Frugality in innovation processes: a heuristics-based perspective from the 'informal economy'

Despite an initial emphasis on frugal innovation processes, a so-called 'product view' has, dominated the scholarship so far. A vast body of social science scholarship, including certain branches of contemporary decision theory research, however, provides important insights for a process centric understanding of frugality. These studies hint at the critical role of intangible (cognitive) factors, besides physical and material resources, by connecting frugality to intuition, judgment and learning. Drawing upon these scholarships, we analyse the relevance of heuristics in identifying a problem, searching for resources for experimenting, and implementing innovation in the informal economy. These processes reflect ‘need satisfaction’ through the ‘simple search rules' to find solutions to daily problems. A deep understanding of the surrounding knowledge and resource environment is a key to applying these heuristics successfully, which demonstrate a capacity to learn and adapt within the actual environment.