And now, jugaad innovation is making a comeback in Western economies—especially in the US. Indeed, as described in the book, leading Western firms such as 3M, GE, PepsiCo, Procter & Gamble, Renault-Nissan, Facebook, Google, Siemens are now using jugaad to generate breakthrough growth in an increasingly complex and resource-constrained world.
The jugaad approach stands in marked contrast to the traditional structured approach to innovation—involving large R&D departments, big budgets, planning and control. While this structured approach to innovation has its advantages, it is also increasingly criticized for being expensive, rigid and insular. For instance, according to the management consultancy Booz & Company, despite spending a whopping $550 billion on R&D in 2010 alone, the thousand companies in the world that invest the most in innovation—many of which are Western firms—have generated limited returns on their huge R&D investments. Moreover, structured business processes and methods such as Six Sigma, while highly effective for activities like manufacturing, are unable to deliver the agility and differentiation that Western firms need to innovate in a fast-paced and volatile world. Finally, in today’s interconnected world powered by social media, top-down R&D systems struggle to open up and integrate the bottom-up input from employees and customers.
Jugaad on the other hand is flexible, frugal and democratic: it is often bottom-up rather than top-down and involves a much larger number of people beyond those who are typically tasked with doing innovation in corporations. The strength of jugaad innovators lies in their ability to get more from less, experiment continually, and creatively engage people who are typically left out of the innovation process.