Frugal Innovation in Manufacturing SMEs : Evidence from Pakistan

Abstract

The thesis examined to explore frugal innovation in the manufacturing business and energy challenges in small and medium enterprises. As the global economic environment is changing, there is pressure for sustainability and resource constraints, such that traditional capital intensive models of innovation are frequently not available to SMEs. Another substitute to this is frugal innovation or the ability to come up with low cost, sustainable, and resource-saving innovations. This study, based on a qualitative multiple-case study of five manufacturing SMEs, concludes that energy scarcity is a major contributor to frugal innovation, and that the firms have to implement strategies like low-cost hybrid power systems, rescheduling of operations and inventive bricolage. The conclusions reached in this thesis are that frugal innovation is not only a survival strategy but a strategic position that helps to become more competitive and stable in the long term. It provides practical recommendations to SMEs, policymakers and institutions so that an ecosystem that favors frugal and sustainable manufacturing can be created, which also fulfils the Sustainable Development Goal 7 (Affordable and Clean Energy) and 9 (Industry, Innovation, and Infrastructure).