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Democratizing Innovation: The Evolving Phenomenon of User Innovation
Abstract
Almost 30 years ago, researchers began a systematic study of innovation by end users and user firms. At that time, the phenomenon was generally regarded as a minor oddity. Today, it is clear that user-centered innovation is a very powerful and general phenomenon. It is rapidly growing due to continuing advances in computing and communication technologies. It is becoming both an important rival to and an important feedstock for manufacturer-centered innovation in many fields. In this article, I provide an overview of what the international research community now understands about user-centered innovation. Die wissenschaftliche Forschung zu Nutzerinnovationen begann vor etwa 30 Jahren. Whrend das Phnomen anfangs noch als eher unbedeutende Kuriositt abgetan wurde, steht seine allgemeine Bedeutung heute ausser Frage. Bedingt durch Fortschritte in IT und Kommunikationstechnologien stellen Nutzerinnovationen in verschiedenen Feldern eine zunehmende Konkurrenz bzw. eine wertvolle Ergnzung fr herstellerseitige Innovationsaktivitten dar. In diesem Artikel wird eine bersicht ber den Stand der Forschung gegeben.
... A key element in this appears to be the idea of building wider communities within which the boundary space can operate. Research by Von Hippel (2005) and colleagues (Jeppesen and Molin, 2003) has shed light on innovation communities, emphasizing the significance of user involvement as a core source of innovation. Such communities, defined by Von Hippel as networks of individuals or firms linked by information transfer, whether through face-to-face or electronic means, play a crucial role in the innovation process. ...
... These communities are not necessarily formal membership groups but are characterized by their continuity and the free exchange of innovative ideas, which others find valuable. This approach to innovation highlights the concept of "sticky information"the idea that knowledge about user needs and manufacturer capabilities is highly contextual and challenging to transfer (Von Hippel, 1998, 2005. Innovation communities serve as a solution to this problem by creating a platform for the free flow of information, thereby aligning the interests of users and producers in a mutually beneficial manner. ...
... In summary, the discourse on boundary innovation spaces and user-inclusive innovation communities underlines the need for a deeper understanding of community formation, shared goals, and the multifaceted relationships that can foster innovation. Our finding are in line with previous research, including works by Von Hippel (2005), (2003), and others, highlighting the complex interplay between physical spaces, community dynamics, and the iterative process of innovation. ...
... Von Hippel (2005) analiza el modo en que la innovación se encuentra en un proceso de democratización debido a las mejoras en la tecnología de las comunicaciones y la informática, y la forma en que estos avances permiten desarrollar nuevos productos y servicios. Al focalizar el análisis en la innovación que realiza el usuario, explica por qué y cuándo a las personas les resulta beneficioso desarrollar nuevas ideas. ...
... En la actualidad existe una aplicación del concepto de apertura en ámbitos diversos como la ciencia abierta (Dasgupta y David, 1994), la invención colectiva (Allen, 1983;Nuvolari, 2004), el software de código abierto (Raymond, 1999;Lessig, 2001;Lerner y Tirole 2001;Dalle y Jullien, 2003), en algunos casos de diseño centrado en el usuario (von Hippel, 2005), y la innovación basada en la comunidad. En los ejemplos citados, los individuos, organismos o empresas dan a conocer abiertamente el conocimiento que producen. ...
... Resulta de utilidad el análisis de la participación (Pretty, 1995;Kelty et al., 2015) y los niveles de apertura (Huizingh, 2011;Bonvoisin et al. 2018;West, 2003;Hardwood, 2016). El cambio en el papel de los usuarios en la tecnología y el modo en que se convierten en parte del proceso de diseño (Von Hippel, 2005Anderson, 2014;Galán, 2012). Los aprendizajes en los procesos socio técnicos (Carrapizo, et al. 2018;Lundvall 1985Lundvall 1992Freeman, 1994;Lundvall y Johnson, 1994;Arrow, 1971;von Hippel, 1976;Schön, 1992). ...
La agricultura familiar es el principal modo de producción agrícola del planeta. En el mundo existen unos 1.500 millones de campesinos, minifundistas y pequeños productores. Sin embargo, ocupan sólo el 20 por ciento de las tierras disponibles. A pesar de habitar el territorio en pocas hectáreas, producen el 56 por ciento de los alimentos que se consumen en el planeta. La agricultura convencional y el agronegocio, como vías de innovación dominante, presentan desafíos e incompatibilidades con el contexto de los agricultores familiares: tienen gran impacto en el entorno natural, provocan degradación ambiental, concentra la producción y desplaza a las poblaciones rurales. Muchas innovaciones han eliminado a los agricultores del proceso creativo al desarrollar artefactos que supuestamente acomodan su actividad, ignorando en gran medida sus aportes y deseos empíricos. Algunos, abandonaron sus modelos tradicionales y adoptaron tecnología exógena pero han sufrido grandes cambios y fracasos en sus esquemas productivos. La innovación convencional no ha logrado desarrollar soluciones consistentes específicas para la agricultura familiar. En vista de estos problemas, ¿qué sucede cuando se aplican modelos abiertos y participativos en el diseño de tecnologías, máquinas y artefactos? La investigación tiene como objetivo determinar de qué manera se implementa el diseño abierto y qué beneficios presenta. El propósito del estudio es analizar cómo se produce el proceso de apertura en proyectos participativos de desarrollo e implementación de tecnologías abiertas en el ámbito de la agricultura familiar a nivel nacional. Para ello, luego de realizar un mapeo de casos existentes de desarrollo tecnológico participativo de artefactos internacional, se analizan cuatro proyectos de desarrollo tecnológico en el ámbito nacional donde participan diseñadores, fabricantes, investigadores y familias productoras. ¿De qué modo se generan e implementan las tecnologías abiertas?, ¿cómo es la participación en el proceso?, ¿qué aprendizajes, conocimientos y desafíos se producen al implementar los modelos abiertos?, ¿qué potencialidades y limitaciones tiene este modelo de desarrollo? El análisis permitió formular y describir modalidades de diseño abierto y participativo que respondan a experiencias implementadas en la actualidad contribuyendo a identificar estrategias de apertura y participación adecuadas. La investigación presenta como idea rectora que los procesos de desarrollo tecnológico abiertos reportan beneficios en la resolución de problemáticas debido a que solucionan problemas complejos con pocos recursos y bajo costo, utilizan la inteligencia colectiva de involucrados, aceleran el ciclo de innovación en relación a los modelos de innovación convencionales y brindan la posibilidad de generar diseños adaptables a diversos contextos. Sin embargo, a pesar de estas potencialidades, también existen dificultades, impedimentos y limitaciones. ¿Cuáles son?, ¿cómo lidian los participantes con ellas? El análisis generado permite pensar a las tecnologías abiertas y los procesos participativos como un modelo alternativo de innovación en vista de los desafíos de la agricultura, donde la disciplina del diseño tiene un rol estratégico y esencial en este tipo de procesos.
... The locus of innovation is increasingly identified in multiparty relationships where suppliers, customers, and others external entities serve as pivotal sources of innovation [13,25]. Firms must reconcile tensions and diverse interactions arising from the divergent perspectives of the value chain actors being integrated into the innovation process [26]. ...
... Researchers use the term to signify two key aspects: knowledge is disperse among diverse actors and locations, and innovation occurs outside focal firms, distributed to stakeholders within a community [11,12]. Distributed innovation, recognized for enhancing the system through knowledge flow and collaboration, involves not only buyers and suppliers but also users and rivals [11,25]. The distributed nature of innovation implies an increased interdependence and interaction among actors for successful outcomes [69]. ...
... GVC is characterized by collaboration and co-creation, interdependence and interconnection, free knowledge flow, and sharing that enable successful outcomes [11,13,25]. GVCs serving as a channel for knowledge flow can enable knowledge transfer and sharing among GVC participants. ...
How does a firm’s value chain digitalization contribute to its innovation in value chains? This study investigates innovation activities in value chains from a combination of distributed innovation perspective and technology affordance theory. We posit that a digital value chain (DVC) plays a pivotal role in driving distributed innovation in value chains. Our focus is specifically directed toward exploring the interconnected dynamics of the DVC, global value chain (GVC), and diversification strategy, elucidating the influence of their interactions on a firm’s distributed innovation in value chains. Leveraging the data of 862 manufacturing firms from the World Bank Enterprise Survey (WBES) in China, our empirical analysis reveals several key findings: (1) value chain digitalization positively influences distributed innovation in value chains and GVC embeddedness, (2) GVC embeddedness enhances distributed innovation in value chains, and (3) product diversification serves as a positive moderator, strengthening the effects of both value chain digitalization and GVC embeddedness on distributed innovation in value chains. In summary, this paper deepens our understanding of the relationships between DVC, GVC, diversification strategy, and distributed innovation in value chains. Our research provides theoretical and policy implications for digitalization and innovation strategies which are significant sources of sustainable development for firms and GVCs.
... According to the OI paradigm, companies should develop ways to listen to their customers and turn them into co-creators of the organization, incorporating the knowledge captured from them actively into innovation processes (Dobni et al., 2022a). In this spectrum, Von Hippel (2005) launches the Lead-User method, through which he exemplifies the first way in which consumers can be integrated into innovation processes. The method allowed highlighting how communities can innovate for their benefit and how their capabilities increase as they become more involved. ...
... Consequently, knowledge attraction and capture find resonance in OI's emphasis on collaborative partnerships and user-centered innovation (Nonaka et al., 2009;Von Hippel, 2005). The application of the SECI model of KD at the external level of the organization allows the creation of an environment of trust, exchange of knowledge, and continuous learning (Bratianu & Bejinaru, 2020;Chesbrough, 2006), a vision that perfectly aligns with the central objective of OI, to attract, document and use external knowledge in all stages of innovation. ...
The article investigates from an analytical perspective the relationship between knowledge dynamics and open innovation and their influence on today's business environment. The present study starts from the premise that the development of a fluid and constant flow of knowledge exchange outside the organization influences the processes of open innovation. Allowing the rapid adaptation of organizations to the new effervescent demands of the market and consumers. The addition brought by this paper represents a conceptual expansion of the need to understand the possible implications of external and internal knowledge, of a rational, emotional, or spiritual nature, on the processes of development of new strategies, products, and services. There is no substantial information available in the specialized literature about the two concepts, which highlights the need to develop more qualitative and quantitative research in this direction. Using the bibliometric analysis with VOSviewer software, the paper presents a series of results that can be further developed and analyzed. The first perspective highlighted by this study is the potential of emotional, rational, and spiritual knowledge to improve relationships with consumers as a result of implementing a constant flow of communication. This fact is supported by the symbiotic relationship between the role of knowledge dynamics in encouraging the exchange of knowledge between consumers and organizations that stimulates an open, transparent communication environment focused on continuous learning. The study also emphasizes the involvement of collaboration, adaptability, and dynamic capabilities to explore how knowledge dynamics influence and stimulate innovative culture.
... At this point it is often referred to the democratization of invention and innovation that made this movement possible in the first place. (Blikstein 2014;Hippel 2005) With regard to the success of the internet, the democratization of the digital space has opened up many opportunities for makers and hackers and as a result spurred entrepreneurship and economic growth. (Anderson 2012) Recent research highlights, that the promising possibilities of transferring this movement into the physical space, might create opportunities beyond imagination and could be a starting point for the 'next industrial revolution'. ...
... Looking at research on userinnovation, the diffusion of innovations still remains relatively undeveloped. This assumption is rooted in the believe that users do have primarily non-economic motives and are not able to compete with manufacturers that could use the economics of scale (Hienerth et al. 2014;Hippel 2005) However, especially with regard to entrepreneurship, diffusion is a decisive factor (de Jong et al. 2015). Products, services and processes developed by users are more beneficial to society when they are used by others who can benefit from them. ...
... El término innovación abierta se ha hecho popular a partir de los trabajos de [7]. Aunque también podemos citar trabajos previos de [8,9], un investigador del MIT que sin mencionar explícitamente el término innovación abierta, ha desarrollado el concepto de la innovación desde distintas fuentes en su trabajo [8]. Más tarde profundizó la importancia de las comunidades de innovación y su interacción en el trabajo [9] La innovación abierta es un modelo de innovación que no posee una definición exacta, pero podemos afirmar que se trata de innovar a partir de inputs del mercado, compartir estándares de fabricación, interfaces y modelos de gestión con otras empresas (incluso competidoras en el mismo sector) puede permitir una mayor velocidad para la innovación por la reducción de costos y riesgos asociados a los procesos de I+D+i. ...
... Aunque también podemos citar trabajos previos de [8,9], un investigador del MIT que sin mencionar explícitamente el término innovación abierta, ha desarrollado el concepto de la innovación desde distintas fuentes en su trabajo [8]. Más tarde profundizó la importancia de las comunidades de innovación y su interacción en el trabajo [9] La innovación abierta es un modelo de innovación que no posee una definición exacta, pero podemos afirmar que se trata de innovar a partir de inputs del mercado, compartir estándares de fabricación, interfaces y modelos de gestión con otras empresas (incluso competidoras en el mismo sector) puede permitir una mayor velocidad para la innovación por la reducción de costos y riesgos asociados a los procesos de I+D+i. Como existen economías de plataforma, tal como mencionamos en el apartado anterior, cuanto mayor sea el número de participantes mejor será la funcionalidad de la plataforma. ...
RESUMEN En el trabajo a presentar describimos la experiencia de digitalización industrial en una empresa de la industria alimenticia. El objetivo de esta disertación es mostrar la importancia y la forma en que las empresas pueden potenciar su capacidad innovadora aprovechando el conocimiento interno y externo, trabajando de forma colaborativa entre el personal propio de la empresa y agentes capacitados en industria 4.0 y metodologías ágiles. La propuesta técnica contiene tanto hardware, software y servicios digitales habilitados para IoT (Internet of Things) que siguen los principios clave de diseño de interoperabilidad, flexibilidad, apertura y as-a-service (SaaS). Para llevar a cabo el proyecto utilizamos una plataforma low code de Siemens basada en la nube, y para la conexión hardware se instaló una puerta de enlace industrial IoT. La plataforma Mindsphere se puede conectar a herramientas periféricas, como Telegram y Grafana para ampliar los servicios ofrecidos según los requerimientos del cliente, por ejemplo, el envío de alertas a través de Telegram. Actualmente, el caso está en la etapa de evolución de la analítica descriptiva, hacia una analítica prescriptiva con resultados favorables orientados a los objetivos de la empresa. Entre los cuales se destacan los tableros (dashborads) que permiten la gestión visual de la producción en tiempo real. Por último, la aceptación de esta transformación digital fue acompañada con la implementación de la metodología de la co-creación dónde las personas involucradas son vinculadas de manera activa al diseño de la solución. ABSTRACT The work to be presented describes the experience of industrial digitalization in a food industry. The objective of this paper is to show the importance, and the way in which companies can enhance their innovative capacity by taking advantage of internal and external knowledge, working collaboratively between the company's own personnel and agents trained in industry 4.0 and agile methodologies. The technical proposal contains both hardware, software and digital services enabled for IoT (Internet of Things) that follow the key design principles of interoperability, flexibility, openness and as-a-service (SaaS). To carry out the project we used a cloud-based Siemens low code platform, and an industrial IoT gateway was installed for the hardware connection. The Mindsphere platform can be connected to peripheral tools, such as Telegram and Grafana, to expand the services offered according to customer requirements, for example, sending alerts via Telegram. Currently, the case is in the stage of evolution from descriptive analytics, towards prescriptive analytics with favorable results oriented to the company's objectives. Among which are the dashboards that allow visual management of production in real time. Finally, the acceptance of this digital transformation was accompanied by the implementation of the co-creation methodology where people involved are actively linked in the design of the solution.
... It should be noted that the field of open innovation has expanded considerably, involving a range of innovation practices and expanding the scope of analysis at all levels of the company, from the individual level to the societal level (Bogers et al. 2018). Links have been made with open source (West and Gallagher 2006), distributed user innovation (Hippel 2005), open strategy and open science (Chesbrough 2017). ...
... In sub-Saharan Africa, it is increasingly recognised that users play an important role in the innovation process (von Hippel 2005(von Hippel , 2007. Social innovation carried out based on the needs of sub-Saharan African countries shares many characteristics with other types of non-technological innovation concepts. ...
Innovation is becoming an important issue in international development cooperation. As the main driving force behind innovation had been the profit-seeking behavior of the firm, integrating innovation in the activities of international development cooperation requires a new framework. Here in this study, concept of social innovation was explored to create a framework so that role of each actor – government, private sector, civil society – are identified to facilitate collaboration to respond social challenges in developing countries, while international cooperation agency act as an intermediary. The validity of framework was tested using a project implemented in Africa and Japan by the Japan International Cooperation Agency. The case demonstrates how innovation can be approached by international cooperation agency, acting as an intermediary, stimulating innovation not only in the recipient but also in the donor country.
... Se pueden identificar cuatro escenarios en el modelo abierto según (Chesbrough, 2003;Chesbrough y Bogers,2014;Howe, 2006;Von Hippel, 2005): ...
Cuando una compañía ofrece y sostiene una propuesta de valor peculiar al mercado, es porque dispone de una estructura competitiva; pero para lograrla es esencial la gestión de la innovación. Pese a la transcendencia de esta última, algunas empresas encuentran limitantes para materializarla, principalmente por ausencia de recursos, así como capacidades internas. El propósito de la investigación fue estudiar la Innovación Abierta como una alternativa para aquellas organizaciones que presentan obstáculos en la gestión y en la consecución de resultados. En el manuscrito se presentan concepciones, estrategias, aplicaciones del modelo abierto de innovación; además de los resultados del análisis bibliométrico de la producción científica sobre Innovación Abierta y gestión, generada desde el año 2007 hasta el 2019 en la base de datos Scopus. Los macro datos fueron trabajados en la aplicación Bibliometrix, obteniendo los nombres de autores influyentes, las fuentes de publicación más relevantes, así como los países dominantes en la temática. El documento refleja la pertinencia de la IA como factor clave en la competitividad de las compañías, implicándoles una mayor relación colaborativa con su entorno. Los hallazgos muestran la viabilidad de la Innovación Abierta como factor clave en la competitividad, implicando a las compañías la búsqueda de vínculos colaborativos con actores de su entorno.
... The limits of expert support for business decisionmaking in commercialization … Lead users might facilitate the marketing process are they are commercially attractive based on the evidence that such users anticipate relatively high benefit from obtaining the solution to their need and are at the leading edge of important market trends (Franke et al., 2006;von Hippel, 2005). ...
Innovations provide a competitive advantage for modern organizations. However, commercializing innovations can be a significant and costly challenge that requires specific knowledge and considerable resources. Therefore, companies need to prioritize the most significant ones. Responding to the relevance, the article examines enablers of innovation commercialization. In the study, innovation experts, including business consultants and professionals, gave priority to theoretically based factors of innovation commercialization using AHP and RII methods. The study found that expert decision support is limited in helping to make decisions. Experts agree on the least significant factors of innovation commercialization but disagree on the priority ones. Furthermore, the study demonstrates that the level of ambition within an organization's activities is a crucial factor in determining the priority of innovation commercialization. These results invite a fresh perspective on the expert assistance.
... Forming an understanding of the nature and antecedents of the public acceptability of fusion (like other energy and non-energy technologies) is important given the influence that publics can have on the fate of technology [6,20,[25][26][27]. This is particularly true within Westernised democracies (like the countries of interest to this study), where publics are more empowered to influence decision-making at both national and community levels (e.g. through electoral voting or local activism), and where consumer preferences can affect the deployment, use and commercial success of technologies at the household level [28][29][30]. ...
... In industrial and commercial innovation bridging the gap between designers and users of new products and services is a common theme. Firms or individual consumers who modify or develop products have become an increasingly important source of innovations that may be commercialised (Von Hippel, 2005). The influential notion of open innovation urges businesses to seek commercial success by inviting customers to co-create with them (Chesbrough, 2011). ...
... These can support how the technology should work and allow for connectedness within and outside the firm. Another position is the critical role of a community of innovation in aiding digital entrepreneurship efforts (Chesbrough et al., 2014;von Hippel, 2005). There is a need for continued synergy between technology and the community to allow for digital entrepreneurship success. ...
Researchers have widely recognized the vital role of technology within the small business context. This recognition appears actuated by a set of related local and international drivers. These drivers include (and are not limited to) globalization affecting business operations. Some have even argued that introducing technology within the business space is a new form of globalization. However, as far back as the nineteenth century, calls to explore the role technology could play in leveraging business performance, especially among small businesses, began to take center stage. This has led to growing calls for the need to understand how organizations may need to respond to this new form of globalization. We explore the capabilities as motivators that influence the success of digital entrepreneurship on the African continent. A systematic literature review was conducted. A total of twenty articles from the African continent were included in the analysis. Notably, the factors needed for digital entrepreneurship success include the need to balance human and technology capabilities, summarized as a Context-Structure-Technology (CST) nexus. Based on this finding, the chapter proffers suggestions on how digital entrepreneurship development can be supported. The findings can be helpful to policymakers in their quest to propel the digital entrepreneurship space on the African continent.
... Platforms (e.g. Github, Instructabels, GrabCad etc.) have become established and enable participants to further develop or publish their own artefact related information and designs [6], whereas a decade ago studies only analysed less than a hundred open-source designs, simply because there were not more available [7]. Today, numerous of artefact related information and designs can be retrieved at various levels of complexity [8]. ...
Recent crises have exposed the fragility of our global, linear value chains, prompting a shift towards more sustainable models that meet ecological, economic, and social demands. The concept of producing locally at the point of need within adaptable, dynamic manufacturing networks is gaining traction. Although building such structures can be labor-intensive, leveraging existing networks of small and medium-sized enterprises (SMEs) in many industrial nations could facilitate this transition. The integration of Cross-Company Production (CCP) in local networks and digital open development processes can harness collective intelligence across company boundaries, although these platforms currently lack their own production capacities. Combining Co-Creation Communities (CCC) with CCP networks could overcome these limitations. Efficient market production requires early knowledge exchange between development and production, typically ensured through standardized processes in Planning Preparation (PP), part of Operations Planning and Scheduling (OPS). However, this exchange faces challenges due to high fluctuation and the involvement of numerous companies and developers. A meta-synthesis of known innovation and product development processes has been conducted to better understand their structure and to devise measures for effective PP. Following Cooper's Stage-Gate Process principles, a set of relevant measures is established, leading to the recognition of the need for a distributed and agile PP approach.
... Even though participatory design as an approach has been acknowledged in a wide range of disciplines (with different levels of technological engagement), the technological aspects of innovations in participatory design activities have always been of fundamental importance, whether as supporting infrastructure for participatory design activities or as the final outcome of participatory design actions [1]. Although the term "democratizing innovation" [23] is a relatively new concept within information systems literature, the main rationale for the participatory design approach was to democratize workplaces in Scandinavia in the late 1970s. This was accomplished by engaging the organizational workers in the ISD process [8]. ...
... The concept of open innovation advocates for enterprises to actively cross organizational boundaries and seek external innovation resources, achieving complementarity between internal and external innovation resources. Since the 1970s, scholars, spearheaded by Professor Eric Von Hippel, have introduced a pioneering viewpoint that emphasizes the pivotal role of users as innovators in the innovation process [27]. This perspective has furnished enterprises with a theoretical foundation to incorporate user resources and engage in innovation. ...
In the realm of open innovation, users have emerged as a significant external source of innovation that enterprises cannot afford to overlook. Implemented ideas play a pivotal role in driving the iterative innovation of products within enterprises. However, the existing literature still lacks an exploration of specific impact mechanisms on contributions in idea implementation. This study presents a model that delineates the impact of user personality traits on idea implementation contributions, drawing upon theories such as personality trait theory, user engagement perspective, and trait activation theory. Empirical research was carried out by utilizing user data obtained from the Chinese high-tech company Xiaomi’s MIUI community. Personality trait indicators were developed through the application of text mining and machine learning techniques. To evaluate the models, a negative binomial regression model, which is well-suited for handling discrete data, was employed. The findings of this study indicate that user openness and conscientiousness positively influence their idea implementation contribution, whereas neuroticism has a negative impact on implementation contribution. Additionally, it is observed that user engagement plays a partial mediating role in the relationship between openness, conscientiousness, neuroticism, and idea implementation contribution. Community incentives can positively moderate the impact of user engagement on the relationship between conscientious personality and idea implementation contribution. This study expands the analysis of the impact mechanism of user idea implementation contributions, which has important theoretical guidance and practical implications for accurately identifying leading users in open innovation communities and enhancing user innovation contributions.
... Products and services driven business model transformations (through innovation) -Scholars have pondered on why companies do basic research (Ashish Kline & Rosenberg, 2010). User-centered innovation is a powerful phenomenon and becoming an important rival to manufacturercentered innovation (Levitt, 1960;Von Hippel, 2005). To remain competitive, companies diversify their portfolio into products or services that are identified for potential growth (Cooper, 1983;Johnson & Lafley, 2010). ...
In response to modern-day disruptions and to maintain competitiveness and viability, companies embark on corporate transformation journeys to enhance performance and boost organizational health. When transformations succeed, they fundamentally boost a company’s key business drivers. This article is a first step in providing prescriptive literature to transforming companies that they can use to navigate their journey. The article defines the three components of corporate transformations business model transformation, digital-enabled transformation, and organizational transformation - and their interdependencies. The study is based on the systematic review of literature available on the components of corporate transformations which is mostly unidimensional and leads to the consolidation of the components into a framework. It also describes the strategic routes of corporate transformations (mesa-transformation and meta-transformation). The framework is applicable for academic research and for practitioners when diagnosing companies, strategizing their transformations, and planning their transformation journeys.
... Scholars have pondered on why firms do basic research (Ashish Arora, Belenzon, & Sheer, 2017;Rosenberg, 2010). User-centered innovation is a powerful phenomenon and becoming an important rival to manufacturer-centered innovation (Levitt, 1960;Von Hippel, 2005). To escape intense competition, organizations seek growth options beyond conventional new product development (Cooper, 1983;M. ...
In response to disruptions, non-digital-native companies embark on corporate transformation journeys. Research done indicate that most companies fail to survive such journeys. So, why success varies among those companies, potentially costing the global economy trillions of dollars? My hypothesis is that those who orchestrate the three components of a corporate transformation (Business model transformation, Digital enabled transformation, and Organizational transformation) are more successful in their transformation journey compared to companies who don’t. By conducting a case study research, I validated my hypothesis and developed a prescriptive orchestration framework that will allow non-digital-native companies not only successfully navigate their corporate transformation journey but also switch their transformation to always-on.
... Typically, experts at the top of the pyramid will suggest a specialist in an equivalent sector as they may not be conscious of anyone with more expertise in their own realm (Von Hippel 2005). ...
Cities across the globe are facing many social and environmental sustainability challenges, during the 20th century. New forms of urban regeneration strategies have been developed to address the urban issues. However, many solutions are still based on long-term visions influenced by the managerial approaches and less attention is given to the entrepreneurial process and the social capital.
Changing the approach from the managerial systems to the entrepreneurial approach is a new initiative that aims to produce creative innovation in our cities. This thesis shows the potential of entrepreneurial mindsets in the urban upgrading of the cities. The architects’ orientation must be shifted to an entrepreneurial approach to broaden the forms of development in the city. They have a common need to improve the implementation of their existing integrated urban areas using many types of interventions whether physical or social. Their role as individuals should not be perceived as a failure in the field of entrepreneurship nor in the urban regeneration process.
The introduction of an “Entrepreneurial design process” will act as a new analytical tool to broaden role of the architects in their respective societies. That will produce many social and economical values for their cities. The analytical tool will be developed with the overlap of some traditional aspects from the design thinking process along with the entrepreneurial process in order to help the architects understand the different contexts for opportunities. Thus, creating innovative projects that address critical urban issues.
The analytical framework will be analyzed on the case of De Ceveul in Amsterdam in order to introduce new possibilities that could be studied in the Egyptian context. With the observation of several cases in Cairo, the paper will also highlight some of the existing cases and reflect on many missing anchors in the city that could be developed.
... The transformation from homogeneous product manufacturing to personalized product customization has become a new development trend (von Hippel, 2005). To meet the personalized demands of consumers, organizations often seek creative solutions through digital technology and platforms (Teece, 2018). ...
This article uses a complex network evolution model to analyze the impact of the proportion of personalized demand population and willingness to pay on the diffusion of enterprise digital strategies through digital simulation. The research results show that (1) the proportion of the population and willingness to pay have a positive effect on promoting the diffusion of enterprise digitization, but the latter’s effect has a marginal diminishing effect; (2) willingness to pay cannot guarantee 100% industrial digitization. When these two factors are low, the diffusion of enterprise digitization will fail, and the degree of failure is influenced by the concentration, degree, and distribution of competition; (3) in general, the overall average revenue of enterprises is positively correlated with the proportion of the population and willingness to pay, but the latter has a relatively small effect on digital diffusion. Therefore, the following two policy recommendations are proposed: to strengthen demand-side structural reform, to reasonably allocate consumer demand, and to promote the diffusion of industrial digitization and avoid excessive competition among enterprises. This article expands the theory of industrial digitization from the perspectives of market demand and innovation diffusion and from the demand side to provide references for constructing effective policies for the development of industrial digitization in the digital economy.
... Resorts use innovation in its different forms -product/service, process, market and organizational -to create competitive advantage to achieve better results and de ne long-term success (Christensen, 1997;Shaqrah, 2010). Therefore, the advantage of innovation is that it generates a value proposition for guests, and bene ts those who develop it through the generation of higher revenues (Hippel, 2005). ...
Purpose: The main goal of innovation is to improve guest service and products and also guest satisfaction. Taking into account the four types of innovation recognized by organization for economic cooperation and development, the purpose of this research is to understand how innovation effect on guest satisfaction, specifically in the hospitality industry.
Design/methodology/approach: The data collection was done through qualitative (interview) and quantitative methods (questionnaire). For the quantitative data processing, the Statistical Package for Social Science software was used through statistical inference methods.
Findings: The results show the effect of the four dimensions of innovation on guest satisfaction. These results confirm previous studies on the effect of service, marketing and process innovation on guest satisfaction. However, the results also show the positive relation between guest satisfaction and organizational innovation as well as the relationship between organizational innovation and the other types of innovation.
Research limitations/implications: The results of this study were based only on one resort. The extension to other cases may strengthen the results.
Practical implications: The confirmation that guest satisfaction is associated with innovation, in its four dimensions, can contribute to better decision-making, not only for the resort in the study but also for the sector.
Originality/value: Focusing on understanding the relation between the rate of innovation and its effect on guest satisfaction, the study expands the knowledge about the importance of services innovation on a specific resort in Hurghada City.
... However, the increased demand for innovation has led firms to incorporate external knowledge into their NPD processes (Antikainen, Mäkipää, & Ahonen 2010). To acquire new knowledge, organizations have started to involve customers, lead users, or communities in the NPD process, relying on their creativity and innovation capabilities (Von Hippel 2005). This phenomenon has led to more open NPD processes, and an increasing number of companies have adopted the Open Innovation (OI) paradigm (Chesbrough 2003). ...
Given the widespread diffusion of open innovation (OI) initiatives that rely on student contributions, we aim to investigate how students' motivations for attending OI initiatives connect and interact. To this end, we conducted two studies using the laddering technique with a sample of 59 students who participated in two OI programs held in different contexts: ICARO, a business-oriented program carried out before and after the COVID-19, and TEN, a social innovation program conducted during the pandemic to help people cope with the effects of COVID-19. Our results reveal two motivational maps, illustrating commonalities and differences in motivational orientations, and highlighting core and contextual motivational structures. Our study provides evidence for the value of adopting a structural perspective on motivations and presents a comprehensive and replicable methodology for assessing motivations.
... At the same time, the role of the citizen has also changed, as someone who acquires an active position and, as a driver of innovation, contributes to the creation of value [60]. The inhabitants need to take initiative and participate in the different projects taking place in their municipality. ...
As digital technology has become an integral part of urban life’s daily operations, the urban landscape is constantly evolving with the needs of its society. This new reality has allowed municipalities to invest in technologies related to smart cities and to exert a greater influence on the national and local economy. In line with this, the paper aims to understand the mechanisms of planning and implementing a municipality’s strategy in Greece to exploit the smart city benefits and to foster economic development. It is important to identify the role of different factors including strategy during the planning and implementing phases of initiatives concerning the economy and innovation in a smart city. To achieve this, data were collected via a questionnaire and processed using the advanced statistical technique PLS-SEM. The main findings highlight the importance of planning initiatives aligned with the needs of the municipality and the business ecosystem. The existence of a smart city strategy has a catalytic effect on the final impact of the implemented initiatives on the urban ecosystem. A systematic analysis of the smart cities’ dynamics and the new state of the urban ecosystem can help the local actors focus on value creation and public service provision, fostering innovation and profitability.
... Early studies relevant to the concept of co-creation focused on lead users as innovators (von Hippel 2001(von Hippel , 2005. Related concepts include open innovation (Chesbrough 2003) and crowdsourcing (Howe 2009). ...
... This understanding is misleading, however, on two accounts. First of all, artefacts can and do initiate new creative processes in the case of creators, who can be inspired to pursue the development of a series, and users, who might be prompted to adapt the artefacts to their own needs and effectively recreate them (see, for instance, discussions of user innovation, see Von Hippel 2005). On the other hand, an artefact itself is never a fully finished or stabilized form. ...
Innovation pertains to every aspect of life and impacts in some way on every individual. Innovation and the means by which it is achieved through scientific research should ultimately then be a societal activity. The collective needs of society may be addressed as market opportunities for innovation but despite this public research globally is dominated by science-supply, with agendas dictated by scientific curiosity, interest and questions of technical merit rather than public need. The question of who innovation is for then needs to consider the type, role, motivations and training of researchers, approaches to and organisation of research, and how its categorisation can influence its delivery to its stakeholders—to society. What emerges from such a societal-centred approach is that interdisciplinarity more readily becomes ‘a given’ and the priority needs of the ‘customer’ more self-evident.
The rapid adoption of generative AI powered by large language models like OpenAI's ChatGPT and Anthropic's Claude promises to disrupt innovation for the consumer Internet of Things (IoT). To understand potential consumer behaviors and marketing strategies, we use an assemblage theory framework to analyze the coevolution of consumer and marketer roles in shaping consumer IoT ecosystems like the smart home. Our framework investigates how different consumer‐ and marketer‐driven territorialization and deterritorialization strategies work to stabilize and destabilize the smart home assemblage. We contrast highly territorialized smart homes characterized by preprogrammed behaviors and clear boundaries, with highly deterritorialized DIY smart homes exhibiting unpredictable behaviors and fuzzy boundaries. Our analysis evaluates how consumers territorialize through habit formation, personalization, and sharing experiences, while marketers territorialize by emphasizing reliability, integration, and clear use cases. Consumers deterritorialize by modifying and hacking devices, and integrating nonstandard products, while marketers deterritorialize by disrupting compatibility or targeting new segments. We also integrate flow theory as an interpretive framework for understanding consumer motivations to territorialize and deterritorialize and argue that the oscillation between states of consumer anxiety and boredom create dynamic smart home identities. Our assemblage theory perspective permits a novel strategic framework that can be applied to anticipate consumer and marketer impacts on smart home evolution.
Innovation studies have shown a growing interest in collaborative approaches, particularly user co-creation within innovation spaces. This qualitative study delves into the intricate dynamics of user involvement in fostering user-centric innovation within living labs. Through interviews with 22 informants across 14 countries from 2021 to 2022, this study presents a comprehensive framework outlining four pivotal phases of involvement: recruitment, motivation, co-creation, and relation. Through a nuanced exploration of the critical factors shaping each, the research illuminates ongoing debates and consensus surrounding the orchestration of the co-creation process and the vital role of living labs in cultivating innovations. By offering insights into the co-creation process with users, the study underscores the approaches adopted by living labs to achieve sustainable outcomes in user-centric innovation. These findings provide valuable knowledge that can aid practitioners in navigating challenges related to user engagement, thereby advancing user-centric innovation initiatives.
Collaborating is increasingly characterized by working across domains and organizations. Teams rapidly form and dissolve, actors and settings frequently change, yet most academic research focuses on stable organizations and team configurations with familiar domains. This leads to the question: how do people successfully collaborate across domains and organizations in circumstances where there is little shared knowledge? We explored this question within the nascent digital health sector when Hacking Health—a non-profit organization—used an open innovation approach to bring together actors from different domains and organizations in temporary spaces to spur new collaborations. We found that actors faced many challenges and engaged in four interconnected types of knowledge work to address them: exploring, complementing, mapping, and modeling. This article reveals how Hacking Health’s open innovation approach used different kinds of temporary spaces to progressively orient actors in their knowledge work to develop sustainable collaborations to create digital health solutions.
Purpose
This research paper aims to provide a comprehensive overview of the determinants influencing organisations decisions to adopt crowdsourcing. By synthesising existing literature, it seeks to identify critical factors that act as enablers or inhibitors in the adoption process and propose a framework for understanding crowdsourcing adoption within organisational contexts.
Design/methodology/approach
This study employed a systematic literature review methodology to examine the determinants influencing organisations' decisions to adopt crowdsourcing. The review encompassed research articles from the Web of Science and Scopus databases, spanning 2006 to 2021. Additionally, morphological analysis was conducted to categorise the identified determinants into three distinct contexts: technological, organisational and environmental. This methodological approach facilitated a comprehensive exploration of the factors shaping crowdsourcing adoption within organisational settings, allowing for a nuanced understanding of the phenomenon across different dimensions.
Findings
The study identifies 12 determinants influencing crowdsourcing adoption, categorised into technological, organisational and environmental dimensions. These determinants include technological compatibility, organisational readiness, top management support, crowd readiness and availability of third-party platforms. While some determinants primarily act as enablers, others exhibit dual roles or serve as inhibitors depending on contextual factors.
Research limitations/implications
The findings offer valuable insights for scholars, practitioners, and organisational leaders seeking to leverage crowdsourcing as a strategic tool for innovation and competitiveness. The assessment scale of drivers and barriers developed in this research offers a systematic approach for evaluating the factors influencing crowdsourcing adoption, providing a nuanced understanding of innovation adoption dynamics. Theoretical implications include advancements in morphological analysis methodology and a nuanced understanding of innovation adoption dynamics. Managerial implications highlight strategies for enhancing organisational readiness, leveraging leadership support and mitigating adoption risks. Overall, the study provides a foundation for future empirical research and practical guidance for organisations planning to adopt crowdsourcing initiatives.
Originality/value
This research contributes significantly to crowdsourcing by presenting an integrated and theoretically grounded framework. By consolidating adoption determinants from diverse contexts, this study clarifies the understanding of crowdsourcing adoption. The framework offers practical value to managers and decision-makers, equipping them with a structured approach to assess and navigate the challenges associated with effectively adopting crowdsourcing. As such, this study contributes to advancing crowdsourcing practices and supports more informed managerial decision-making in innovation and knowledge sourcing.
Zusammenfassung
Die digitale Gestaltung in der Verbraucherinformatik stellt den Menschen und seine Konsumpraktiken in den Gestaltungsmittelpunkt. Dieses Kapitel erläutert gängige Designansätze und -vorgehen in der Software-Artefaktgestaltung und diskutiert die nutzer:innenzentrierten Kriterien und Ziele, die durch die Gebrauchstauglichkeit (Usability) und das Nutzungserlebnis (UX) maßgeblich bestimmt werden. Mit Rückbezug auf soziale Praktiken werden diese und die gesellschaftliche Partizipation im Allgemeinen als Designmaterial vorgestellt. Abschließend werden in zwei Design Case Studies explorative Designansätze zur Gestaltung neuer Technologien exemplarisch erläutert und diskutiert.
This paper provides a brief overview of the concepts of collective invention, user innovation, and open innovation. All three terms describe variants of distributed innovation processes and can be linked to further ideas of socioeconomic decentralization. First, the conceptual differences between collective invention, user innovation, and open innovation are elaborated. Second, exemplary case studies from the past decades are presented before more recent forms of distributed innovation in the development of information technologies are discussed. In this context, it becomes evident that distributed innovation processes and internal research and development activities in public and private sector organizations are not in competition with each other but rather in a complementary relationship.
Reward‐based crowdfunding provides a rich arena for co‐creation, where different types of dialogues between backers and project initiators aid crowdfunding performance. Nevertheless, research on how backers' co‐creation, in the form of comments, influences crowdfunding performance is still scarce. Based on signaling theory, this research investigates the impact of backers' specific co‐creation comments (we coded comments for co‐ideation, co‐evaluation, and co‐design) on crowdfunding performance. The present study also examines whether the timing of posting co‐creation comments influences associated performance benefits. We used a panel dataset of 446 reward‐based crowdfunding projects with 7254 observation days. The results show that backers' co‐ideation and co‐evaluation activity leads to a higher funding amount. Furthermore, the impact of co‐ideation is higher for comments made early in the project's lifecycle, while the effect of co‐design is wholly contingent on the time of commenting, with early co‐design comments contributing negatively to crowdfunding performance.
We develop a representation of creative evolution in economics based on the theory of the adjacent possible. We start by introducing an epistemological framework for economic theorizing that copes with unknowability and the unlistability of possibility spaces. From this framework, we discuss the use of knowledge in creatively evolving systems and derive four main results: that local knowledge is itself a mechanism of movement through the adjacent possible; that all action is entrepreneurial action; that causality is ambiguous; and that individuals can agree to disagree. We then apply these results to decision-making, innovation, and the emergence of institutions and commons in creatively evolving systems.
Innovation has traditionally been studied under a goods-dominant (G-D) logic perspective, focusing on product designs and innovations in production, manufacturing, and traditional value chain functions. However, with the development of information technologies and the increasingly competitive business service environment, a services-dominant (S-D) logic has emerged, emphasizing relational interactions among network stakeholders (e.g. partners, suppliers, and customers). Using a services-dominant (S-D) logic perspective coupled with a resource-based perspective, this study examines how resources and capabilities influence innovative strategy, leading to enhanced innovative performance. Employing 200 valid survey data using questionnaires from firms located in Vietnam, this study confirms that basic operant resources and dynamic capabilities significantly affect firms’ innovation performance either directly or indirectly through a mediation effect of S-D logic orientation.
Open Innovation is a recognised management approach, and although many companies are aware of it, there is still a lack of clear understanding of the mechanisms, inside and outside of the organisation to gain value from it in practice. Open Innovation literature argues that it is not new, not yet making it clear how companies can capture value out of their Open Innovation process. Based on a two-tier research methodological approach, the concept of Technology Valorisation is explored, and this research builds upon research from a series of company interviews in the Scottish Medical Technology (Med-Tech) sector, exploring their Open Innovation practices in action. This chapter reveals that companies are too tied up with their daily activities and are not actively engaging in Technology Valorisation. Theories associated with Open Innovation are commonplace; however, they are not considered applicable theory for companies to deliver on the value of Open Innovation in practice. Companies in the Med-Tech sector are operating Open Innovation practices to a varying degree; however, this research signals the need for a new framework for practice which is necessary to guide companies through the Open Innovation processes more effectively with Technology Valorisation embedded, which can enable organisations to capture fuller value from their innovation processes.
Traditional indicators, such as R&D expenditures and patent applications, are not necessarily the most relevant to measure the innovative capability of companies. Hence, this study aims at understanding how the conversion of ideas and inventions into commercialisation of products and services is managed, with an emphasis on internal processes and structures. To this purpose, a question sheet and a guide for semi-structured interviews have been developed derived from the model for the dynamic adaptation capability. Surprisingly, the findings from five French and five Scottish firms point to differences in innovative capabilities between French and Scottish firms that can be understood from autopoietic principles (following the law of parsimony) and the myopic versus dynamic approach for the context of the national innovation system. Additionally, the extent of the instrument indicates that a major effort is required to understand the innovative capabilities of firms and that this cannot be reduced to simplified measures as traditionally done.
The aim of this chapter is to clarify what competences are needed for individuals to innovate within European living labs. Living labs are user-centric and open-innovation approaches that aim at enhancing the acceptability of new products and services. In Europe, the concept has been adopted in particular as a way of reinforcing citizens’ well-being by involving them in the early phases of living lab projects. Moreover, living labs are also seen as a way to improve the innovation capabilities of organisations. However, to date, research focusing on innovation capabilities at an individual level is scarce. Hence, in this chapter, we first present the concepts of co-creation and open innovation, and the living lab, before showing the link between organisation and individual capability. We then conduct a systematic literature review using the Web of Science and Scopus databases to understand the components of individual innovation capabilities in the context of European living lab approaches. We extracted 11 publications that we analysed to obtain a classification of categories of individual innovation competences. The study reveals some differences from broader previous studies on individual innovation capability, namely the importance of social competences and that of meta-competences such as adaptability, as well as the essential role of facilitators. This review is a first step towards evaluations of living labs. It could serve as a checklist for practitioners as well as for researchers. Moreover, it offers a better understanding of the importance of co-creation to enhance Europe’s innovation capacity.
Changing climate threatens our water systems: Droughts, fires, and floods disrupt access to safe water and no country is immune. The aging infrastructure crisis offers an opportunity to build resiliency into our future water systems with approaches like (non-)potable reuse. Such strategies require participation by end-users, which we propose can be championed by water utilities through: (1) Raising awareness of water challenges, (2) education about current water realities and opportunities, and (3) providing resources to implement and sustain water solutions.
The global proliferation and escalating threat posed by major tech corporations, notably Facebook and Google, have engendered considerable scholarly debate. Notably, these corporations have recently made substantial investments in journalistic endeavors to cultivate healthier relationships with news media. On a global scale, Google has channeled substantial sums of money into pioneering technological initiatives, delineating the trajectories of technological advancement through initiatives like the Google News Initiative (GNI) Innovation Challenge and other forms of fiscal and institutional backing extended to news organizations. Grounded in the realms of Innovation Management and Responsible Innovation theories, this chapter scrutinizes the 224 recipients of the inaugural three iterations of the GNI Innovation Challenges across regions including Asia-Pacific, Latin America, the Middle East and Africa, as well as North America. The findings unveil a substantial portion of the awarded projects centering on innovative news products. Nevertheless, only a scant representation of Responsible Innovation attributes, such as foresight, introspection, and adaptability, is discernible within these projects. In summation, this study advocates for an augmented partnering model characterized by greater transparency and sustainability concerning the allocation of financial and technological resources in collaboration with big tech companies.
This research addresses the use of crowdfunding platforms for the development of video games in Spain. It is part of the group of platform-centred research in order to develop a quantitative analysis of the data contained in them. Specifically, the data provided by Kickstarter for Spanish video game development projects is analysed. Normality tests indicated that the variables do not follow a normal distribution, hence non-parametric tests were used. The success rate of Spanish campaigns is 28.4% for the total number of cases, 40.8% in 2020, which is a steady growth since 2015. The average funding is €16,586.76, €50,056.67 for successful campaigns; however, the median indicates that 50% of the sample does not exceed €1,653 in funding. Regression models are used to develop equations to calculate the amount of funding needed to publish on PC and console, and the number of backers needed to achieve a given amount of funding.
This research addresses the use of crowdfunding platforms for the development of video games in Spain. It is part of the group of platform-centred research in order to develop a quantitative analysis of the data contained in them. Specifically, the data provided by Kickstarter for Spanish video game development projects is analysed. Normality tests indicated that the variables do not follow a normal distribution, hence non-parametric tests were used. The success rate of Spanish campaigns is 28.4% for the total number of cases, 40.8% in 2020, which is a steady growth since 2015. The average funding is €16,586.76, €50,056.67 for successful campaigns; however, the median indicates that 50% of the sample does not exceed €1,653 in funding. Regression models are used to develop equations to calculate the amount of funding needed to publish on PC and console, and the number of backers needed to achieve a given amount of funding.
The process of user-centered innovation: how it can benefit both users and manufacturers and how its emergence will bring changes in business models and in public policy.
Innovation is rapidly becoming democratized. Users, aided by improvements in computer and communications technology, increasingly can develop their own new products and services. These innovating users—both individuals and firms—often freely share their innovations with others, creating user-innovation communities and a rich intellectual commons. In Democratizing Innovation, Eric von Hippel looks closely at this emerging system of user-centered innovation. He explains why and when users find it profitable to develop new products and services for themselves, and why it often pays users to reveal their innovations freely for the use of all.The trend toward democratized innovation can be seen in software and information products—most notably in the free and open-source software movement—but also in physical products. Von Hippel's many examples of user innovation in action range from surgical equipment to surfboards to software security features. He shows that product and service development is concentrated among "lead users," who are ahead on marketplace trends and whose innovations are often commercially attractive.
Von Hippel argues that manufacturers should redesign their innovation processes and that they should systematically seek out innovations developed by users. He points to businesses—the custom semiconductor industry is one example—that have learned to assist user-innovators by providing them with toolkits for developing new products. User innovation has a positive impact on social welfare, and von Hippel proposes that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. The goal of a democratized user-centered innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license.
The customer or user’s role in the new product development process is limited or nonexistent in many high technology firms, despite evidence that suggests customers are frequently an excellent source for new product ideas with great market potential. This article examines the implementation of the Lead User method for gathering new product ideas from leading edge customers by an IT firm that had not previously done much customer research during their new product development efforts. This case study follows the decision-makers of the firm through the process, where the end result is the generation of a number of useful product concepts. Besides the ideas generated, management at the firm is also impressed with the way the method makes their new product development process more cross-functional and they plan to make it a part of their future new product development practices. Approximately one year later the firm is revisited to find out if the Lead User method has become a permanent part of their new product development process. The authors find, however, that the firm has abandoned research on the customer despite the fact that several of the lead-user derived product concepts had been successfully implemented. Management explanations for their return to a technology push process for developing new products include personnel turnover and lack of time. Using organizational learning theory to examine the case, the authors suggest that the nontechnology specific product concepts generated by the lead users were seen as ambiguous and hence overly simplistic and less valuable by the new product development personnel. The technical language spoken by the new product personnel also increased the inertia of old technology push development process by making it more prestigious and comfortable to plan new products with their technology suppliers. The fact that the firm was doing well throughout this process also decreased the pressure to change from their established new product development routine. The implications for these finding are that: 1) it is necessary to pressure or reward personnel in order to make permanent changes to established routines, and 2) researchers should be careful at taking managers at their word when asking them about their future intentions.
This study analyzes the value created by so-called “toolkits for user innovation and design,” a new method of integrating customers into new product development and design. Toolkits allow customers to create their own product, which in turn is produced by the manufacturer. In the present study, questions asked were (1) if customers actually make use of the solution space offered by toolkits, and, if so, (2) how much value the self-design actually creates. In this study, a relatively simple, design-focused toolkit was used for a set of four experiments with a total of 717 participants, 267 of whom actually created their own watches. The heterogeneity of the resulting design solutions was calculated using the entropy concept, and willingness to pay (WTP) was measured by the contingent valuation method and Vickrey auctions. Entropy coefficients showed that self-designed watches vary quite widely. On the other hand, significant patterns still are visible despite this high level of entropy, meaning that customer preferences are highly heterogeneous and diverse in style but not completely random. It also was found that consumers are willing to pay a considerable price premium. Their WTP for a self-designed watch exceeds the WTP for standard watches by far, even for the best-selling standard watches of the same technical quality. On average, a 100% value increment was found for watches designed by users with the help of the toolkit. Taken together, these findings suggest that the toolkit's ability to allow customers to customize products to suit their individual preferences creates value for them in a business-to-consumer (B2C) setting even when only a simple toolkit is employed. Alternative explanations, implications, and necessary future research are discussed.
Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The "lead user process" takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities--- and we find that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after five years---more than eight times higher than forecast sales for the average contemporaneously conducted "traditional" project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.
It is known that end users of products and services sometimes innovate, and that innovations developed by users sometimes become the basis for important newcommercial products and services. It has also been argued and to some extent shown that such innovations will be found concentrated in a “lead user” segment of the user community. However, neither the characteristics of innovating users nor the scope of the community that they “lead” has been explored in depth.
In this paper, we explore the characteristics of innovation, innovators, and innovation sharing by library users of OPAC information search systems in Australia. This market has capable users, but it is nonetheless clearly a “follower” with respect to worldwide technological advance. Wefind that 26% of users in this local market nonetheless do modify their OPACs in both major and minor ways, and that OPAC manufacturers judge many of these user modifications to be of commercial interest. We find that we can distinguish modifying from nonmodifying users on the basis of a number of factors, including their “leading-edge status” and their in-house technical capabilities. We find that many innovating users freely share their innovations with others, and find that we can distinguish users that share information about their modifications from users that do not. We conclude by considering some implications of our findings for idea generation practices in marketing.
The motives of 141 contributors to a large Open Source Software (OSS) project (the Linux kernel) was explored with an Internet-based questionnaire study. Measured factors were both derived from discussions within the Linux community as well as from models from social sciences. Participants’ engagement was particularly determined by their identification as a Linux developer, by pragmatic motives to improve own software, and by their tolerance of time investments. Moreover, some of the software development was accomplished by teams. Activities in these teams were particularly determined by participants’ evaluation of the team goals as well as by their perceived indispensability and self-efficacy.
The "open source development process" has received considerable attention. It means that loosely co-ordinated, geographically dispersed developers collaborate. While in prototypical open source projects developers are unpaid volunteers, the involvement of commercial firms has recently increased enormously. There are some areas of open source software where indeed most contributions come from commercial firms, and even from firms which consider the development of open source software their core business. It is particularly surprising that these firms take part in the open source development process, as it implies informal collaboration with competitors and the revealing of own developments. The present paper analyzes this phenomenon. It presents an empirical analysis of the embedded Linux industry, based on in-depth interviews with embedded Linux companies and industry experts. It is found that firms in this industry do indeed reveal a considerable share of their developments, and benefit in turn from what their competitors make public.
"Discusses how the Internet revolution has produced a powerful counterrevolution. The explosion of innovation we have seen in the environment of the Internet was not conjured from some new, previously unimagined technological magic; instead, it came from an ideal as old as the nation. Creativity flourished there because the Internet protected an innovation commons. The Internets very design built a neutral platform upon which the widest range of creators could experiment. The legal architecture surrounding it protected this free space so that culture and information--the ideas of our era--could flow freely and inspire an unprecedented breadth of expression. But this structural design is changing, both legally and technically."
The economics of knowledge is a rapidly emerging subdiscipline of economics that has never before been given the comprehensive and cohesive treatment found in this book. Dominique Foray analyzes the deep conceptual and structural transformation of our economic activities that has led to a gradual shift to knowledge-intensive activities. This transformation is the result of the collision of a longstanding trend—the expansion of knowledge-based investments and activities—with a technological revolution that radically altered the production and transmission of knowledge and information. The book focuses on the dual nature of the economics of knowledge: its emergence as a discipline (which Foray calls "the economics of knowledge") and the historical development of a particular period in the growth and organization of economic activities ("the knowledge-based economy").
Recently, a "lead user" concept has been proposed for new product development in fields subject to rapid change (von Hippel [von Hippel, E. 1986. Lead users: A source of novel product concepts. Management Sci. 32 791--805.]). In this paper we integrate market research within this lead user methodology and report a test of it in the rapidly evolving field of computer-aided systems for the design of printed circuit boards (PC-CAD). In the test, lead users were successfully identified and proved to have unique and useful data regarding both new product needs and solutions responsive to those needs. New product concepts generated on the basis of lead user data were found to be strongly preferred by a representative sample of PC-CAD users. We discuss strengths and weaknesses of this first empirical test of the lead user methodology, and suggest directions for future research.
Modding – the modification of existing products by consumers – is increasingly exploited by manufacturers to enhance product development and sales. In the computer games industry modding has evolved into a development model in which users act as unpaid “complementors” to manufacturers’ product platforms. This article explains how manufacturers can profit from their abilities to organize and facilitate a process of innovation by user communities and capture the value of the innovations produced in such communities. When managed strategically, two distinct, but not mutually exclusive business models appear from the production of user complements: firstly, a manufacturer can let the (free) user complements “drift” in the user communities, where they increase the value to consumers of owning the given platform and thus can be expected to generate increased platform sales, and secondly, a manufacturer can incorporate and commercialize the best complements found in the user communities.
Users of products and services often make product-related innovations that become taken-for-granted product features. Early research in this area found that while product users--be they firms or individuals--innovated, it was existing manufacturers who commercialized the innovation. Users benefited from using the innovation they created, while existing manufacturers reaped the financial rewards. More recent empirical work and anecdotal evidence however finds that users innovate and sometimes also start firms to produce the innovation for sale to others; thereby allowing the innovator to profit from her innovation both financially and through use. What accounts for this discrepancy in empirical findings--and more importantly what does this imply for existing models of entrepreneurship and industry emergence? In order to begin addressing these questions, this paper proposes a theoretical model that identifies the factors that influence user-innovators to start their own firms, that is, to become entrepreneurs or license their work rather than share their work with existing manufacturers. We illustrate our model with examples from the field of consumer sporting goods.
What is the status of the Free and Open Source Software (F/OSS) revolution? Has the creation of software that can be freely used, modified, and redistributed transformed industry and society, as some predicted, or is this transformation still a work in progress? Perspectives on Free and Open Source Software brings together leading analysts and researchers to address this question, examining specific aspects of F/OSS in a way that is both scientifically rigorous and highly relevant to real-life managerial and technical concerns.
The book analyzes a number of key topics: the motivation behind F/OSS—why highly skilled software developers devote large amounts of time to the creation of "free" products and services; the objective, empirically grounded evaluation of software—necessary to counter what one chapter author calls the "steamroller" of F/OSS hype; the software engineering processes and tools used in specific projects, including Apache, GNOME, and Mozilla; the economic and business models that reflect the changing relationships between users and firms, technical communities and firms, and between competitors; and legal, cultural, and social issues, including one contribution that suggests parallels between "open code" and "open society" and another that points to the need for understanding the movement's social causes and consequences.
Perspectives on Technology consists of papers written by Nathan Rosenberg over a ten-year period, from the early 1960s to the early 1970s. Their origin was in Professor Rosenberg's interest in long-term economic growth processes and, especially, in the behaviour of industrializing societies. The form and direction which this book has taken reflect two basic influences: (1) a growing awareness of the centrality of technological phenomena in generating economic growth, and (2) a growing sense that, in spite of the basic and genuine insights into technological phenomena provided by the neo-classical economics, a deeper and richer understanding of the phenomena can only be achieved by a willingness to step outside the limited intellectual boundaries of this mode of reasoning.
Currently, two models of innovation are prevalent in organization science. The “private investment” model assumes returns to the innovator result from private goods and efficient regimes of intellectual property protection. The “collective action” model assumes that under conditions of market failure, innovators collaborate in order to produce a public good. The phenomenon of open source software development shows that users program to solve their own as well as shared technical problems, and freely reveal their innovations without appropriating private returns from selling the software. In this paper, we propose that open source software development is an exemplar of a compound “private-collective” model of innovation that contains elements of both the private investment and the collective action models and can offer society the “best of both worlds” under many conditions. We describe a new set of research questions this model raises for scholars in organization science. We offer some details regarding the types of data available for open source projects in order to ease access for researchers who are unfamiliar with these, and also offer some advice on conducting empirical studies on open source software development processes.
Currently, two models of innovation are prevalent in organization science. The "private investment" model assumes returns to the innovator result from private goods and efficient regimes of intellectual property protection. The "collective action" model assumes that under conditions of market failure, innovators collaborate in order to produce a public good. The phenomenon of open source software development shows that users program to solve their own as well as shared technical problems, and freely reveal their innovations without appropriating private returns from selling the software. In this paper, we propose that open source software development is an exemplar of a compound "private-collective" model of innovation that contains elements of both the private investment and the collective action models and can offer society the "best of both worlds" under many conditions. We describe a new set of research questions this model raises for scholars in organization science. We offer some details regarding the types of data available for open source projects in order to ease access for researchers who are unfamiliar with these, and also offer some advice on conducting empirical studies on open source software development processes.
In this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure for the firm.1 In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature, such as the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness-of-markets problem.
Product R&D at many companies is a major bottleneck. The difficulty is that fully understanding the needs of just a single customer can be an inexact and costly process - to say nothing of the needs of all customers or even groups of them. In the course of studying product innovation across many industries, authors Stefan Thomke and Eric von Hippel have found several companies that have adopted a completely new, seemingly counterintuitive, approach to product R&D. Essentially, these companies have abandoned their efforts to understand exactly what products their customers want; instead, they equip customers with tool kits to design and develop their own products. Doing so can create tremendous value, but capturing that value is hardly a simple or straightforward process. Not only must a company develop the right tool kit, but it must also revamp its business models and management mind-set. When companies relinquish a fundamental task-such as designing a new product-to customers, the two parties must redefine their relationship, and this change can be risky. With custom computer chips, for instance, companies traditionally captured value by both designing and manufacturing innovative products. With customers taking over more of the design, companies must now focus more on providing the best custom manufacturing. In other words, the location where value is created and is captured changes, and companies must reconfigure their business models accordingly. This article offers basic principles and lessons for industries undergoing such transformations.
With sincere thanks to Eric von Hippel and Nana Admadjaja, the many innovators who gave graciously of their time, and my wonderful family and friends. Responsibility for all views expressed lies with the author.
"Lead users" are defined as being at the leading edge of markets, and as having a high incentive to innovate. Empirical research has shown the value of lead user need and solution data to new product development processes. However, the nature of the lead user construct itself has not been studied to date. In this paper we fill this significant gap by proposing and evaluating a continuous analog to the lead user construct, which we call leading edge status (LES). We establish the validity and reliability of LES and examine the characteristics of users having high levels of this variable. We also offer a first exploration of how LES is related to traditional measures in diffusion theory such as dispositional innovativeness and time of adoption (TOA). We find a strong relationship and explain how users with high LES can offer a contribution to both predicting and accelerating early product adoption.
In this paper we report on the results of a study of the effort and motivations of individuals to contributing to the creation of Free/Open Source software. We used a Web-based survey, administered to 684 software developers in 287 F/OSS projects, to learn what lies behind the effort put into such projects. Academic theorizing on individual motivations for participating in F/OSS projects has posited that external motivational factors in the form of extrinsic benefits (e.g.: better jobs, career advancement) are the main drivers of effort. We find in contrast, that enjoyment-based intrinsic motivation, namely how creative a person feels when working on the project, is the strongest and most pervasive driver. We also find that user need, intellectual stimulation derived from writing code, and improving programming skills are top motivators for project participation. A majority of our respondents are skilled and experienced professionals working in IT-related jobs, with approximately 40 percent being paid to participate in the F/OSS project.
Empirical findings illustrate that users in industrial markets often play a dominant role in invention of new products. However, little is known about the innovation activities of end users in the field of consumer goods. The author reports on a survey of the innovation activities and characteristics of 153 users of outdoor-related consumer products. He finds a high level of innovation by these consumers. The results also reveal that innovating users can be reliably distinguished from non-innovating ones by characteristics such as the benefit they expect from using their innovations and the level of expertise they have in the use of the products.Taken together, these two findings—frequent innovation by consumers and the possibility to identify efficiently those who innovate—imply that innovation by users can be an important source of new product ideas for consumer goods companies. Effective utilisation of this resource will require significant changes in methodologies for customer-driven idea generation.
This study contributes to our understanding of the innovation process by bringing attention to and investigating the process by which innovators outside of firms obtain innovation-related resources and assistance. This study is the first to explicitly examine how user-innovators gather the information and assistance they need to develop their ideas and how they share and diffuse the resulting innovations. Specifically, this exploratory study analyzes the context within which individuals who belong to voluntary special-interest communities develop sports-related consumer product innovations. We find that these individuals often prototype novel sports-related products and that they receive assistance in developing their innovations from fellow community members. We find that innovation-related information and assistance, as well as the innovations themselves, are freely shared within these communities. The nature of these voluntary communities, and the “institutional” structure supporting innovation and free sharing of innovations is likely to be of interest to innovation researchers and managers both within and beyond this product arena.
Scholars have long discussed the locus of innovation and its determinants. There is empirical evidence that innovations can be developed by those holding any of a number of `functional' relationships to them such as manufacturers, users, or materials suppliers. Past studies have considered two factors important in predicting the functional locus of innovation. One is `expected profit of a player involved in the innovation' and the other is `stickiness of innovation-related information.' Although some studies have shown empirically the link between an innovator's expected profits and the locus of innovation, no research has yet been conducted to test the hypothesized relationship between stickiness of innovation-related information and the locus of innovation. In the study reported upon here, I explore relationships between these two variables via a study of 24 innovations for the Japanese convenience-store industry. My study shows empirically that stickiness of innovation-related information does have the hypothesized relationship to the functional locus of innovation. I discuss implications of these findings and some directions for future research.
Conventional market research methods do not work well in the instance of many industrial goods and services, and yet, accurate understanding of user need is essential for successful product innovation. Cornelius Herstatt and Eric von Hippel report on a successful field application of a “lead user” method for developing concepts for needed new products. This method is built around the idea that the richest understanding of needed new products is held by just a few users. It is possible to identify these “lead users” and then draw them into a process of joint development of new product concepts with manufacturer personnel. In the application described, the lead user method was found to be much faster than traditional ways of identifying promising new product concepts as well as less costly. It also was judged to provide better outcomes by the firm participating in the case. The article includes practical detail on the steps that were used to implement the method at Hilti AG, a leading manufacturer of products and materials used in construction.
The purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in Britain since 1945. Most technological knowledge turns out not to be “information” that is generally applicable and easily reproducible, but specific to firms and applications, cumulative in development and varied amongst sectors in source and direction. Innovating firms principally in electronics and chemicals, are relatively big, and they develop innovations over a wide range of specific product groups within their principal sector, but relatively few outside. Firms principally in mechanical and instrument engineering are relatively small and specialised, and they exist in symbiosis with large firms, in scale intensive sectors like metal manufacture and vehicles, who make a significant contribution to their own process technology. In textile firms, on the other hand. most process innovations come from suppliers.These characteristics and variations can be classified in a three part taxonomy based on firms: (1) supplier dominated; (2) production intensive; (3) science based. They can be explained by sources of technology, requirements of users, and possibilities for appropriation. This explanation has implications for our understanding of the sources and directions of technical change, firms' diversification behaviour, the dynamic relationship between technology and industrial structure, and the formation of technological skills and advantages at the level of the firm. the region and the country.
This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the ‘separation and control’ issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears these costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.The directors of such [joint-stock] companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.Adam Smith, The Wealth of Nations, 1776, Cannan Edition(Modern Library, New York, 1937) p. 700.
Manufacturers customarily provide only a few product variants to address the average needs of users in the major segments of markets they serve. When user needs are highly heterogeneous, this approach leaves many seriously dissatisfied. One solution is to enable users to modify products on their own using “innovation toolkits.” We explore the effectiveness of this solution in an empirical study of Apache security software. We find high heterogeneity of need in that field, and also find that users modifying their own software to be significantly more satisfied than non-innovating users. We propose that the “user toolkits” solution will be useful in many markets characterized by heterogeneous demand.
Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product’s technology is shared, not exclusive. In that case I show that if patent standards are low, firms build “thickets” of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of “mutual non-aggression.” Then R&D incentives are stronger, even optimal.
Innovation is rapidly becoming democratized. Users, aided by improvements in computer and communications technology, increasingly can develop their own new products and services. These innovating users—both individuals and firms—often freely share their innovations with others, creating user-innovation communities and a rich intellectual commons. In Democratizing Innovation, Eric von Hippel looks closely at this emerging system of user-centered innovation. He explains why and when users find it profitable to develop new products and services for themselves, and why it often pays users to reveal their innovations freely for the use of all. The trend toward democratized innovation can be seen in software and information products—most notably in the free and open-source software movement—but also in physical products. Von Hippel's many examples of user innovation in action range from surgical equipment to surfboards to software security features. He shows that product and service development is concentrated among "lead users," who are ahead on marketplace trends and whose innovations are often commercially attractive. Von Hippel argues that manufacturers should redesign their innovation processes and that they should systematically seek out innovations developed by users. He points to businesses—the custom semiconductor industry is one example—that have learned to assist user-innovators by providing them with toolkits for developing new products. User innovation has a positive impact on social welfare, and von Hippel proposes that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. The goal of a democratized user-centered innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license.
This paper argues that what Robert Allen has termed collective invention settings (that is, settings in which competing firms share technological knowledge) were a crucial source of innovation during the early phases of industrialisation. Until now this has been very little considered in the literature, which has focused on the patent system as the main institutional arrangement driving the rate of innovation. The paper presents one of these collective invention settings, the Cornish mining district, in detail. It studies the specific economic and technical circumstances that led to the emergence of this collective invention setting and analyses its consequences on the rate of technological innovation. Copyright 2004, Oxford University Press.
In the traditional new product development process, manufacturers first explore user needs and then develop responsive products. Developing an accurate understanding of a user need is not simple or fast or cheap, however. As a result, the traditional approach is coming under increasing strain as user needs change more rapidly, and as firms increasingly seek to serve “markets of one.”
Toolkits for user innovation is an emerging alternative approach in which manufacturers actually abandon the attempt to understand user needs in detail in favor of transferring need-related aspects of product and service development to users. Experience in fields where the toolkit approach has been pioneered show custom products being developed much more quickly and at a lower cost. In this paper we explore toolkits for user innovation and explain why and how they work.
To solve a problem, needed information and problem-solving capabilities must be brought together. Often the information used in technical problem solving is costly to acquire, transfer, and use in a new location—is, in our terms, “sticky.” In this paper we explore the impact of information stickiness on the locus of innovation-related problem solving. We find, first, that when sticky information needed by problem solvers is held at one site only, problem solving will be carried out at that locus, other things being equal. Second, when more than one locus of sticky information is called upon by problem solvers, the locus of problem solving may iterate among these sites as problem solving proceeds. When the costs of such iteration are high, then, third, problems that draw upon multiple sites of sticky information will sometimes be “task partitioned” into subproblems that each draw on only one such locus, and/or, fourth, investments will be made to reduce the stickiness of information at some locations.
Information stickiness appears to affect a number of issues of importance to researchers and practitioners. Among these are patterns in the diffusion of information, the specialization of firms, the locus of innovation, and the nature of problems selected by problem solvers.
Includes bibliographical references (leaf 17).
Firms and governments are increasingly interested in learning to exploit the value of lead user innovations for commercial advantage. Improvements to lead user theory are needed to inform and guide these efforts. In this paper we empirically test and confirm the basic tenants of lead user theory. We also discover some new refinements and related practical applications. Using a sample of users and user-innovators drawn from the extreme sport of kite surfing, we analyze the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead user characteristics those users display. We provide a first empirical analysis of the independent effects of its two key component variables. In our empirical study of user modifications to kite surfing equipment, we find that both components independently contribute to identifying commercially attractive user innovations. Component 1 (the "high expected benefits" dimension) predicts innovation likelihood, and component 2 (the "ahead of the trend" dimension) predicts both the commercial attractiveness of a given set of user-developed innovations and innovation likelihood due to a newly-proposed innovation supply side effect. We conclude that the component variables in the lead user definition are indeed independent dimensions and so neither can be dropped without loss of information - an important matter for lead user theory. We also find that adding measures of users' local resources can improve the ability of the lead user construct to identify commercially-attractive innovations under some conditions. The findings we report have practical as well as theoretical import. Product modification and development has been found to be a relatively common user behavior in many fields. Thus, from 10% to nearly 40% of users report having modified or developed a product for in-house use in the case of industrial products, or for personal use in the case of consumer products, in fields sampled to date. As a practical matter, therefore, it is important to find ways to selectively identify the user innovations that manufacturers will find to be the basis for commercially attractive products in the collectivity of user-developed innovations. We discuss the implications of these findings for theory and also for practical applications of the lead user construct, i.e. how variables used in lead user studies can profitably be adapted to fit specific study contexts and purposes.
In a study of innovations developed by mountain bikers, we find that user-innovators almost always utilize "local" information - information already in their possession or generated by themselves - to assess the need for and to develop solutions for their innovations. We argue that this finding fits the economic incentives operating on users. Local need information is the most relevant to user-innovators, since the bulk of their innovation-related rewards typically come from in-house use. Local solution information that is already "in stock" is preferred because it can be applied to innovation-related problem-solving at a relatively low cost. Our findings suggest that innovation development is distributed among users in an economical way: user-innovations tend to be developed by "low-cost providers." It also suggests that the likely function and solution type employed in most user innovations can be predicted on the basis of preexisting user activity patterns and stocks of solution-related information. This in turn opens the way to new methods for efficiently screening user populations for the presence of innovations of any specified type
The literature on new goods and social welfare generally assumes that innovations are developed by manufacturers. But innovation by users has been found to also be an important part of innovative activity in the economy. In this paper we explore the impact of users as a source of innovation on product diversity, innovation, and welfare. We examine the impact of user innovation on inefficiencies that bias the provision of new goods, and find that most are either alleviated or non-existent for user innovation. There are three major reasons for this. First, user innovations tend to complement manufacturer innovations, filling small niches of high need left open by commercial sellers. Second, user innovation helps to reduce information asymmetries between manufacturers and users. Third, user innovations are more likely to be freely revealed than manufacturer innovations. We conclude that, compared to a counterfactual world without such innovation, social welfare is most likely to be increased by the presence of user innovation. We derive implications for policy makers and managers.
We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobility, is likely to be due to differences in levels of education in the respective regions.
This paper analyzes an area that economic analysis of intellectual property has generally ignored, namely, the effects of intellectual property rights on the relative desirability of various strategies for organizing information production. I suggest that changes in intellectual property rules alter the payoffs to information production in systematic and predictable ways that differ as among different strategies. My conclusion is that an institutional environment highly protective of intellectual property rights will (a) have less beneficial impact, at an aggregate level, than one would predict without considering these effects, and (b) fosters commercialization, concentration, and homogenization of information production, and thus entails normative implications that may be more salient than its quantitative effects.
In this study we explore the relationship between the sources of innovation and incentives to innovate in a sample of 64 innovations related to Auger and Esca, two types of scientific instrument used to analyze the surface chemistry of solid materials. We find that innovations with high scientific importance tend to be developed by instrument users, while innovations having high commercial importance tend to be developed by instrument manufacturers. We also find that the ratio of user and manufacturer innovation affecting a given type of instrument can vary as a function of that instrument type's perceived scientific and commercial importance. Finally, we find that the scientific and commercial importance of innovations developed for Auger and Esca, and the frequency with which these have been developed, have varied significantly over time.
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licenses from multiple patentees. The patent thicket is especially thorny when combined with the risk of hold-up, namely the danger that new products will inadvertently infringe on patents issued after these products were designed. The need to navigate the patent thicket and hold-up is especially pronounced in industries such as telecommunications and computing in which formal standard-setting is a core part of bringing new technologies to market. Cross-licenses and patent pools are two natural and effective methods used by market participants to cut through the patent thicket, but each involves some transaction costs. Antitrust law and enforcement, with its historical hostility to cooperation among horizontal rivals, can easily add to these transaction costs. Yet a few relatively simple principles, such as the desirability package licensing for complementary patents but not for substitute patents, can go a long way towards insuring that antitrust will help solve the problems caused by the patent thicket and by hold-up rather than exacerbating them.
Remaining within cluster variance: A meta analysis of the ?Dark? Side of cluster analysis. Working paper
- N Franke
- H Reisinger