Orchestrating frugal eco-innovation: the plethora of challenges and diagnostics in lean startups of emerging economies


  • Syed Mudasser Abbas School of Management, Huazhong University of Science and Technology, Wuhan,
  • Zhiqiang Liu School of Management, Huazhong University of Science and Technology, Wuhan




Frugal innovation, Eco-innovation, Lean startups


Purpose – Sustainable development research assumes that startups, under extreme financial constraints, cannot sacrifice resources now for benefits later without risking their survival. Furthermore, their non-compliance with environmental regulations adds fuel to the fire. This paper aims to explore the challenges faced by startups in resource-scarce economies and the innovative ways of coping with these challenges. Design/methodology/approach – The data for the study was collected through 17 semi-structured interviews taken from startup owners and industry experts based in Pakistan and Bangladesh. The transcribed data were coded through NVivo 12 and themes were generated by merging 47 open and 14 axial codes. Findings – The findings show that a lack of government support and lack of organisational readiness and motivation significantly affect startups’ frugal eco-innovation. Empirical evidence reveals problems related to the business ecosystem, and internal organisational issues also contribute to challenges faced by startups in attaining a competitive position in the industry. Research limitations/implications – The study’s findings suggested leveraging dynamic capabilities can help lean startups in frugal eco-innovation. Furthermore, organisational cohesion, business ecosystem, government regulations and assistantship, organisational mismanagement and market realisation are decisive in startups’ competitive position in emerging economies. Practical implications – The findings of the study will result in a higher adoption rate of more competitive business models, and hence, startups’ sustainability. The results would be an effective and efficient deployment of sustainable technological solutions, creating more customer and shareholder value leading to economic growth. Originality/value – This research offers a comprehensive analysis of frugal eco-innovative startups by exploring the interplay between different challenges and organisational capabilities. Furthermore, the study contributes to the existing body of knowledge by providing empirical evidence that ecoinnovation can be conducted in a resource-constrained environment. This study challenged the scholarly and managerial assumption of the availability of finances as a significant player in eco-innovation. The study also links the Darwin theory of startups to a competitive edge over rivals for startups’ survival.


Não há dados estatísticos.


Agarwal, N., Grottke, M., Mishra, S., & Brem, A. (2017). A Systematic Literature Review of Constraint-Based Innovations: State of the Art and Future Perspectives. IEEE Transactions on Engineering Management, 64(1), 3-15. doi:10.1109/TEM.2016.2620562

Akter, S., Bandara, R., Hani, U., Wamba, S. F., Foropon, C., & Papadopoulos, T. J. I. J. o. I. M. (2019). Analytics-based decision-making for service systems: A qualitative study and agenda for future research. 48, 85-95.

Anwar, M., Khan, S. Z., & Shah, S. Z. A. (2018). Big data capabilities and firm’s performance: a mediating role of competitive advantage. Journal of Information & Knowledge Management

(04), 1850045.

Aslam, S., & Hasnu, S. A. F. (2016). Issues and constraints perceived by young entrepreneurs of Pakistan. World Journal of Entrepreneurship, Management and Sustainable Development, 12(1), 50.

Barnard, C. J. M. G. S. (1938). The Functions of the Executive Harvard University Press Cambridge.

Barrichello, A., dos Santos, E. G., & Morano, R. S. (2020). Determinant and priority factors of innovation for the development of nations. Innovation Management Review

Behl, A. (2020). Antecedents to firm performance and competitiveness using the lens of big data analytics: a cross-cultural study. Management Decision

Bhatti, Y., Khilji, S. E., & Basu, R. (2013). Frugal innovation. In Globalization, change and learning in South Asia (pp. 123-145): Elsevier.

Bhatti, Y. A., & Ventresca, M. (2013). How can ‘frugal innovation’be conceptualized? Available at SSRN 2203552.

Brem, A., & Ivens, B. (2013). Do frugal and reverse innovation foster sustainability? Introduction of a conceptual framework. Journal of Technology Management for Growing Economies, 4(2), 31-50.

Bryman, A. (2016). Social research methods (International ed.). New York;Oxford;: Oxford University Press.

Cantamessa, M., Gatteschi, V., Perboli, G., & Rosano, M. (2018). Startups' Roads to Failure. Sustainability, 10(7), 2346. doi:10.3390/su10072346

Charlton, A. (2012). Doing your literature review: Traditional and systematic techniques [Book Review]. In (Vol. 12, pp. 54-55).

Cheng, C. C., Yang, C.-l., & Sheu, C. J. J. o. C. P. (2014). The link between eco-innovation and business performance: a Taiwanese industry context. 64, 81-90.

Creswell, J. W., & Poth, C. N. (2016). Qualitative inquiry and research design: Choosing among five approaches: Sage publications.

Davis, S. J., Haltiwanger, J., & Schuh, S. J. S. b. e. (1996). Small business and job creation: Dissecting the myth and reassessing the facts. 8(4), 297-315.

de Jesus Pacheco, D. A., ten Caten, C. S., Jung, C. F., Navas, H. V. G., Cruz-Machado, V. A. J. J. o. E., & Management, T. (2018). Eco-innovation determinants in manufacturing SMEs from emerging markets: Systematic literature review and challenges. 48, 44-63.

Díaz-García, C., González-Moreno, Á., & Sáez-Martínez, F. J. (2015). Eco-innovation: insights from a literature review. Innovation, 17(1), 6-23. doi:10.1080/14479338.2015.1011060

Doran, J., & Ryan, G. J. E. J. o. I. M. (2012). Regulation and firm perception, eco-innovation and firm performance. 15(4), 421-441.

Dost, M., Pahi, M. H., Magsi, H. B., & Umrani, W. A. (2019). Effects of sources of knowledge on frugal innovation: moderating role of environmental turbulence. Journal of Knowledge Management.

Ecorys. (2012). EU SMEs in 2012: At the Crossroads. Retrieved from

Farbey, Y. (2015). THE DARWIN THEORY OF START-UPS. Retrieved from http://thestartupmag.com/darwin-theory-startups/

Forcadell, F. J., Aracil, E., & Úbeda, F. (2019). The Influence of Innovation on Corporate Sustainability in the International Banking Industry. Sustainability, 11(11), 3210. doi:10.3390/su11113210

Forsman, H. J. J. o. S. B., & Development, E. (2008). Business development success in SMEs: a case study approach. 15(3), 606-622.

Fritsch, M., & Noseleit, F. (2010). Start-ups, long-and short-term survivors and their effect on regional employment growth.

Galvin, P., Rice, J., & Liao, T. S. (2014). Applying a Darwinian model to the dynamic capabilities view: Insights and issues(1). JOURNAL OF MANAGEMENT & ORGANIZATION, 20(2), 250-263. doi:10.1017/jmo.2014.34

Ghisetti, C., Mancinelli, S., Mazzanti, M., & Zoli, M. (2017). Financial barriers and environmental innovations: evidence from EU manufacturing firms. Climate Policy, 17(sup1), S131-S147. doi:10.1080/14693062.2016.1242057

Gonzaga, B. S., Figueiredo, P. S., da Cruz Souza, E. L. R., & Passos, F. U. (2020). Organizational learning capacity of startups in Northeast Brazil. Revista de Gestão.

Groenewald, T. (2004). A phenomenological research design illustrated. International journal of qualitative methods, 3(1), 42-55.

Hadjimanolis, A. J. T. (1999). Barriers to innovation for SMEs in a small less developed country (Cyprus). 19(9), 561-570.

Haque, N. U. J. W. P., & Reports, R. (1961). Awake the Sleeper Within: Releasing the Energy of Stifled Domestic Commerce! , 2006, 2006: 2011.

Hepburn, C., Pless, J., Popp, D. J. R. o. E. E., & Policy. (2018). Policy Brief—Encouraging Innovation that Protects Environmental Systems: Five Policy Proposals. 12(1), 154-169.

Horbach, J. (2008). Determinants of environmental innovation—New evidence from German panel data sources. Research Policy, 37(1), 163-173. doi:10.1016/j.respol.2007.08.006

Horbach, J., Rammer, C., & Rennings, K. (2012). Determinants of eco-innovations by type of environmental impact — The role of regulatory push/pull, technology push and market pull. Ecological Economics, 78(1), 112-122. doi:10.1016/j.ecolecon.2012.04.005

Hossain, M. (2018). Frugal innovation: A review and research agenda. Journal of Cleaner Production, 182, 926-936.

Hossain, M., & Anees-ur-Rehman, M. (2016). Open innovation: an analysis of twelve years of research. Strategic Outsourcing: An International Journal, 9(1), 22-37. doi:10.1108/SO-09-2015-0022

Hossain, M., Simula, H., & Halme, M. J. T. i. S. (2016). Can frugal go global? Diffusion patterns of frugal innovations. 46, 132-139.

Hottenrott, H., & Peters, B. (2012). INNOVATIVE CAPABILITY AND FINANCING CONSTRAINTS FOR INNOVATION: MORE MONEY, MORE INNOVATION? The Review of Economics and Statistics, 94(4), 1126-1142. doi:10.1162/REST_a_00227

Kammerer, D. J. E. E. (2009). The effects of customer benefit and regulation on environmental product innovation.: Empirical evidence from appliance manufacturers in Germany. 68(8-9), 2285-2295.

Kanda, W., Río, P. d., Hjelm, O., & Bienkowska, D. (2019). A technological innovation systems approach to analyse the roles of intermediaries in eco-innovation. Journal of Cleaner Production, 227, 1136-1148. doi:10.1016/j.jclepro.2019.04.230

Kerr, W. R., & Nanda, R. J. A. R. o. F. E. (2015). Financing innovation. 7, 445-462.

Khan, R. (2016). How frugal innovation promotes social sustainability. Sustainability, 8(10), 1034.

Khandker, A. (2014). Constraints and challenges of SME development in the developing countries: A case study of India, Pakistan and Bangladesh. International Journal of SME Development, 1(1), 87-118.

Klewitz, J., Zeyen, A., & Hansen, E. G. J. E. J. o. I. M. (2012). Intermediaries driving eco-innovation in SMEs: a qualitative investigation. 15(4), 442-467.

McNamara, C. (2009). General guidelines for conducting research interviews. Retrived January 11 (2020), 2, 2013.

Miles, M. B., & Huberman, A. M. (1994). Qualitative data analysis: An expanded sourcebook: sage.

Miranda, M. G., & Borges, R. (2019). Technology-based business incubators. Innovation & Management Review

Oliva, F. L., & Kotabe, M. (2019). Barriers, practices, methods and knowledge management tools in startups. Journal of knowledge management

Ortiz-Villajos, J. M., & Sotoca, S. J. R. P. (2018). Innovation and business survival: A long-term approach.

Ozaki, R., Shaw, I., Dodgson, M. J. S., Technology,, & Values, H. (2013). The Coproduction of “Sustainability” Negotiated Practices and the Prius. 38(4), 518-541.

Pansera, M. (2018). Frugal or fair? The unfulfilled promises of frugal innovation. Technology Innovation Management Review, 8(4).

Pansera, M., & Owen, R. (2015). Framing resource-constrained innovation at the ‘bottom of the pyramid’: Insights from an ethnographic case study in rural Bangladesh. Technological Forecasting & Social Change, 92, 300-311.

Pansera, M., & Sarkar, S. (2016). Crafting Sustainable Development Solutions: Frugal Innovations of Grassroots Entrepreneurs. Sustainability, 8(1), 51-51. doi:10.3390/su8010051

Radjou, N., Prabhu, J., & Ahuja, S. (2012). Jugaad innovation: Think frugal, be flexible, generate breakthrough growth: John Wiley & Sons.

Raffoni, A., Visani, F., Bartolini, M., & Silvi, R. (2018). Business performance analytics: exploring the potential for performance management systems. Production Planning Control

(1), 51-67.

Rashid, A., Asif, F. M. A., Krajnik, P., Nicolescu, C. M., Skolan för industriell teknik och, m., Kth, & Industriell, p. (2013). Resource Conservative Manufacturing: an essential change in business and technology paradigm for sustainable manufacturing. Journal of Cleaner Production, 57, 166-177. doi:10.1016/j.jclepro.2013.06.012

Ratten, V. J. J. o. E. i. E. E. (2014). Encouraging collaborative entrepreneurship in developing countries: the current challenges and a research agenda. 6(3), 298-308.

Rennstam, J., & Ashcraft, K. L. (2014). Knowing work: Cultivating a practice-based epistemology of knowledge in organization studies. Human Relations, 67(1), 3-25.

Revell, A., Stokes, D., & Chen, H. (2010). Small Businesses and the Environment: Turning Over a New Leaf? BUSINESS STRATEGY AND THE ENVIRONMENT, 19(5), 273-288. doi:10.1002/bse.628

Rosca, E., Arnold, M., & Bendul, J. C. J. J. o. C. P. (2017). Business models for sustainable innovation–an empirical analysis of frugal products and services. 162, S133-S145.

Salamzadeh, A., & Dana, L. P. (2020). The coronavirus (COVID-19) pandemic: challenges among Iranian startups. Journal of Small Business Entrepreneurship, 1-24.

Santos, D. F. L., Basso, L. F. C., Kimura, H., & Kayo, E. K. (2014). Innovation efforts and performances of Brazilian firms. Journal of Business Research, 67(4), 527-535. doi:10.1016/j.jbusres.2013.11.009

SBA. (2014). Small Business Administration "Frequently asked questions about small business". In: SBA Office of Advocacy.

Schaltegger, S. J. S., & Economy. (2011). Sustainability as a driver for corporate economic success: Consequences for the development of sustainability management control. 33(1), 15-28.

Schilke, O., Hu, S., & Helfat, C. E. (2018). Quo vadis, dynamic capabilities? A content-analytic review of the current state of knowledge and recommendations for future research. Academy of Management Annals

(1), 390-439.

Shabib-ul-Hasan, S., Izhar, S. T., & Raza, H. (2012). The role of society in nurturing entrepreneurs in Pakistan. European Journal of Business Management

(20), 64-73.

Sica, E. (2018). Firms, Finance and Sustainable Transitions: The Financial Constraints of Eco-innovation Companies: Edward Elgar Publishing.

Singh, A. K., Ashraf, S. N., & Arya, A. (2019). Estimating factors affecting technical efficiency in Indian manufacturing sector. Eurasian Journal of Business Economics

(24), 65-86.

Stock, R. M., Totzauer, F., & Zacharias, N. A. J. J. o. P. I. M. (2014). A closer look at cross‐functional R&D cooperation for innovativeness: Innovation‐oriented leadership and human resource practices as driving forces. 31(5), 924-938.

Stott, N., & Tracey, P. (2018). Organizing and innovating in poor places. Innovation, 20(1), 1-17. doi:10.1080/14479338.2017.1358093

Sun, H., Mohsin, M., Alharthi, M., & Abbas, Q. (2020). Measuring environmental sustainability performance of South Asia. Journal of Cleaner Production, 251, 119519.

Tripathi, N., Seppänen, P., Boominathan, G., Oivo, M., Liukkunen, K. J. I., & Technology, S. (2019). Insights into startup ecosystems through exploration of multi-vocal literature. 105, 56-77.

Vu, K. M. (2017). Structural change and economic growth: Empirical evidence and policy insights from Asian economies. Structural Change Economic Dynamics

, 64-77.

Weller, S. C., Vickers, B., Bernard, H. R., Blackburn, A. M., Borgatti, S., Gravlee, C. C., & Johnson, J. C. (2018). Open-ended interview questions and saturation. PLOS ONE, 13(6), e0198606. doi:10.1371/journal.pone.0198606

Weyrauch, T., & Herstatt, C. (2017). What is frugal innovation? Three defining criteria. Journal of Frugal Innovation, 2(1), 1-17. doi:10.1186/s40669-016-0005-y

Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101, 697-706.

Yin, R. K. (2017). Case study research and applications: Design and methods: Sage publications.

Yunfei, S., Dongming, X., & Peter, G. (2014). Software startup growth: the role of dynamic capabilities, IT innovation, and customer involvement. Paper presented at the Proceedings-Pacific Asia Conference on Information Systems, PACIS 2014.

Zaki, I. M., & Rashid, N. H. (2016). Entrepreneurship impact on economic growth in emerging countries. The Business & Management Review, 7(2), 31.

Zhu, Y., Wittmann, X., & Peng, M. W. (2012). Institution-based barriers to innovation in SMEs in China. Asia Pacific Journal of Management, 29(4), 1131-1142.




Como Citar

Abbas, S. M., & Liu, Z. (2023). Orchestrating frugal eco-innovation: the plethora of challenges and diagnostics in lean startups of emerging economies. INMR - Innovation & Management Review, 19(4), 339-367. https://doi.org/10.1108/INMR-11-2020-0171