An investigation of achieving frugal innovation: the role of digital innovation enabled resourcefulness

Abstract

This thesis examines how a small and medium enterprise (SME) engages in frugal innovation by achieving substantial cost reduction and generating new value in resource-constrained contexts. Due to the prevalence of digital innovation, various cases of SMEs achieve frugal innovation despite facing limited resources. Scholars have primarily focused on the frugal aspect of frugal innovation; nevertheless, how to unleash its potential for new value generation remains underexplored. This thesis analyzes how to utilize resourcefulness—a boundary-breaking behavior of creatively bringing resources to bear and deploying them to generate and capture new or unexpected sources of value—to achieve the new value generation aspect of frugal innovation. Using qualitative analysis, this thesis undertakes a case study of LAZ, a manufacturing firm in the low-voltage apparatus industry in China, which is committed to building frugal innovation. Based upon an inductive and grounded theoretical approach, this study develops a process model explaining how the target firm leverages digital innovation to enact resourcefulness that culminates in frugal innovation. Consequently, the process model of building digital innovation enabled resourcefulness to achieve frugal innovation mainly involves three mechanisms: “data-driven foreseeing,” “flexible synchronizing,” and “creative deviating.” The findings contribute new insights to the scholarship on resourcefulness, frugal innovation, and digital innovation. Specifically, this research extends the “optimized performance level” attribute of frugal innovation by taking a step further to propose new value generation as the innovative aspect of frugal innovation, instead of only focusing on the frugal aspect of frugal innovation. Moreover, whereas extant literature on resourcefulness has largely foregrounded cognitive dimensions of resourcefulness, this study advances the resourcefulness literature by detailing the behavioral resource-configuring process through which digital innovation catalyzes and enacts resourceful actions. Meanwhile, this study contributes to guiding managers on leveraging digital innovation to unleash the creative potential of resourceful actions so as to overcome resource constraints, adapt to dynamic environments, and achieve frugal innovation effectively.

Date of Award	15 Nov 2025
Original language	English
Awarding Institution	University of Nottingham
Supervisor	Jun Luo (Supervisor), Martin Liu (Supervisor) & Wendy Ye (Supervisor)