The Enabling Role of IT in Frugal Innovation

In this conceptual paper, we examine IT-enabled frugal innovation from the lens of absorptive capacity theory (ACAP). The practice of frugal innovation in emerging economies is rooted in low cost approaches, constrained resources, and flexible improvisation. As frugal innovation is an emergent phenomenon, there is little theoretical development and empirical investigation with respect to the enabling role of IT. We address this gap by examining the conceptual underpinnings of frugal innovation and its antecedents, such as IT leveraging capability, dynamic knowledge capabilities, and organizational learning. We develop a research model and provide testable propositions. This paper contributes to ACAP literature by providing a look inside the “black box” of the relationships between three different types of learning (according to ACAP) and their effects on the underlying dimensions of frugal innovation. Furthermore, based on our findings, implications for theory and practice are provided along with guidance for future empirical research.