Drivers of Frugal Innovation for Achieving Sustainable Development Goals

ABSTRACT As stakeholders increasingly emphasize sustainability, understanding how organizations can contribute to Sustainable Development Goals (SDGs) is becoming essential for managers. While frugal innovation is increasingly recognized for its potential to contribute to resource‐efficient solutions, its broader implications for SDGs have not received sufficient empirical attention. Given this, the aim of this study is to: (i) investigate the relationship between institutional forces (i.e., coercive, normative, and mimetic) and the adoption of frugal innovation; and (ii) to explore the role of frugal innovation in achieving SDGs in manufacturing firms. To this end, the study employs a hybrid quantitative approach combining partial least squares‐structural equation modeling (PLS‐SEM) analysis to test the linear relationships, and artificial neural network (ANN) analysis to identify the nonlinear relationships, in the research model. Using a survey data from 279 respondents, the results reveal that all institutional forces positively influence frugal innovation, with mimetic forces having the greatest normalized importance, followed by normative forces, and then coercive forces. The results also demonstrate that frugal innovation plays a positive role in achieving SDGs. This study delivers valuable insights using a robust methodology that highlights the role of frugal innovation in different areas of sustainable development and helps managers aiming to improve their contribution to SDGs through the concept of frugal innovation.