Nordic companies often produce high-value products with a focus on design and technology. While attractive and often innovative, they are also expensive and tend to target the needs and resources of the wealthy. In a global economy where emerging markets are of growing importance, Nordic companies frequently struggle to adjust products and services to the growing middle- and low-income markets. Meeting theneeds and aspirations of these segments calls for frugal solutions. In other words, solutions that focus more on ‘need to have’ as opposed to ‘nice to have’ — and with target price points and features that match middle- and low-income customers.
Frugal products are often associated with simple and low-tech solutions. This, however, is not always the case. In fact, some of the most advanced services in the world — such as Google search or GPS navigation — cost little or nothing if you, like billions of people from Mumbai to Nairobi do, have a smartphone and access to the Internet. Not only are services such as Skype free, but they also enable other services to bedelivered in much more advanced ways. In this way, technology such as the mobile Internet breaks the conventional link between high cost and high value to end users.
For the most part, Nordic companies cannot compete with low-cost, low-tech products. However, they could compete with high-tech-low-cost solutions (HTLC). Nordic companies can draw on deep insights and advanced scientific knowledge based on years of experience. Playing off technical trajectories and new infrastructures, Nordic companies are in a unique position to create solutions that are highly sophisticated and offer high utility to the end consumer at much lower prices than what has conventionally been possible. This report will look at what it takes to make this possible.
