Abstract

Frugal innovation has been believed to be an appropriate innovation model for environmentally-constrained, especially in developing economies. Although the output of this innovation is not much different from conventional innovation, the frugal capability that focuses on cost reduction, core product functions, and sustainability allows frugal innovation to provide more benefits to environmental, social, and governance (ESG) principles. However, studies related to frugality have only focused on discussing the process mechanisms of realizing frugal innovation and how frugality promotes sustainability. In fact, the proper resource capital for frugal innovation and sustainability also needs to be studied considering that frugality is pursued by organizations in the context of environmentally-constrained. This conceptual paper attempts to identify several social resources as antecedents to frugality and sustainability along with their implications. This study is expected to contribute to the development of frugal innovation literature and sustainability issues by considering social resources in the context of environmentally-constrained. In the future, frugal innovation cannot be treated the same as conventional innovation optimization strategies. Organizations and business actors must pay attention to rich social resources in creating market opportunities, new solutions, and collective awareness of sustainability challenges.