've noticed this has increased their morale but also increased their productivity. This is Beth Comstock of GE a 100 plus year old company of Behemoth with Sam Kaufman who's a 20-something CEO of this company startup in New York called Quirky so imagine this big company going to Quirky and saying can you help us with innovation? What Quirky does is it crowdsources innovations there's a platform that we can go on to and we can suggest ideas for home appliances that everybody else votes on and then Quirky selects the most popular ones to prototype and then to commercialize. So GE went and said can you help us with our air conditioning line? And it so happened that one of the people on the Quirky community had this idea for a smart air conditioner that allowed people to manage the air conditioner from their offices for instance on their way home using an app and so now it's been co-branded the solution by GE and Quirky. A final example of Barclays which have set up an accelerator in London where working with tech stars they select 10 promising FinTech startups that are housed there for 13 weeks. During this time mentors from the main bank help these startups to improve their idea. The startups gain a lot of insight into banking, the regulations, the customers but the mentors from the main bank are energized by these conversations and discover things they didn't know were possible with technology and at the end of the process Barclays can decide to incorporate them into the bank or merely to invest in them. So let me conclude by saying the challenge for large organizations often is to learn to do more with less, to be more agile and to include excluded groups. There are three ways they could do this. They can give employees time and space to experiment a bit like Ford is doing with Tech Shop. They can engage with agile entrepreneurs like Barclays is doing in their accelerators. They can create this emerging market mindset by going there in a way that GE is doing for instance. The challenge for small organizations almost the opposite. They have this in their DNA, this ability to do things faster, better, cheaper but they need to scale and often they can do that by partnering with large organizations but that itself is an art. So let me conclude by saying that I strongly believe that the world needs this kind of frugal, flexible and inclusive innovation and I believe that Western firms and organizations can gain by engaging their emerging market counterparts and that large and small firms can work together to improve lives everywhere. Thank you.