Is competition good for business? More specifically, is the excessive competition good for any business? Customer is truly king at the moment in many areas especially in new digital industries, with aggressive pricing, free-to-consume digital content and services. And investors are picking up the bill in hope for massive valuations during exit.

In this overly competitive environment, making profits is tough, even in more traditional industries. And if no money is being made, there is none to invest in innovations and R&D. Slow growth or no growth in developed economies along with environmental constraints, rapidly ageing societies and various structural problems will increase demands for more frugal models of innovation, production and consumption and will require radical new models in areas such as media, health care, retail and others that affect directly or indirectly our everyday life. Digitalisation is helping in lowering the costs but only partly. All this calls for new approaches especially in developed economies. Frugal thinking needs to be applied to everything companies do. It’s not “downsizing” or “feature stripping” – it’s a innovative and radical new approach – frugal transformation and complete new service design paradigm.

But even in developing countries, where markets are growing and are projected to dominate the global economy in the coming decades, frugality plays a key-role.

Therefore, regardless whether your company operates in developed markets or in developing markets, there is a strong need to break out of the traditional business thinking and challenge the assumptions about how your company sees research, design, distribution and manufacturing of products and services. There needs to be a more entrepreneurial approach throughout all management levels in your company. Frugal innovations are not just about cost savings. The eventual service or product that frugal innovation thinking produces is more affordable, functional and reliable.