The search for cutbacks in public spending will become urgent when demand for welfare services is rising as the baby-boomers start to retire and medical innovations push up health-care costs. By 2050, one in three people across the OECD countries will be on a pension. Frugal innovation is about redesigning products and involves rethinking entire production processes and business models. Companies reduce costs so they can reach more customers and accept thin profit margins to gain volume.