Local ingenuity, local limits: Grassroots innovations and the institutional voids in place-based development in rural India

Innovation in resource-rich settings has been studied at length, yet much less is known about how people innovate out of necessity within informal economies. Rather than just asking whether bricolage operates under severe scarcity, we examine how the act of recombining resources itself changes when innovators have neither material means nor institutional backing. Drawing on in-depth, process-oriented case studies of four grassroots innovators in rural India, we identify mechanisms that extend bricolage theory beyond its present boundaries. The first, affective resource activation, shows that empathy grounded in lived, shared hardship serves as a genuine source of knowledge during recombination. It shapes which problems are defined and which solutions count as feasible, rather than merely supplying motivation, as prosocial-motivation theory would hold. The second, sacrifice-as-substitution, describes how innovators’ own land, health, and livelihoods become direct inputs to the innovation process rather than background risk, which erodes the separation between innovator and resource. The third, contingent bridging, captures how outside institutional support, when it does arrive, tends to redirect the entire trajectory of innovation instead of simply adding fuel to it. This differs sharply from the stable, self-activated ties assumed in research on network bricolage. Together, the three mechanisms suggest that extreme scarcity does more than intensify familiar bricolage dynamics: it may alter their underlying logic and produce a tension between local effectiveness and scalability that resourcefulness alone cannot resolve. Theoretically, we link bricolage to effectuation theory, capability approach, and research on institutional voids to build a fuller account of innovation under compounding constraints. The paper contributes to local economic development research by explaining why locally rooted innovation in informal economies so rarely turns into broader local economic gains, and by showing that the binding constraint is the absence of local knowledge, financing, and diffusion institutions rather than the effort of innovators. For local economic development, the analysis points to decentralized innovation ecosystems that could replace today’s chance-based support for grassroots innovators with something more systematic and dependable.