Innovation - the street is also a real-world laboratory for the financial sector



The street is also a real-world laboratory for the financial sector


Deloitte: How can the concept of ‘jugaad’ impact the world of finance?

Navi Radjou:
Jugaad is practised today by millions of entrepreneurs in emerging markets such as India, Africa and Brazil that face huge complexity and severe resource constraints. These constraints, whether due to a lack of resources, complex regulations or insufficient infrastructure, create an atmosphere of adversity. Adversity is the mother of invention.

In this difficult environment, people are pushed to innovate just to survive. But they tend to innovate differently. Rather than relying on large research and development laboratories as we do in the West, people in India and Africa are using their innate ingenuity to create a pragmatic solution, a practice generally referred to as ‘Système D’ in France or ‘jugaad’ in India. Jugaad entrepreneurs live in close contact with their potential customers, directly in the streets. The street is a real-world laboratory where entrepreneurs identify needs and try to find solutions.

In India, the ‘jugaad vehicles’ often found in the countryside are makeshift vehicles assembled out of a carriage and an agricultural water pump reconditioned as an engine, for less than €1,000. They are very simple and do not exceed 60 km/h, but have the capacity to transport up to 20 people from villages to cities and operate in all weather conditions and terrain. As such, they meet very well the needs of the local rural population and at a very low cost.

Jugaad is therefore a frugal approach to innovation requiring few resources, as well as being agile in that the jugaad innovator needs to constantly adapt to rapidly evolving customer needs. It is also an inclusive approach for two reasons: first because it includes the final consumer in the co-creation of value and, second, it also includes economically marginalised segments of the population while generating reasonable profits, demonstrating that jugaad is a profitable business model.

Inspired by the frugal, flexible and inclusive mindset of jugaad innovators, some large corporations such as Orange have now provided innovative solutions that financial institutions would be inspired to follow. For example, Orange money or ‘M-pesa’ (introduced by Vodafone in Kenya) allows people to send and receive money as well as lend or donate money to friends and families, pay bills and provide access to dedicated services. This has revolutionised the lives of millions of people in Africa. Africa is going to teach us in the West how to offer financial solutions that are affordable and inclusive.

Discover the rest of the interview in the attached PDF.

PDF file - Size: 163KB

Performance issue 15 - September 2014

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.  

PDF file - Size: 5,50MB

Navi Radjou

Navi Radjou is a French citizen born in the former French territory of Pondicherry in India. Based now in Palo Alto, Silicon Valley, he is a strategy advisor on innovation and leadership, a best-selling book author, and a Fellow at Cambridge University’s Judge Business School. In the past, Navi has also occupied eminent positions such as vice-president at Forrester Research in Boston and San Francisco and as member of the World Economic Forum. Navi is a graduate of Ecole Centrale Paris.

Navi’s expertise covers business innovation, but he has devoted himself more specifically to frugal innovation—or Jugaad—that is practised by resourceful entrepreneurs in developing countries and has explored this field in his best-selling book ‘Jugaad Innovation’.

Today, Navi Radjou’s reputation has spread worldwide, through the many awards he has received (including the 2013 Thinkers50 Innovation Award), his participation in high-profile events and his interviews in top-tier newspapers.

Navi Radjou
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