What facilitates frugal innovation? – A configurational study on the antecedent conditions using fsQCA

Abstract

Frugal innovation, a new paradigm suitable for start-ups to promote innovation with restrained resources, has proliferated over the past decade. However, a comprehensive analysis of the factors affecting frugal innovation during the entrepreneurial process is lacking. To fill this gap, this study explores the antecedent conditions of frugal innovation, based on the Timmons model and configurational perspective through a fuzzy set Qualitative Comparative Analysis of 132 start-ups in China. Resources, entrepreneurial opportunities, and top management teams are key factors in an entrepreneurial process. Our study findings indicate that frugal innovation cannot be achieved through one of these factors independently. Further analysis indicates that the combined effects of resources, entrepreneurial opportunity, teams, and digital technologies facilitate frugal innovation; particularly, four configurations are observed to enhance it. These include the "sustainable leadership-centric and resource-enhanced configuration" (F1), the "cognitive flexibility-centric and market response-enhanced configuration" (F2), the "digital technology and resource double-centric configuration" (F3), and the "multiple centric configuration" (F4). Moreover, complementary or substitutional relationships exist among resource bricolage, external relational embeddedness, resource activities, and market activities.