This chapter examines the question under what conditions frugal innovations can be considered as a responsible innovations. Frugal innovations are (re)designed products, services or systems at substantially lower costs as compared to ‘standard’ products, services or systems but without sacrificing user value, aimed at markets in developing countries. A responsible innovation is an innovation in the development and production of which ethical and social elements have been taken into account. Besides affordability and technological achievability successful frugal innovations are characterised by scalability. These characteristics do not automatically resemble the ethical and social elements that characterise responsible innovations. The central question in this chapter is examined in terms of two phenomena, (1) social standards, and (2) inclusion of low-income consumers. The case of frugal weather stations is used as an illustration. The conclusions report that (1) an optimal level of social standard – and hence responsibility – exists, and (2) polycentric innovation – including low-income producers/entrepreneurs and consumers in the international value chain – is a way to make frugal innovations inclusive and hence responsible. The mechanisms are the reduction of (1) instability in the product development process and of (2) the unreliability of existing technological and institutional infrastructures.

Frugal innovation aims to bring products, services and systems within the reach of billions of poor and emerging middle-class consumers. Through significantly cutting costs while safeguarding user value, frugal innovation opens opportunities for new business models and may well disrupt innovation processes in entire economies. The debate on the developmental implications of frugal innovation is ideologically polarized. Whereas advocates suggest a business view of ‘win-win’ in which companies can earn profits while simultaneously alleviating poverty, critics argue that frugal innovation will merely exacerbate capitalist exploitation and inequality. In this contribution we argue that an empirical approach is needed to assess where and when frugal innovation is more likely to enhance inclusive development.