TY - JOUR
T1 - Value capture and value creation
T2 - The role of information technology in business models for frugal innovations in Africa
AU - Howell, Rachel
AU - van Beers, Cees
AU - Doorn, Neelke
PY - 2017
Y1 - 2017
N2 - Bringing value to end consumers is one of the main challenges for businesses in emerging markets. This paper examines the role of information technology (IT) advancements in frugal innovation and in influencing new business models to bring frugal innovations within reach of the poor. A thorough review of theoretical concepts of business models and their applicability to the Bottom-of-the-Pyramid (BoP) literature and frugal innovation is given. IT has three characteristics that have influenced both business models and frugal innovation. First IT reduces transaction costs, sensor prices have decreased, and IT's externalities have increased the economic and social value from one innovation. By discussing the case of a high-technology low cost weather sensor system deployed in sub-Saharan Africa, this paper demonstrates how IT has introduced new frugal innovations, and influenced new business models. The success of the weather station diffusion has been due to the value of the weather data generated, the adaptive business model, and the co-creation approach throughout the station and business model design. IT has played a strong part in diffusing new innovations in Africa, but also has the potential to exclude certain groups. Future research should explore how IT and frugal innovation can lead to inclusion.
AB - Bringing value to end consumers is one of the main challenges for businesses in emerging markets. This paper examines the role of information technology (IT) advancements in frugal innovation and in influencing new business models to bring frugal innovations within reach of the poor. A thorough review of theoretical concepts of business models and their applicability to the Bottom-of-the-Pyramid (BoP) literature and frugal innovation is given. IT has three characteristics that have influenced both business models and frugal innovation. First IT reduces transaction costs, sensor prices have decreased, and IT's externalities have increased the economic and social value from one innovation. By discussing the case of a high-technology low cost weather sensor system deployed in sub-Saharan Africa, this paper demonstrates how IT has introduced new frugal innovations, and influenced new business models. The success of the weather station diffusion has been due to the value of the weather data generated, the adaptive business model, and the co-creation approach throughout the station and business model design. IT has played a strong part in diffusing new innovations in Africa, but also has the potential to exclude certain groups. Future research should explore how IT and frugal innovation can lead to inclusion.
KW - Bottom of the Pyramid
KW - Business models
KW - Frugal innovation
KW - Inclusive business
KW - Sub-Saharan Africa, information technology
UR - http://www.scopus.com/inward/record.url?scp=85033569666&partnerID=8YFLogxK
U2 - 10.1016/j.techfore.2017.09.030
DO - 10.1016/j.techfore.2017.09.030
M3 - Article
AN - SCOPUS:85033569666
SN - 0040-1625
SP - 1
EP - 13
JO - Technological Forecasting and Social Change
JF - Technological Forecasting and Social Change
ER -