Executive Briefings

Western Businesses Need More Jugaad Innovation - or Pioneer Spirit

A resilient mind-set can transform scarcity into opportunity by combining limited resources with inventiveness and a never-say-die attitude. This approach "” whether it is aimed at creating a product, service or business model "” is called jugaad innovation. Jugaad is a colloquial Hindi word that roughly translates as "an innovative fix for your business; an improvised solution born from ingenuity and cleverness."

It is based on six operating principles: seek opportunity in adversity, do more with less, think and act flexibly, keep everything about the business simple, tap the margins of society for employees and customers, and follow your heart. The extreme conditions that make jugaad innovation worthwhile have typically been more prevalent in emerging markets like India, China, and Brazil than in the United States or Europe. But in recent years, developed economies have begun to exhibit many of the same aspects of scarcity, diversity, unpredictability, and interconnectivity, making these principles relevant to companies around the world.

The jugaad spirit, also known as the "pioneer spirit," was once common in North America and Europe, as well "” at least until their economies matured. During the 20th Century, Western companies built up dedicated R&D departments aimed at institutionalizing and managing their innovation capabilities. This industrialization of the creative process led to a structured approach to innovation that spawned big budgets, standardized business processes, and controlled access to knowledge.

Most Western firms have assimilated the idea that an innovation system "” like any other industrial system "” will generate more output (inventions) if fed more input (resources). As a result, the structured innovation engine in most companies is capital intensive, requiring an abundant supply of financial and natural resources at a time when both are scarce.

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Keywords entrepreneurial spirit, innovative thinking, creative business planning

It is based on six operating principles: seek opportunity in adversity, do more with less, think and act flexibly, keep everything about the business simple, tap the margins of society for employees and customers, and follow your heart. The extreme conditions that make jugaad innovation worthwhile have typically been more prevalent in emerging markets like India, China, and Brazil than in the United States or Europe. But in recent years, developed economies have begun to exhibit many of the same aspects of scarcity, diversity, unpredictability, and interconnectivity, making these principles relevant to companies around the world.

The jugaad spirit, also known as the "pioneer spirit," was once common in North America and Europe, as well "” at least until their economies matured. During the 20th Century, Western companies built up dedicated R&D departments aimed at institutionalizing and managing their innovation capabilities. This industrialization of the creative process led to a structured approach to innovation that spawned big budgets, standardized business processes, and controlled access to knowledge.

Most Western firms have assimilated the idea that an innovation system "” like any other industrial system "” will generate more output (inventions) if fed more input (resources). As a result, the structured innovation engine in most companies is capital intensive, requiring an abundant supply of financial and natural resources at a time when both are scarce.

Read Full Article


Keywords entrepreneurial spirit, innovative thinking, creative business planning