This is the last slide from the “Frugal innovation” session I delivered last month to a cohort of executive MBA students from the University of Sidney at IIM Bangalore. I gave this talk for the first time at IIMB when a similar group from HEC Paris visited a decade ago, and I've taught it from time to time. This slide presents two dominant paradigms that enable frugal innovations that benefit masses, especially the bottom of the pyramid. For simplicity, I call the first paradigm “Ford-Bezos,” as these two entrepreneurs epitomize the creation of efficient large-scale production systems that made goods like cars and online shopping available at low cost to the masses. The second paradigm, which I call “Gandhi-Schumacher,” named after Mahatma Gandhi and Fritz Schumacher, is also concerned with making goods available at low cost but with appropriate technology where production is distributed, and the machine feels like an extension of the human body. One could call the former technology-centric frugal innovation and the latter human-centric affordable innovation. One question that often gets raised is: Is the Ford-Bezos paradigm the clear winner right now?
Ford-Bezos paradigm: Most of us are familiar with this paradigm. It is a response to the question, “How do we build a large-scale, efficient production and distribution system that offers goods and services to masses?” Centralized production and automation are at the heart of this paradigm. In India, Amazon claims to deliver to every serviceable pincode in the country. Since 2013, it has partnered with India Post, tapping into more than 150,000 post offices in towns and villages with no other reliable courier coverage. By 2024, it was using 120 trains operating 130 intercity routes connecting 91 cities. Amazon globally employs 1 million robots in its warehouses (as of mid-2025) and 1.56 million people. Workers at warehouses across the US, UK, and India have complained about restrictive bathroom policies. As articulated in books like “Amazon Unbound: Jeff Bezos and the invention of Global Empire”, employee/worker-friendliness is not what Amazon is known for. Thus, the paradigm delivers low-cost goods but comes at a cost.
Gandhi-Schumacher paradigm: While Gandhiji is often considered the “father” of a movement later called “Appropriate technology”, Fritz Schumacher, the author of “Small is beautiful”, is considered its founder. In 1955, following a stint as an economic advisor to the government of Burma (now Myanmar), Schumacher published a short paper, “Economics in a Buddhist country”. A revised version was later published as "Buddhist economics" in 1965. In addition to Buddhism, Schumacher credited his ideas to Gandhi.
Appropriate technology involves technological choice and application that is small-scale, affordable by its users, labour-intensive, energy-efficient, environmentally sustainable, and locally autonomous. By 1980, the number of organizations involved in development and promotion of appropriate technology had grown to 1000 worldwide. However, in 2010 Paul Polak announced, “The appropriate technology movement died peacefully in its sleep ten years ago.” The title of the essay is, “The death of appropriate technology, if you can’t sell it, don’t do it”. Of course, ideas don’t die easily. So, let’s look at a couple of organizations exhibiting this paradigm in India today.
Selco and Aravind Eye Care: Selco was started in 1995 by Harish Hande to create inclusive, adaptable, and enduring solar solutions. In its labs in Kalahandi in Odisha, Williamnagar in Meghalaya, Guwahati, and Bangalore, cross-functional teams that include an architect, a doctor, an engineer, a finance person, and sometimes an anthropologist and a Yakshagana artist meet to design new programs that address the question, “Is the energy solution affordable in the long run?” For example, a solar-powered sewing machine may enable a woman to produce 8 shirts a day instead of 2. However, if she is not able to find a market for her products, then there is a danger of creating technology debt, says Hande. Hence, financing, maintenance, and support are important parts of solutioning. In the past few years, Selco revenue ranged between ₹90 and ₹140 crore (USD 10- 15 M), and it has been mostly profitable and self-sustaining.
Dr. Venkataswamy, the founder of Aravind, had a vision of making eye-care delivery as efficient as McDonald’s. When it started as an 11-bed hospital in 1976, five beds were for the paying patients, and six beds were for non-paying. FY24 activity report of Aravind says that out of a total of 729,187 surgeries, 363,330 (50%)were in the paying section, 250,349 were in the subsidised section with walk-ins to the free hospital, and 115,508 were done through free camps organized by its seven hospitals. In FY24, Aurolab launched 7 new surgical products, doctors at Aravind published 180 papers, and a conference for Mid-Level Ophthalmic Personnel (MLOP) and admin staff had 319 submissions, 200 presentations, and 55 participants winning prizes. When Aravind celebrated its golden jubilee last month, my guess is that the original question Dr V asked, “How to eliminate needless blindness?” was raised again.
Aravind seems to combine the scale and efficiency of the Ford-Bezos paradigm with the compassion and empowerment of the Gandhi-Schumacher paradigm. Aravind is a not-for-profit organization and is still run by a set of dedicated people groomed by Dr V.
Fortune at the bottom of the pyramid? When C K Prahalad wrote the book “The fortune at the bottom of the pyramid: Eradicate poverty through profits” in 2004, Aravind figured prominently in it. Within a couple of years, Prahalad’s colleague Aneel Karnani, at the University of Michigan’s Ross School of Business, wrote a rebuttal, “Fortune at the bottom of the pyramid: A mirage”. Karnani argued that the BoP market is generally too small monetarily to be profitable for most multinationals. What is the verdict after two decades?
Large multinational FMCG companies like Hindustan Unilever, Nestle, and Colgate have been serving rural India for half a century. And now Amazon is taking it to the next level. And yet, Blume Ventures, an early-stage venture fund headquartered in Mumbai, puts it bluntly in the following slide from their Indus Valley Annual Report (2025). It calls India-3 the market with the bottom 1 billion people unmonetizable. Perhaps it is saying that unless you are selling soap, shampoo, toothpaste, noodles, and cigarettes, don’t bother selling to BoP.
Gandhi’s talisman test: Gandhi left the following quote in 1948, which was published posthumously. "I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away."
People like Dr V of Aravind and Harish Hande of Selco seem to be genuinely concerned with the BoP. They don’t start with the pursuit of making a lot of money for themselves. Without compassion, the Gandhi-Schumacher paradigm is a burden. This is where Gandhi’s talisman test – to check how big the self has become – turns relevant. Self-awareness puts “self” in its proper place in relation to other people and the planet. This dimension is sometimes referred to as the spiritual dimension. As Prof. Kasturi Rangan of Harvard Business School said of Dr V, “This man’s spirituality wasn’t incidental to the story. It was what everything else hinged on.”
To summarize, Ford-Bezos is the dominant paradigm worldwide today. It is playing an important role in making goods and services available to the masses at low cost. In many places, it is delivering at the expense of the environment and by undermining the human spirit. Unlike Paul Polak, I think the Gandhi-Schumacher paradigm isn’t dead. Actually, even Polak pointed out in his essay that “new movements for the design of technology for the poor are emerging from the ashes.” He referred to Design for Extreme Affordability at Stanford and D-Lab at MIT. In fact, due to shifting institutional priorities, the Stanford program is closing this Fall (2026). In India, IIT Bombay’s Tata Centre for Technology and Design and IIT Madras’s Rural Technology Action Group (RuTAG) are active in this area. And Polak is right: marketing and selling are an integral part of the sustainability of the model. Moreover, like Harish Hande, it is important to ask, “Is this solution affordable in the long run?” So long as there are people who see themselves as deeply connected with other people and the planet, the Gandhi-Schumacher paradigm will persist.
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