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New Sources Of Growth: The Role Of Frugal Innovation And Transformational Leadership

Author

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  • Solikin M. Juhro

    (Bank Indonesia)

  • A . Farid Aulia

    (Bank Indonesia)

Abstract

This paper’s main thesis is that frugal innovation and transformational leadership offer additional sources of growth. Our main contribution is the proposal of what we refer to as the breakthrough possibility frontier (BPF) model, which integrates two aspects of leadership: innovation quality (frugal innovation) and leadership competency (transformational leadership). We test the BPF model on two groups of respondents, one group consisting of university students who had never been formal leaders and the other formal leaders who had office experience. The BPF analysis suggests that transformational leadership is a game changer, required for breakthroughs. Transformational leadership is key to encouraging innovation quality and leadership competency and, we argue, to facilitating new sources of growth. Our results imply the development of an integrated institutional framework for innovation. We believe that innovative leadership development programs that can be easily implemented and replicated in other regions are needed to develop transformational leadership competencies.

Suggested Citation

  • Solikin M. Juhro & A . Farid Aulia, 2019. "New Sources Of Growth: The Role Of Frugal Innovation And Transformational Leadership," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 22(3), pages 383-402, October.
    • Handle: RePEc:idn:journl:v:22:y:2019:i:3g:p:383-402
    DOI: https://doi.org/10.21098/bemp.v22i3.1195
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    References listed on IDEAS

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    1. Carol Corrado & Jonathan Haskel & Cecilia Jona-Lasinio & Massimiliano Iommi, 2012. "Intangible Capital and Growth in Advanced Economies: Measurement Methods and Comparative Results," Economics Program Working Papers 12-03, The Conference Board, Economics Program.
    2. Kock, Alexander & Gemünden, Hans Georg, 2016. "Antecedents to Decision-making Quality and Agility in Innovation Portfolio Management," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 85099, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Rakhshanda Khan, 2016. "How Frugal Innovation Promotes Social Sustainability," Sustainability, MDPI, vol. 8(10), pages 1-29, October.
    4. Gerard George & Anita M. McGahan & Jaideep Prabhu, 2012. "Innovation for Inclusive Growth: Towards a Theoretical Framework and a Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 49(4), pages 661-683, June.
    5. Christian Le Bas, 2016. "The importance and relevance of frugal innovation to developed markets: milestones towards the economics of frugal innovation," Journal of Innovation Economics, De Boeck Université, vol. 0(3), pages 3-8.
    6. Kaplinsky, Raphael, 2011. "Schumacher meets Schumpeter: Appropriate technology below the radar," Research Policy, Elsevier, vol. 40(2), pages 193-203, March.
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    Cited by:

    1. Solikin M. Juhro & A. Farid Aulia & Dessy Aliandrina & Donni Hadiwaluyo & Edo Lavika, 2019. "The Role Of Catalytic Collaboration In Leveraging Transformational Leadership Competencies To Generate Sustainable Innovation," Working Papers WP/11/2019, Bank Indonesia.
    2. Solikin M. Juhro & Denny Lie & Aryo Sasongko, 2021. "Monetary-Macroprudential Policy Mix And Covid-19 Pandemic In An Estimated Dsge Model For Indonesia," Working Papers WP/01/2021, Bank Indonesia.

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    More about this item

    Keywords

    New sources of growth; Innovation; Frugal innovation; Transformational leadership; Breakthrough possibility frontier;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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