Frugal Digital Innovation: Leveraging the Scale and Capabilities of Platform Ecosystems

Abstract

Digital platforms are changing the nature of business across the world. Firms orchestrate digital innovations and break traditional business boundaries through participation in ecosystems enabled by digital platforms. This chapter focuses on a specific type of ecosystem called a frugal ecosystem. A frugal ecosystem is an entrepreneurial ecosystem usually found in the developing world and is highly constrained by resources, poor infrastructure, and scarcity. Therefore, firms focus on low-cost, sustainable, and social innovation to succeed. Using a case study approach, the chapter provides insights from two frugal digital platform ecosystems in India: 1) the JobMatch platform that is used to orchestrate informal, low-skilled job seekers, connecting them with potential employers; 2) the IGG platform that orchestrates a community of waste management workers to integrate them into the recycling ecosystem of the city. The chapter extends the discussion on digital platform ecosystems in a frugal context and brings new insights. It also leverages literature on digital and spatial affordances to interrelate constraints, institutional voids, and frugal innovation. The novelty of the findings will guide future research in this area.