Research pick: Businesses innovating under pressure - "Innovating under constraints: a bibliometric and systematic review of frugal and inclusive innovations in start-up ecosystems"

Start-up companies facing economic uncertainty and tightening resources are changing our conception of innovation, according to a review in the International Journal of Business Innovation and Research. The review examined 347 papers published from 2000 to 2025 and found that scarcity is increasingly being treated not merely as a barrier but as a catalyst for new products, business models, and social outcomes. This finding is particularly true of emerging markets, where institutional support is often weakest.

The researchers examined four related models of resource-constrained innovation: frugal, inclusive, reverse, and constraint-driven entrepreneurship. Frugal innovation is typically defined as designing affordable solutions by doing more with less. It has broadened into a strategic approach that emphasises accessibility and relevance to local contexts rather than simple cost-cutting. Inclusive innovation extends this logic by involving marginalised communities directly in the creation of products and services intended for their benefit, shifting innovation from a top-down exercise to one based on participation and empowerment.

Reverse innovation, once viewed as an exception, has become a distinct approach wherein ideas originating in lower-income countries diffuse into wealthier markets. This challenges long-standing assumptions that technological and managerial know-how flows only one way from the developed world to the developing nations.

The study then argues that resource-constrained entrepreneurship links all three models, showing how start-ups rely on improvisation, bricolage (the creative repurposing of available resources) as well as social networks to develop solutions without formal backing or substantial capital.

The team found that scholarship in the early 2000s concentrated on conceptual discussions of institutional voids, gaps in infrastructure, regulation or markets that force firms to innovate differently, and on grassroots ingenuity. More recent research reflects technological shifts on the global scale, with growing emphasis on sustainability, digital transformation, and impact-oriented business models.

The review concludes that understanding how innovation emerges under constraint is becoming strategically vital for investors, governments, and businesses as economic, environmental, and social pressures intensify worldwide.

Yadav, M., Kumar, M., Goswami, A., Tiwari, N.K., Amoozegar, A. and Rani, P. (2025) ‘Innovating under constraints: a bibliometric and systematic review of frugal and inclusive innovations in start-up ecosystems’, Int. J. Business Innovation and Research, Vol. 38, No. 8, pp.31–55.