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Jugaad as a Business Model



In the early days of my journey in Experimental Plasma Physics, a persistent problem was the non-availability of critical laboratory parts required to do these experiments because of strict import restrictions. We had to find ways to improvise and invent out-of-the-box solutions. For example, we devised vacuum RF couplers with Amphenol connectors embedded in an epoxy cast. High-voltage feed-throughs were made using outsized O-rings forming electrically floating vacuum flanges. Sinusoidal voltage bias on a Langmuir probe ramped it to create current-voltage characteristics. We learned to trigger vacuum spark gaps with Bostick plasma guns made from two wires embedded in a plastic stub. We learned that a piece of paper with pencil scratches would act as an overvolted surface discharge source to trigger a coaxial plasma gun. Finally, we even learned to create high-voltage pulse trains with nanosecond rise time by using a double-Blumlein pulse-forming line with discarded Coaxial cables and rotating spark gaps.

All these improvisations come under the general class of inventive problem-solving called Jugaad. A more formal name is frugal innovation. Rina Arya (1) defines Jugaad as a “ mentality or approach that seeks solutions in adversity, describing how the world is negotiated by improvisation and ingenuity. Jugaad is an Indian colloquial word meaning “assembled.” The word denotes innovative problem-solving techniques aimed at workable solutions.

The primary motivation for Jugaad is functionality. It involves the re-deployment of objects that were in the first place developed for an entirely different purpose. In this sense, jugaad is exaptation, a term used in evolutionary biology, where a trait or character fulfils a function not originally intended.

Innovation has moved to the large emerging economies of China, India and Brazil with a good portion of innovation being frugal, flexible and inclusive. In Brazil, for instance, there is a long history of jeitinho or gambiarra-inspired solutions in biofuels, automobiles, cosmetics and farming (2). African economies such as Kenya have developed a reputation for their entrepreneurs in micro-enterprises inspired by the JuaKali TV series that depicts the diversity of life, happiness, sadness, greed and betrayal. Similarly, South Africa is developing a reputation as a nation with expertise in developing and deploying mobile-based solutions in medical care. Emerging economies have a lot in common with India regarding scarcity of resources, a volatile environment and the exclusion of a large number of people from the formal economy. Considering the increasing scarcity of resources all over the world and the limited household and government financial resources, the relevance of frugal innovation can only grow. The emerging markets may pioneer the methods in showing how frugal innovation can be the leading principle of development and growth.

The Jugaad concept is not confined to products alone; it can be relevant to services in a poor economy where the cost associated with bridging the so-called “last mile” problem is excessive. A classic example is the Dabbawallahs of Mumbai, who deliver hot lunches to 2 lakh office workers from their homes daily.

Delivery of financial products to rural Indians is another area. To set up a branch of a bank in every one of the six lakh villages would be an impossible task. Instead, they have set up partnerships with small players. Typical partners are the Kirana shops ubiquitous in Indian villages selling household articles and groceries. Financial service providers like Eko, who offer transactional services based on mobile phones act as a conduit between Kirana shops in villages and their banking counterparts in cities, thereby providing a key service to rural consumers who have family members in cities working as migrant labourers who send money home frequently. Eko allows you to turn every shop into a nonbanking financial institution. Customers who are without bank accounts, but want to transfer cash can do so at the shop. The shops can pay their utility bills and render other financial services. This is allowed by the new and liberal Reserve Bank legislation. Kirana shops can now act as “business correspondents” for Indian banks and these shops effectively become low-cost bank branches for major banks (2).

Businesses can have a Jugaad model. SELCO, set up by Harish Hande to provide solar lighting services to rural Indians who use kerosene lamps to light their homes because they have no electricity connection is an example. But solar panels and batteries are prohibitively expensive that even affluent Indians would not purchase them. A key insight came to Hande when he realised that his customers were daily wage earners comfortable with small daily payments. They could not pay a monthly charge for the solar power but could pay daily for the service. Hande found a way to supply solar power daily at prices comparable to that of kerosene. Hande provides training to a group of local people to charge and maintain solar panels and batteries. He collaborates with a bank, to extend financial support for these local entrepreneurs, who set up a shop where charged solar lanterns are rented to the villagers every evening. The local entrepreneur charges a rental for each lamp of less than Rs 20, which makes the solar option price competitive with kerosene. It meets all the checkpoints of frugal innovation. It consumes less resources and is sustainable when compared to burning kerosene. It is inclusive since it brings many people into accessing clean, solar energy.

Medical services could be rendered frugally as exemplified by the Chunampet Rural Diabetes Prevention Project, an innovative diabetes program in India initiated by Dr Mohan, a world-renowned diabetes specialist. Diabetes in India is a serious problem with more than 60 million people suffering from type 2 diabetes. Cases of undiagnosed diabetes are thought to be even more serious. even though 70 per cent of the Indian population lives in rural areas, medical attention is quite inadequate. Travelling to the city in search of medical care means loss of daily earnings in farm labour. A good fraction of the rural population lives below the poverty line, and this makes delivery of adequate medical care a challenge.

The Chunampet project overcame all these problems by employing medical vans refurbished to house basic diagnostic facilities and video-conferencing equipment connected by a satellite dish to a diabetes care centre in Chennai. The workforce was made up of trained technicians/optometrists along with unemployed youth put through a rigorous training programme. Skilled medical professionals remotely reviewed the screened satellite images of the foot and retinal scans, and endocrinologists produced care plans following video consultations. Local volunteers helped with the follow-through of the care plan. Care was provided either free of charge or was heavily subsidised (3).

The Chunampet project is an exemplar of the jugaad principles: The collaboration with Indian Space Research Organisation (ISRO) enabled free telecommunication in the interiors where both mobile and wireless services were unavailable — an example of flexibility in thought and action. The recruitment of local people into the workforce and skilled with highly focused training creates employment opportunities. It also allows some to become part of a volunteer workforce driven by intrinsic motivation and a shared purpose. A textbook example of a flexible service model which optimises the deployment of local resources to meet the aspirations of an underserved social fraction.

(1) Rina Arya, March 9th, 2020, Jugaad: A study in Indian ingenuity and improvisation, https://blogs.lse.ac.uk/southasia/2020/03/09/jugaad-a-study-in-indian-ingenuity-and-improvisation/

(2) Innovation and entrepreneurship in India: Understanding Jugaad, Jaideep Prabhu, Sanjay Jain, Asia Pacific Journal of Management, Volume 32 https://core.ac.uk/download/pdf/35279943.pdf

(3) Dawda P. Primary care — is ‘jugaad’ innovation a strategy to guide future direction? JHD 2016;1(3):2–5. https://doi.org/10.21853/JHD.2016.14

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