[MUSIC] So what can we learn from the principles of frugal engineering? They can help us design better products and services for new audiences and new markets. Well, first let's take a look at where there are new markets. And then we'll take a look at what frugal engineering actually is and how it might help us in the arts and culture field. Now here's a value map for our field in the form of a pyramid. If you take a look at this what you'll see is that at the bottom there's lots of activity with very low barriers to entry, in the middle we have slightly more professional activity, and at the top we have high art, the fully professionalized or let's say the most perfected part of what we do in our field. I talked before about the extraordinary writer and thinker CK Prahalad. But he wrote about another pyramid, which is the global base of customers that are from the poorest section of the world's population. Rather than those who are from the more mature markets and who have a slightly higher degree of disposable income. Now his pyramid doesn't map exactly onto our pyramid. But it is related in that we tend to think of the many people who can't afford our current ticket prices or who don't want to come and choose to spend their time in that way, is not a viable or desirable market. And yet, this is the fastest growing market for whom we could create value, and you could argue if you're in the non-profit cultural sector that this is exactly the part of the market for who you should be creating value. So how could you do that? Well let's talk about frugal engineering. Frugal engineering which is colloquially expressed in this Hindi word. Means a simple solution design process. It indicates creativity and using existing resources to make things work. Or It could even mean that you're creating solutions from meager resources that you have on hand. This sounds like it might be quite useful for our field. The principles of frugal engineering have huge relevance for us, as we look at creating products and services for all those people who don't come. It's a clean sheet approach to product development and if we were mathematicians we would call it an elegant solution. Frugal engineering is not about taking elements away from existing designs and products to make them cheaper or more profitable. What it is about is closely examining the real needs of a market and then using cost discipline and keen observational and innovation skills to design what they need and no more, what they want and nothing extra. So it's not having a scaled-down performance of Aida by leaving out the elephant [SOUND], it's figuring out how you can get the story line and the musical impact of Aida across without even having a full company of performers. It's the opposite of taking things off the big thing you've built. And it's all about creating something that will meet the bottom base need. During the Second World War Lord Kenneth Clark had a picture of the month exhibit at the National Gallery in London. Using just one painting per month that was taken out of secure storage in Wales during the Blitz, he offered the public the chance to reflect on one great work of art, at no charge, and to remind people of what they were fighting for. This frugal engineering exercise recognize the comfort and the pleasure that a single work of art could provide. The program made gallery goers lifetime gallery goers out of thousands of people who had never been to the national gallery and indeed never been to any gallery. And the program remains today. The two most successful examples of frugal engineering in the commercial world to date are probably the nano which is created by Tata motors to improve on the rickshaw not to make a cheaper car. These first sold at about $2,000 and offered the opportunity of car ownership and mobility for hundreds of thousands of people who never thought that was going to be in their future. The second great example is the Nokia 1100. It's the best selling cell phone in the world ever. This is truly a smart phone. It only makes and receives calls and text messages. It costs around $20 and it has literally opened up the world for millions of people. So there are a few things to bear in mind when we consider what innovations frugal engineering might offer for our field. The first is you have to be aware of your own organizational culture, your own organizational competencies, and what are you going to have to change to create this new work. Second is if you want to put resources in new areas you're going to meet with resistance from those who are invested in doing things the old way. Again, it's human nature. Now if they're resistant enough for long enough we will call them people who are likely to be unemployed as their organization is probably not going to be sustainable. An important part of creating new, frugal high quality artistic products requires cross functional teams. You have to get a lot of different points of view involved. So the culture has to change to support this cross functional way of working. And we're not turning our backs on the top of the pyramid. We're just recognizing that maybe, just maybe we shouldn't be spending quite so much time up there at the pointy end. [MUSIC]
