Frugal innovation for smart connected products: a case study of IoT-based smart farming by Vietnamese startups

Abstract

ABSTRACT Frugal innovation has been gaining increasing attention from scholars, practitioners, and policymakers over the past two decades. Frugal innovation refers to innovations that emerge in resource-constrained settings with scarcity of financial capital, technological capability, or human resources. The innovation output offers significantly lower prices compared to other market alternatives while still delivering an optimal performance level catered to the specific needs of the unserved or underserved customer groups. This research employs a qualitative research methodology, using thematic coding analysis techniques to investigate case studies of three Vietnamese startups that provide IoT-based (Internet of Things) smart farming solutions for Vietnamese farmers and farming businesses. The findings highlight three characteristics of frugal innovation in Vietnam’s agriculture industry of substantial cost reduction, focused functionality, and optimal performance level. The study also identifies various enablers and barriers during the deployment process of frugal innovation. In addition, the research emphasises the distinction in the means of achieving frugal innovation in the context of smart connected products, compared to products that are mainly comprised of hardware components (i.e. hardware-based products). The study has important theoretical and managerial implications for various stakeholders, aiming to accelerate the transformation process from traditional farming to smart farming in Vietnam.