Lakhasly

Service innovation is not exclusively the domain of high-tech service providers in Western countries.
Service innovation can occur in the poorest of communities, spurred on by the old adage that 'necessity
is the mother of invention'. In their book Poor Economics, Banerjee and Duflo describe levels of ingenuity
in poverty-stricken areas which might put to shame a Western service development manager, surrounded
by piles of quantitative and qualitative data (Banerjee and Duflo, 2011).
Consider some of the cases of ingenuity among the poor that the authors noted:
A small tailor's shop in Dakar, built in a tree house a few feet off the ground, with a wooden iadder
that the tailor would throw down so his clients did not have to step through the garbage surrounding
his shop and which would then quickly be pulled up to leave the pavement unobstructed.
The slum dwellers of Mumbai who innovated with new ways of collecting and sorting garbage into the
categories that modern recycling plants demanded.
The authors ask why the individuals behind these innovations put up with the conditions in which they
operated. Why, for example, did the tailor not move to a prosperous suburb, but instead openate out of a
rubbish-infested street in a poor part of town? It seemed that necessity led to innovation - the rubbish-
infested street was presumably the only place where the business would be visible, and at the same time
cheap enough to make the business viable. The rental charge of a retail unit in a pleasanter location would
probably make his services unaffordable to most of his poor clients. The owner also probably could not raise
the finance to operate out of better premises. Many families in India are too poor to afford to pay for their
children to attend high school, so children are often forced to earn their living from a very early age. It has
been claimed that the Indian government does little to protect young people from such economic challenger.
Such harsh environments for service development have spurred further innovation in the form of
micro-credit - small loans given by lenders to individuals whom the mainstream banks would not look
at. Micro lenders have themselves adopted low-cost business models which adapt to the needs of their
small-scale, asset-poor clients.
Gome innovators from poor economies have gone on to create major service businesses when the
opportunities arose. Could surviving and prospering in the face of adversity be the greatest mark of a
great service innovator? Even in West too much time concentrat-
ing on innovations of large corporations while overlooking the small-scale innovations made out of
necessity by some of the poorer members of a community?