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Bottom-up Economics. Foundations of a Theory of Distributed and Open Value Creation
Abstract
In many industries, we can observe a paradigm shift from traditional value creation towards value co-creation and open production approaches. The boundaries of companies dissolve and many more stakeholders (suppliers, customers, users, community members etc.) are integrated into the value creation process. Thus, a new understanding and taxonomy of value creation becomes necessary to serve as a reference model in order to describe new phenomena based on the principles of so-called Bottom-up Economics. In an industrial context, openness as a precondition for participation, cooperation and interaction can be seen as a critical success factor. The need for a theory of a distributed and open value creation will be revealed by integrating case observations and conceptual insights from literature that are concerned with co-creation phenomena from a Production Engineering point of view.
... Value creation is the ultimate objective of all corporations (Herskovits et al., 2013), and Climent et al. (2021) emphasize that the traditional understanding of value creation patterns assumes that the process of value creation is limited to the borders of an organization through the firm's activities. In this context, Redlich & Moritz (2016) describe the evolution of value creation, beginning with traditional methods centered on companies and passive customer roles, advancing to value creation networks for collective efficiency. They emphasize the shift towards interactive and co-creative approaches, where customers become more active participants, resulting in the dissolution of hierarchical structures and the involvement of various actors in the value creation process of a firm, including suppliers, customers, users, and community members. ...
Decentralized autonomous organizations (DAOs) are emerging innovative organizational structures, enabling collective coordination, and reshaping digital collaboration. Despite the promising and transformative characteristics of DAOs, the potential technological advancements and the understanding of the business value that organizations derive from implementing DAO characteristics are limited. This research applies a systematic review of DAOs' business applicability from an open systems perspective following a best-fit framework methodology. Within our approach, combining both framework and thematic analysis, we discuss how the open business principles apply to DAOs and present a new DAO business framework comprising of four core business elements: i) token, ii) transactions, iii) value system and iv) strategy with their corresponding sub-characteristics. This paper offers a preliminary DAO business framework that enhances the understanding of DAOs' transformative potential and guides organizations in innovating more inclusive business models (BMs), while also providing a theoretical foundation for researchers to build upon.
... Value creation is the attempt of an actor to increase value, while value capture is the process of securing pecuniary or non-pecuniary returns from value creation (Chesbrough et al., 2018). The focus on how value is created has changed over time from company internal value creation over value creation in networks and interactive value creation to value co-creation between companies and their trading partners (Redlich & Moritz, 2016). ...
Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially, non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance, in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholders’ different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFT’s value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.
... To conclude, the era of value co-creation emerged, in which consumers, known as "prosumers," actively participate in the production process (Ramaswamy & Ozcan, 2020). This shift necessitates innovative concepts, such as open innovation and crowdsourcing, as well as a bottom-up economics framework that emphasizes decentralization, interconnectedness, and collaboration between participants (Redlich & Moritz, 2016, Redlich, Moritz & Wulfsberg, 2019. ...
This research paper provides a comprehensive exploration of the role of Artificial Intelligence (AI) in value creation within the e-commerce sector, focusing on how task and information complexity affect AI deployment. It first outlines the historical development of value theory and value creation, highlighting the shift from traditional modes to modern interactive and co-creation models. Following this, the paper delves into AI’s potential in various e-commerce dimensions including personalization, product recommendation, supply chain efficiency, and more. The centrepiece of the study is a detailed matrix classifying AI into Automated Intelligence, Assisted Intelligence, and Augmented Intelligence, based on the complexity of tasks they execute and the information they analyse. This research study engaged a panel of fifteen industry and academic experts to critically examine and assign complexity scores to various Artificial Intelligence applications within the e-commerce and similar sectors. The experts evaluated task and information complexity, thereby enabling a classification of the applications into a comprehensible matrix. This classification not only provides a guide for AI system design and evaluation but also enhances understanding of their functional dynamics. The paper contributes theoretically by advancing our understanding of AI as a value creator in e-commerce and practically by offering a roadmap for businesses to adopt and leverage AI technologies. As AI continues to revolutionize the e-commerce sector, the findings of this study provide invaluable insights for businesses seeking to gain a competitive advantage in the digital marketplace.
... Altogether, these initiatives framed the concept of open source hardware (OSH) that extends the well-established approach to intellectual property management in open source software to the realms of physical artifacts [2]. This implements an alternative approach to conventional product development that bears a formidable potential for organizational and business innovation [3]. ...
This standard delivers an unambiguous and operational definition of the concept of open source hardware and breaks it down into objective criteria for judging the compliance of a piece of hardware with this definition.
This standard sets requirements for technical documentation. It is designed to be complementary to existing standards and guidelines for technical documentation (e.g. VDI 4500) and is not aimed at superseding them. It focuses on the aspects of the technical documentation that are related to its compliance with the principles of open source.
The principles and definitions provided by the DINSPEC3105-1 “Open source hardware — Part1:Requirements for technical documentation” set a frame for the DINSPEC3105-2 “Open source hardware — Part2: Community-based assessment”[9] which in turn sets concrete and practical requirements for the establishment of assessment procedures.
This document builds upon the OSHWA Definition 1.0 and the Open Source Definition.
... Many industries undergo a paradigm shift towards open and collaborative approaches in value creation enabled by widely disseminated and advanced ICT [1][2][3][4]. New companies and business models based on openness are putting pressure on established actors forcing them to open up, too [5,6]. Ever since, external actors may enter the domain of (industrial) value creation turning from passive consumers to active prosumers [7,8]. ...
Co-creation with users in online communities proved to be a powerful means for product innovation. Crowdsourcing ideas in a contest setting within a community represents an effective method to gather a variety of ideas within a short time and with reasonable financial investment. Users benefit as well. They can be part of industrial value creation, enjoy interacting with a company and socializing with other users, and win a prize. Interestingly, many users not only compete for prizes, but also collaborate with others by giving feedback and exchanging ideas. Thus, we find high heterogeneity among users which asks for adequate community management (incentives, facilitation, communication etc.). In this study, we explore user roles and communication patterns in an industrial design contest community by applying cluster analysis based on network measures and content analysis. Four user roles were found that differ in communication and contribution behavior.
... Many industries undergo a paradigm shift towards more open and collaborative approaches in value creation enabled by widely disseminated and advanced (IC) technologies. [1,2,3,4] New companies and business models based on openness are putting pressure on established actors forcing them to open up too. [5,6] Ever since, outsiders (amateurs, experts, customers etc.) can enter the domain and be part of industrial value creation. ...
The item "motivation" (fig. 6) in this paper is incorrect. Please see this file for corrected result. I am sorry!
... Many industries undergo a paradigm shift towards more open and collaborative approaches in value creation enabled by widely disseminated and advanced (IC) technologies. [1,2,3,4] New companies and business models based on openness are putting pressure on established actors forcing them to open up too. [5,6] Ever since, outsiders (amateurs, experts, customers etc.) can enter the domain and be part of industrial value creation. ...
Web-based collaboration (co-creation) between companies and users proved to be a powerful concept of value creation for innovation related aspects like idea generation, product development and problem solving. One form of co-creation is represented by so-called innovation/idea/design contests where an organization initiates a web-based competition by posting a problem or task and invites people to submit their solutions or concepts on a platform. Interestingly, it was shown that even in a competitive challenge environment where the winner takes all, collaboration among users via commenting and feedback has been observed. The concept of “communitition” proposed by Hutter et al. claims that collaboration and competition (co-opetition) may co-exist in innovation contests and having a positive influence on the challenge outcome. In this paper and with regard to the concept of “communitition”, we present selected findings from the user survey conducted in the community of the “Airbus Cargo Drone Challenge” which was held and hosted by Local Motors in 2016. Our results show that participating users have a competitive attitude (motivation, expectation, compensation) on the one hand, but behave in a collaborative manner in the course of the challenge on the other hand, thus, confirming the existence of co-opetition in innovation contests.
Data and information are the oil of the digital age; industrial and service robots and intelligent algorithms are becoming a decisive production factor and will have a lasting impact on classic value creation. At the same time, however, they also create new opportunities for entrepreneurial value creation, thus influencing industry and market structures. This article explains the changes in entrepreneurial value creation through the targeted use of digital technologies. In particular, the influences of hardware and software robotics, intelligent algorithms and advanced analytics are discussed and classified. Based on this, examples are used to demonstrate disruptions in the entrepreneurial value chain. The resulting changes and their consequences are discussed by using examples. The changing demands on the market, industry structures, and business models with their business processes in these value creation structures are highlighted. To conclude the article, changes in value creation are outlined by using the example of the healthcare sector.
The purpose of this paper is to examine and analyze how the Fourth Industrial Revolution (4IR) contributed to economic growth and development in South Africa. It argues that the 4IR is a pathway to achieve economic growth and development. Although much emphasis from the literature indicates the negative impact of the 4IR on human development, this paper brings to light that the 4IR is an engine to the headway of economic development. To get the expected results, desktop research is used, covering South Africa as an area of focus. Hence, it adopted a literature-based methodology that relies on the use of existing literature to critique the role of the 4IR in enhancing economic development. It reveals that the 4IR is detrimental to human development, however, it can be used as a catalyst for economic growth and development. It thus recommends that the 4IR must be fully embraced by both the government and private sector for the betterment of economic development and business growth amongst others.
As new patterns on how to think of innovation and organization develop one can observe that the boundaries of companies dissolve more and more towards more open and collaborative practices. This article examines one part of this overall development, namely the opportunities as well as challenges of open production sites and the many ways companies are trying to integrate them not only into existing innovation processes but also into production processes. Incorporating or integrating such methods into existing corporate structures offers the opportunity of working with state of the art technology collaboratively, together with tinkerers, makers, engineers, architects, artists or artisans, and therefore to really “think outside the box”. Fostering innovative practices and production by integrating and exploiting the potential of more open ways of producing and innovating will very likely lead to a more sustainable and economical production of goods and services.
Today’s societies are challenged by the increasing costs of healthcare and global inequality in the availability, accessibility, appropriateness and affordability of medical technologies. There are ways to improve equality and efficiency and decrease costs in this area without fundamentally changing current health systems and business models. Many services and products are experiencing a paradigm shift toward an open source economic model that can be extended to medical technologies in a way that will intrinsically promote sustainable growth and innovations while improving education and global health. This new way of thinking offers an infrastructure by which some sectors of global health can be democratized. Here we present an in-depth discussion of the advantages of open source medical technology for the public and private sectors, then provide a concrete example of the progress of our efforts to develop an open source magnetic resonance imaging (MRI) scanner. Based on our calculations such an instrument could potentially result in cost savings of up to $3.3 billion within about 20 years for the German healthcare system alone. On a global scale the implications of an affordable open source MRI would be even more striking. We suggest a series of milestones to be met to a widespread development of open source medical technology with the aim of improving global health in a way that is less restricted by current political and economic borders.
Web-based co-creation with users represents a promising approach for firms to improve their innovativeness, to search for unconventional solutions and very often to outperform traditional inhouse research and development (R&D). Collaborating with online communities is one way to go, using crowdsourcing contests another one. These days, we also find interesting hybrid structures in so-called contest communities that combine the best of both worlds, collaboration and competition. We present new insights from a case study on a contest community with special focus on participating users. Our results show that users greatly differ among their backgrounds, motivation and behavior and, thus, must be treated accordingly. Based on these insights, we derive management implications for firms that want to tap into co-creation.
In many industries, we observe a paradigm shift from traditional firm-centric and top-down value creation towards more open and collaborative bottom-up approaches. Firms’ boundaries dissolve, and external actors can enter the domain of industrial value creation by means of advanced information and communication technologies. Beyond that, we also find examples where people co-create value with others without industrial actors necessarily being involved (e.g. open source communities, makerspaces). Thus, rethinking business as usual in the era of bottom-up economics via the concept of co-creation offers great potentials for both, firms and prosumers.
In diesem Werk wird die Wertschöpfung der Zukunft auf Grundlage neuster Forschungsergebnisse im Rahmen eines interdisziplinären Ansatzes von Wissenschaftlerinnen und Wissenschaftlern aus den Technik-, Wirtschafts-, Sozial- und Rechtswissenschaften diskutiert. Technologische Treiber und rechtliche Aspekte werden dabei ebenso beleuchtet wie die ökonomischen und soziokulturellen Chancen und Herausforderungen, die sich infolge zunehmend kollaborativer und dezentraler Wertschöpfungsprozesse ergeben.
Der Inhalt
• Wertschöpfung weiter denken: Artefakte, Prozesse und Strukturen
• Digitale Technologien als Treiber und Befähiger
• Leben und Lernen in der Arbeitswelt von morgen
• Kollaborative Wertschöpfung als Chance für soziale, ökonomische und ökologische Nachhaltigkeit
Die Zielgruppen
• Dozierende und Studierende der Fachgebiete Wirtschafts- und Sozialwissenschaften sowie Ingenieur- und Rechtswissenschaften
• Interdisziplinär Forschende sowie Fachleute in den Bereichen Bildung, Arbeit und Wirtschaft
Die Herausgeber
Dr. Tobias Redlich ist Leiter der Arbeitsgruppe „Wertschöpfungssystematik“ am Laboratorium Fertigungstechnik an der Helmut-Schmidt-Universität Hamburg. In seiner Forschung beschäftigt er sich mit neuen Wertschöpfungsmustern.
Manuel Moritz ist Doktorand am Laboratorium Fertigungstechnik an der Helmut-Schmidt-Universität Hamburg und forscht zu kollaborativen Wertschöpfungs- und Innovationsprozessen.
Prof. Dr. Jens P. Wulfsberg leitet das Laboratorium Fertigungstechnik an der Helmut-Schmidt-Universität Hamburg.
A promising method of enhancing the circular economy is distributed plastic recycling. In this study plastic waste is upcycled into 3-D printing filament with a recyclebot, which is an open source waste plastic extruder. The recyclebot is combined with an open source self-replicating rapid prototyper (RepRap) 3-D printer, to enable post-consumer ABS plastic filament from computer waste to be further upcycled into valuable consumer products pre-designed in the digital commons. The total electrical energy consumption for the combined process is monitored and an economic evaluation is completed. The coupled distributed recycling and manufacturing method for complex products reduces embodied energy by half, while reducing the cost of consumer products to pennies. This economic benefit provides an incentive for consumers to both home recycle and home manufacture, which tightens the loop on the circular economy by eliminating waste associated from transportation and retail. It is clear from the results that waste plastic can be significantly upcycled at the individual level using this commons-based approach. This tightening of the loop of the circular economy benefits the environment and sustainability as well as the economic stability of consumers/prosumers.
Offene Werkstätten (FabLabs) ermöglichen als Teil einer soziotechnischen Bewegung, die mehr Beteiligung der Bürger an Technologie- und Produktentwicklung anstrebt, einen einfachen Zugang zu technologischem Wissen und Produktionsmitteln und bergen somit das Potential, Innovationen, Gründungsinitiativen und regionale Entwicklung zu stimulieren. Die vorliegende Studie untersucht, unter welchen Bedingungen sich diese Potentiale entfalten können und nimmt in diesem Zusammenhang die Kombination aus lokaler sozioinstitutioneller und sozioökonomischer Einbettung der physischen Orte sowie der Einbettung in eine Infrastruktur, welche die Grundlage für virtuelle Kollaboration und Wissenstransfer auf globaler Ebene schafft, in den Blick. Erste Ergebnisse verweisen auf eine deutliche Diskrepanz zwischen der Vision der Bewegung und der empirischen Realität der Labs.
Durch die webbasierte Einbindung von und Zusammenarbeit mit unternehmensexternen Individuen während der Ideengenerierung und Produktentwicklung ergeben sich für Unternehmen neue Möglichkeiten, um ihre Wettbewerbsfähigkeit zu steigern. Insbesondere Ideenwettbewerbe sind unternehmensseitig ein vielversprechendes Instrument, um in kürzester Zeit und zu vergleichsweise geringen Kosten eine große Menge an kreativen und unkonventionellen Ideen zu einer bestimmten Problemstellung zu erhalten. Zugleich können Konsumenten, Hobby-Enthusiasten, Studenten etc. nunmehr Teil der (industriellen) Wertschöpfung von Unternehmen werden. In diesem Beitrag werden die Ergebnisse einer Umfrage unter den Teilnehmern der von Local Motors ausgerichteten Airbus Cargo Drone Challenge vorgestellt. Wir finden auch in diesem eher kompetitiv ausgerichteten Wettbewerb starke Anzeichen für kollaboratives Verhalten der Nutzer, was die These bestätigt, dass es auch auf individueller Ebene eine Form von “Koopetition” geben kann.
In this chapter we point out how the general dynamics of decentralization and digitalization aggregate in two distinct ideal types of value creation: one updates the firm-based mode of a top-down approach and the other represents an alternative mode of bottom-up coordination that is more community-driven. For each mode, we contrast the most prevalent approaches to integrating novel technologies such as 3D printing and link them to innovative concepts of production. Having offered this distinction, we elaborate on associated manufacturing constellations and discuss the potential impact of hybrid arrangements.
Inhaltsverzeichnis + Einführung S. 1-19
Zwei von drei Innovationen enden in manchen Branchen als Flop. Der Grund: Die neuen Produkte und Dienstleistungen sind ganz klar am Verbraucher und am Markt vorbei konzipiert. Die Folge: hohe Kosten, schlechte Umsätze. Solche teuren Fehlinvestitionen können Sie vermeiden, wenn Sie in Ihrem Unternehmen rechtzeitig Ihre kompetentesten Berater einschalten: Ihre Kunden. Innovationen, die auf Kundenwissen aufbauen, haben deutlich höhere Erfolgs- und damit Umsatzchancen.
Wie es Ihnen gelingt, Kunden aktiv in den Innovationsprozess einzubinden, zeigt das hochkarätige Autorenteam Reichwald, Meyer, Engelmann und Walcher. Sie erfahren,
• wie Sie Kundenintegration erfolgreich managen,
• wo Sie Kundenwissen finden und wie Sie es anzapfen,
• welche Hindernisse Sie im eigenen Unternehmen zu erwarten haben und
• wie Sie internen Widerständen souverän begegnen.
The purpose of this paper is to make a contribution to a theory of value co-creation by integrating a case observation and conceptual insights from literature that are concerned with co-creation phenomena. A value creation taxonomy is introduced as a reference model which is used to describe an ongoing paradigm shift from traditional industrial production towards Bottom-up economics. On this basis, a conceptual framework is derived for comparing how traditional value chain elements might be rearranged by organizations relying on value co-creation. The underlying research work also aims to apply the authors' framework in order to illustrate how completely new business models arise and how traditional (manufacturing) companies could be enabled to make use of value co-creation patterns observed in the 36 cases under consideration. Each case is employing its own distinct approach to value creation.
Researchers and brand managers have limited understanding of the effects social media communication has on how consumers perceive brands. We investigated 504 Facebook users in order to observe the impact of firm-created and user-generated (UG) social media communication on brand equity (BE), brand attitude (BA) and purchase intention (PI) by using a standardized online survey throughout Poland. To test the conceptual model, we analyzed 60 brands across three different industries: non- alcoholic beverages, clothing and mobile network operators. When analyzing the data, we applied the structural equation modeling technique to both investigate the interplay of firm-created and user-generated social media communication and examine industry- specific differences. The results of the empirical studies showed that user-generated social media communication had a positive influence on both brand equity and brand attitude, whereas firm-created social media communication affected only brand attitude. Both brand equity and brand attitude were shown to have a positive influence on purchase intention. In addition, we assessed measurement invariance using a multi- group structural modeling equation. The findings revealed that the proposed measurement model was invariant across the researched industries. However, structural path differences were detected across the models.
The on-going paradigm shift from industrial production to value co-creation increases the importance of openness as a central competitive factor. From a systemic point of view, this means that external and internal interfaces within the value creation system need to be created in a way that knowledge can be exchanged more efficiently. However, openness in inter-organizational settings is often blocked by a lack of trust. Hence, concepts are needed to manage trust with regard to varying context-depending degrees of openness. The conceptual framework of this interpretive study is based on the theory of openness, which describes the dependency of the success of networks on the incidence of emergence. The developed concept of trust circles is based on empirical data selected from the aeronautical cluster Hamburg Aviation. It serves to identify circles of trust within the system and activate their potential to enable inter-organizational knowledge flows and new joint ventures.
Purpose – The purpose of this paper is to make a contribution to co-creation theory by integrating conceptual insights from the management and marketing literatures that are both concerned with co-creation phenomena. It aims to develop a reference model for comparing how different organizations organize and manage their co-creation ventures. It also aims to apply the authors' framework to four distinct cases that illustrate the differences in co-creation practice within different co-creation environments.
Design/methodology/approach – The authors compare four different companies based on case profiles. Each company is employing its own distinct approach to co-creating. The authors employ a method mix including literature analysis, structured interviews, document and web site analysis, as well as participation.
Findings – The reference model offers a set of useful dimensions for case-based inquiry. The case comparisons show how firms may decide to systematise and manage a mix of co-creation activities within B2B versus B2C contexts, utilising either crowd-sourced or non-crowd-sourced approaches. Further, the case comparisons suggest that there are less differences in B2B versus B2C co-creation as compared with crowd-sourced versus non-crowd-sourced approaches. Ultimately, implementation decisions in one dimension of co-creation design (e.g. whom to involve in co-creation) will affect other dimensions of implementation and governance (e.g. how much intimacy) and thus how co-creation needs to be managed.
Originality/value – The paper presents case comparisons utilising B2B versus B2C, as well as crowd versus non-crowd-sourcing examples of co-creation and an original decision support framework for assessing and comparing co-creation choices.
Introduction. The paper deals with the topic of increasing integration of individuals and companies in innovation processes by means of Web-based software platforms. We consider why people participate and contribute in platforms and the characteristics of the platforms and the possible managerial actions (i.e., the drivers for motivations) to enhance these motivations? Method. An empirical qualitative analysis of twenty important platforms, leading to a cause-effect map of drivers and motivations. Both primary data (from a Delphi study and interviews) and secondary data (documents, Website explanations, etc.) were used. Analysis. Qualitative analysis was used to examine the interactions between specific drivers for enhancing specific motivations. Results. Nine groups of drivers, classified into three groups, were found. Strategies for driving the motivations that could encourage users to play an active role in the platforms are proposed. Conclusions. The findings could be useful for community managers and platform designers because they suggest choices for platform design that could attract potentially innovative participants and sustain a high level of collaboration for innovation-related contributions.
In this paper, we discuss open design of manufacturing equipment as an approach to the design, test, and continuous improvement of modular and reconfigurable manufacturing equipment. Open design fosters collaborative efforts by providing a framework for freely sharing information such as design documentation and performance data. This paper presents the principles of open design by introducing the Open Design Definition, outlining the requirements for license agreements, and illustrating the application of open design with two current projects. The first project is the open design for a linear positioning stage intended as a foundational element in modular machines or machine tools. The second project is an aggregate machine being redesigned and reconfigured for micro EDM. Open design may become a beneficial alternative to proprietary development of machinery and manufacturing processes, especially in core or foundational elements of agile systems.
The rise of cloud computing is radically changing the way enterprises manage their information technology (IT) assets. Considering the benefits of cloud computing to the information technology sector, we present a review of current research initiatives and applications of the cloud computing paradigm related to product design and manufacturing. In particular, we focus on exploring the potential of utilizing cloud computing for selected aspects of collaborative design, distributed manufacturing, collective innovation, data mining, semantic web technology, and virtualization. In addition, we propose to expand the paradigm of cloud computing to the field of computer-aided design and manufacturing and propose a new concept of cloud-based design and manufacturing (CBDM). Specifically, we (1) propose a comprehensive definition of CBDM; (2) discuss its key characteristics; (3) relate current research in design and manufacture to CBDM; and (4) identify key research issues and future trends. 1 1 INTRODUCTION Researchers and practitioners from industry continuously strive for new efforts to remain competitive in the area of product design and manufacturing. Many of these efforts have focused on addressing new ways of product design and manufacturing from the perspective of information and resource sharing [1]. As the manufacturing enterprises become increasingly concerned with meeting the dynamic requirements of a global marketplace, capturing and sharing product-related
There is a growing sense that the Digital Divide and the role of Information and Communications Technology (ICT) in international development need to be fundamentally reconceptualized. This paper presents the composition and the rationale behind the creation of a network of fabrication laboratories, FAB LABs, whose mission is to provide concrete examples that would lay the foundation for a new framework for this reconceptualization. At the heart of this idea is the belief that the most sustainable way to bring the deepest results of the digital revolution to developing communities is to enable them to participate in creating their own technological tools for finding solutions to their own problems. Each FAB LAB consists of a collection of tools for design and modeling, prototyping and fabrication, instrumentation and testing and debugging, and documentation for a wide range of applications in formal and informal education, health and environmental monitoring, as well as economic and social development.
Crowdsourcing is a newly developed term which refers to the process of outsourcing of activities by a firm to an online community or crowd in the form of an 'open call'. Any member of the crowd can then complete an assigned task and be paid for their efforts. Although this form of labour organisation was pioneered in the computing sector, businesses have started to use 'crowdsourcing' for a diverse range of tasks that they find can be better completed by members of a crowd rather than by their own employees. This paper examines how firms are utilising crowdsourcing for the completion of marketing-related tasks, concentrating on the three broad areas of product development, advertising and promotion, and marketing research. It is found that some firms are using crowdsourcing to locate large numbers of individuals willing to complete largely menial repetitive tasks for limited financial compensation. Other firms utilise crowdsourcing to solicit solutions to particular tasks from a crowd of diverse and/or expert opinions. Conclusions are drawn regarding the advantages and the limitations of crowdsourcing and the potential for the future use of crowdsourcing in additional marketing-related applications.
Die Globalisierung und die zunehmende informationelle Vernetzung führen zu völlig neuen Mustern der Wertschöpfung, die sich unter dem Begriff „Bottom-up-Ökonomie“ zusammenfassen lassen. Sie unterscheidet sich durch eine Verschmelzung von Produktion und Konsum sowie durch verteilte Strukturen und Prozesse bei der Leistungserstellung. Dabei unterliegt sie einer Logik der Offenheit. Mit diesem Buch wird „Offenheit“ als ein Charakteristikum der Wertschöpfungssystematik untersucht und ein geeignetes Rahmenkonzept entwickelt, das produzierende Unternehmen bei der Wertschöpfungsgestaltung in einer zunehmend dynamischen Umwelt unterstützt. Es werden einerseits adäquate Modelle zur Beschreibung und Analyse von Wertschöpfungssystemen bereitgestellt, andererseits werden geeignete praktische Maßnahmen daraus abgeleitet, mit denen Wertschöpfungsaktivitäten und -strukturen in einer Bottom-up-Ökonomie erfolgreich gestalten werden können. Dabei wurden sowohl vorhandene eklektische Ansätze berücksichtigt, als auch neu gefundene Muster in ein gemeinsames Rahmenwerk integriert.
The paper discusses three key economic problems raised by the emergence of Open source: motivation, co-ordination, and diffusion.
The advent of open innovation has intensified communication and interaction between scientists and corporations. Crowdsourcing added to this trend. Nowadays research questions can be raised and answered from virtually anywhere on the globe. This chapter provides an overview of the advancements in open innovation and the phenomenon of crowdsourcing as its main tool for accelerating the solution-finding process for a given (not only scientific) problem by incorporating external knowledge, and specifically by including scientists and researchers in the formerly closed but now open systems of innovation processes. We present perspectives on two routes to open innovation and crowdsourcing: either asking for help to find a solution to a scientific question or contributing not only scientific knowledge but also other ideas towards the solution-finding process. Besides explaining forms and platforms for crowdsourcing in the sciences we also point out inherent risks and provide a future outlook for this aspect of (scientific) collaboration.
Erfolg ist kein Zufall. Die Autoren zeigen, wie es Porsche schaffte, zu einem Vorzeigeunternehmen der deutschen Wirtschaft zu werden. Weder Wirtschaftsflaute noch Börsenabsturz gingen dem Unternehmen an die Substanz - Lean Thinking sei Dank.
Technik verändert unsere Gesellschaft durch einen fortschreitenden Wandlungsprozess. Sie bewirkt eine Nutzung natürlicher Ressourcen durch die Ergebnisse wissenschaftlicher Forschung, aber auch durch Erfindungsreichtum im praktischen Gestalten. Der technische Fortschritt bestimmt nicht nur das Sachpotential der Wirtschaftswelt, er durchdringt auch massiv unsere Lebenskultur. Zunehmend ist ein Wandel von Wertvorstellungen erkennbar, der zu einem kritischen Bewusstsein führt. In diesem Zusammenhang erhalten Bildung, Wissenschaft und Politik in ihrer normativen Funktion eine zunehmende Bedeutung für die Weiterentwicklung der Technik.
Heute scheinen sich die Voraussagen von Igor Ansoff (= Surprise =) und Peter Drucker (= Managing =) aus den 60er Jahren zu bestätigen, daß wir nicht nur ein „Management of Discontinuities”, sondern auch ein „Management in Turbulent Times” zu bewältigen haben werden. Damit verbinden sich veränderte und erheblich gewachsene Anforderungen an die Führung.
This chapter presents a methodology for web-based manufacturing management and control. The methodology is a part of a WebMachining system, which is based on the e-manufacturing concept. The WebMachining virtual company encompasses three distributed manufacturing systems, all of them located in different cities in Brazil, i.e. a flexible manufacturing cell (FMC) at GRACO/UnB (Brasília), a flexible manufacturing system (FMS) at SOCIESC (Joinville), and a lathe at UFSC (Florianopolis). The methodology includes planning, scheduling, control, and remote manufacturing of components. A user (customer) uses the manufacturing services provided by the WebMachining virtual company through the Internet, in order to execute operations and processes to design and manufacture the components. The proposed methodology integrates engineering and manufacturing management through an enterprise resource planning (ERP) software that previews which of the three systems will produce the ordered component, and this decision is based on parameters related to each of the three systems. After the decision, the ERP system will generate the production schedule. Also in this work, the implementation aspects of a web-based shop floor controller for the FMC at GRACO/UnB are presented. The FMC consists of a Romi Galaxy 15M turning centre, an ASEA IRB6 robot manipulator, a Mitutoyo LSM-6100 laser micrometer, an automated guided vehicle (AGV), and a pallet to store the blank and finished components. The functional model, which depicts the modules and their relationships in the web-based shop floor controller, serves as a basic model to implement the real system. After that, the proposed implementation architecture based on the object-oriented technology is presented.
With the publication of his best-selling books "Competitive Strategy (1980) and "Competitive Advantage (1985), Michael E. Porter of the Harvard Business School established himself as the world's leading authority on competitive advantage. Now, at a time when economic performance rather than military might will be the index of national strength, Porter builds on the seminal ideas of his earlier works to explore what makes a nation's firms and industries competitive in global markets and propels a whole nation's economy. In so doing, he presents a brilliant new paradigm which, in addition to its practical applications, may well supplant the 200-year-old concept of "comparative advantage" in economic analysis of international competitiveness. To write this important new work, Porter and his associates conducted in-country research in ten leading nations, closely studying the patterns of industry success as well as the company strategies and national policies that achieved it. The nations are Britain, Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden, Switzerland, and the United States. The three leading industrial powers are included, as well as other nations intentionally varied in size, government policy toward industry, social philosophy, and geography. Porter's research identifies the fundamental determinants of national competitive advantage in an industry, and how they work together as a system. He explains the important phenomenon of "clustering," in which related groups of successful firms and industries emerge in one nation to gain leading positions in the world market. Among the over 100 industries examined are the German chemical and printing industries, Swisstextile equipment and pharmaceuticals, Swedish mining equipment and truck manufacturing, Italian fabric and home appliances, and American computer software and movies. Building on his theory of national advantage in industries and clusters, Porter identifies the stages of competitive development through which entire national economies advance and decline. Porter's finding are rich in implications for both firms and governments. He describes how a company can tap and extend its nation's advantages in international competition. He provides a blueprint for government policy to enhance national competitive advantage and also outlines the agendas in the years ahead for the nations studied. This is a work which will become the standard for all further discussions of global competition and the sources of the new wealth of nations.
Research in design creativity has focused on individual creativity and on creativity in a collaborative or organizational setting. Collective design and crowdsourcing creativity differ from individual and collaborative creative design by building on the foundations of social computing so thatindividuals are motivated to contribute voluntarily. Research that improves our understanding and support for this phenomena is a trajectory from existing creativity and design research methods and modelsthat study individuals and teams to studying crowds. Three directions for research in crowdsourcing creativity are: technology development, creative design processes, and evaluating creativity.
When most people in the United States hear the word “manufacturing,” two images come to mind. The first recalls traditional assembly lines, men sweating over machines, and long trains of mass-produced goods coming out the other end, smoke billowing from their stacks. Automobile plants circa 1950 embody this image. The second image—epitomized by automobile plants circa 2012—is of shuttered factories and blue-collar workers displaced by foreign competition.
Consequently, policy discussions about manufacturing tend to follow this same dichotomy and to rely on conventional terms, regardless of their applicability. Most debates about the future of manufacturing focus on recovering a bygone era and become a discussion of what the U.S. economy is supposed to look like: Should we have more production and less consumption? How can the United States boost exports and reduce imports? Where will the good jobs come from?
What is most disappointing about this state of affairs is that it obscures a new type of producer society that is taking shape in the cracks in the old system. This do-it-yourself (DIY) producer society, driven by grassroots movements in tinkering, entrepreneurship, and small-scale manufacturing, has the potential to transform how we think and talk about American manufacturing—as well as its role in the U.S. economy.
This, of course, is not the first article to proclaim that manufacturing is changing. Accelerating manufacturing job losses during the Great Recession have spurred much talk about restoring the U.S. position as a country that makes things. Although the United States has never stopped making things in terms of output—it remains one of the top manufacturing countries in the world and exports billions of dollars of goods each year—there is a popular notion that we have left behind the golden age of American productivity and moved away from producing physical items, choosing instead to export that function. There are frequent indignant outcries that products like the iPhone and iPad are designed but not manufactured in America or that the U.S. Olympic team uniforms carried “Made in China” labels, implying that such facts reflect America’s downward economic spiral. These cries often emerge from those who wave the ever-popular banner of needing to save American jobs. However, a close examination of this claim reveals a much more complicated economic story than that of savings-driven outsourcing.
Visions of the revival of traditional American manufacturing often include the return of lucrative jobs to American communities. However, the future of American manufacturing shouldn’t be circumscribed by a discussion of “reshoring” jobs. There is already a great deal of false hope around the re-shoring debate. For example, Boston Consulting Group released a report last year purporting to have found that, within half a decade, millions of lost manufacturing jobs would return to the United States because of rising labor costs in China. While it’s true that labor costs in China are rising consistently relative to the United States, it’s also true that labor costs constitute a falling share of manufacturing costs. The mix of labor, shipping, and energy costs will probably mean that some jobs once sent to China will return to North America; for many others, however, that calculus will not change. This is due in part to the fact that the decision of where to locate a manufacturing center is not determined by such cost measures alone.
The expectation that rising Chinese labor costs will result in the wholesale relocation of millions of jobs to the United States simplistically assumes that there is no other reason manufacturing jobs have been created elsewhere. Economists and others have long realized that the benefits of co-location—when engineering, design, and manufacturing jobs exist in the same geographic place—go well beyond job numbers. Spillovers and returns to proximity matter; moreover, when manufacturing jobs leave, the innovative potential of the remaining workers is undermined and, hence, the skills and knowledge level of the surrounding area go untapped. A recent article in Technology Review noted that A123 Systems, one of the most celebrated lithium-ion battery companies in the United States, originally located its production in China “to acquire the needed...
In an age of open source, custom-fabricated, DIY product design, all you need to conquer the world is a brilliant idea. Photo: Dan Winters The door of a dry-cleaner-size storefront in an industrial park in Wareham, Massachusetts, an hour south of Boston, might not look like a portal to the future of American manufacturing, but it is. This is the headquarters of Local Motors, the first open source car company to reach production. Step inside and the office reveals itself as a mind-blowing example of the power of micro-factories. In June, Local Motors will officially release the Rally Fighter, a 10,000 anyway. As the community coalesced around his Rally Fighter, members competed to develop secondary parts, from the side vents to the light bar. Some were designers, some engineers, and others just car hobbyists. But what they had in common was a refusal to design just another car, compromised by mass-market needs and convention. They wanted to make something original — a fantasy car come to life. While the community crafted the exterior, Local Motors designed or selected the chassis, engine, and transmission thanks to relationships with companies like Penske Automotive Group, which helped the firm source everything from dashboard dials to the new BMW clean diesel engine the Rally Fighter will use. This combination — have the pros handle the elements that are critical to performance, safety, and manufacturability while the community designs the parts that give the car its shape and style — allows crowdsourcing to work even for a product whose use has life-and-death implications.
Companies have long used teams to solve problems: focus groups to explore customer needs, consumer surveys to understand the market and annual meetings to listen to shareholders. But the words "solve," "explore," "understand" and "listen" have now taken on a whole new meaning. Thanks to recent technologies, including many Web 2.0 applications, companies can now tap into "the collective" on a greater scale than ever before. Indeed, the increasing use of information markets, wikis, crowdsourcing, "the wisdom of crowds" concepts, social networks, collaborative software and other Web-based tools constitutes a paradigm shift in the way that many companies make decisions. Call it the emerging era of "Decisions 2.0." But the proliferation of such technologies necessitates a framework for understanding what type of collective intelligence is possible (or not), desirable (or not) and affordable (or not) - and under what conditions. At a minimum, managers need to consider the following key issues: loss of control, diversity versus expertise, engagement, policing, intellectual property and mechanism design. By understanding such important issues, companies like Affinnova, Google, InnoCentive, Marketocracy and Threadless have successfully implemented Decisions 2.0 applications for a variety of purposes, including research and development, market research, customer service and knowledge management. The bottom line is this: For many problems that a company faces, there could well be a solution out there somewhere, far outside of the traditional places that managers might search, within or outside the organization. The trick, though, is to develop the right tool for locating that source and then tap into it.
Advanced manufacturing technologies (AMTs) enable many new ways of combining materials and embedding functionality. As a result, they can make previously difficult trade-offs practical, such as geometric complexity versus production time and cost. AMTs can also revitalise manufacturing and generate new employment - when they are combined with Web 2.0. Already a few companies - such as Fabjectory, Figure-Prints, Ponoko and Shapeways - have recognised the possibility of this combination, called by some 'Factory 2.0'. For example, Fabjectory and FigurePrints take digital data that describes a customer's character (or 'avatar') in a virtual game, and then manufacture a 3D physical image. In doing so, they connect the synthetic economy of virtual world transactions with the real economy of exchanging physical goods for money. This paper discusses further the concept of AMTs.
Open innovation, fuelled by the rise of the Internet, has made it feasible and cheaper for firms to open themselves up to a wide range of external sources of innovative ideas. The explosive growth of open innovation intermediary networks, such as InnoCentive or Linked-in, enables the rapid pairing of firms seeking knowledge to address a wide range of business challenges (seekers) with other firms or individuals who already have relevant knowledge (solvers or knowledge brokers). These intermediary networks allow procurement departments to source codified and un-codified knowledge from firms or individuals outside their traditional supplier networks using one-off transactional relationships. Although sourcing ideas in this way theoretically poses problems for knowledge search and transfer, we have found that companies can draw on processes and integration mechanisms developed by procurement and design engineering to develop effective organizational learning routines. These routines are strategically vital to source new ideas through open innovation using intermediary networks and create competitive advantage.
In the wake of the meltdown among US auto manufacturers in 2009, Jay Rogers - CEO of Local Motors - has a new approach for the automotive industry: Decide which models are produced through online design competitions, and then allow customers to "build their own cars" from the winning designs. The case focuses on two key issues: Can Local Motors build a thriving online design community at a reasonable cost? And can customers be convinced to add their own sweat and labor to the manufacturing process? The case is written from the perspective of a start-up company seeking funding while trying to implement a novel business concept.Learning Objective:This case highlights the promises and pitfalls of two increasingly common marketing tactics. First, the case explores the concept of involving consumers and communities in the design of one's products - inviting a broader discussion of similar initiatives such as open-source collaborative efforts. Second, the case examines the impact of involving customers in the manufacturing of one's products - again part of a broader conversation about the increased push towards allowing consumers to customize product offerings.
Interfirm networks in general and strategic networks in particular are considered as an organizational form with distinct structural properties. Due to a lack of adequate theory, the working of network processes as well as the resulting network effectiveness is not very well understood. Structuration theory, developed by Anthony Giddens as a social theory, offers the potential not only to analyze network processes without neglecting structures but also to understand why many rather than few designs seem to be effective. As conceived here, this potential results, above all, from two interrelated theorems of structuration theory: the duality of structure and the recursiveness of social praxis. It will be concluded that these the orems offer valuable insights into organizing networks, especially into how structures of signification, domination, and legitimation shape network processes and how they are reproduced under the auspices of network effectiveness.
I anatomize a successful open-source project, fetchmail, that was run as a deliberate test of some theories about software engineering suggested by the history of Linux. I discuss these theories in terms of two fundamentally different development styles, the "cathedral" model, representing most of the commercial world, versus the "bazaar" model of the Linux world. I show that these models derive from opposing assumptions about the nature of the software-debugging task. I then make a sustained argument from the Linux experience for the proposition that "Given enough eyeballs, all bugs are shallow," suggest productive analogies with other self-correcting systems of selfish agents, and conclude with some exploration of the implications of this insight for the future of software.
This paper presents a formal approach to evaluate the value of enhancing product customization in a vertically differentiated market. Different from most existing studies that tend to associate the level of customization with the number of product variants, we take a rather different view to the level of customization which we define as the degree to which consumers are involved along the value chain. Consequently, a higher level of customization is achieved when consumers are involved further upstream in the chain. The novelty of our approach stems from the integration of both marketing- and production-related factors that enable us to: consider trade-offs between customization, lead times and manufacturing costs; and analyze how these trade-offs should be addressed in a market in which one group of consumers is highly concerned about product customization, whereas the other group is more concerned about lead time. Through numerical examples, we demonstrate how the interplay between marketing- and operation-related factors affects firm's decision on the most appropriate level of customization.
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The traditional system of company-centric value creation (that has served us so well over the past 100 years) is becoming obsolete. Leaders now need a new frame of reference for value creation. In the emergent economy, competition will center on personalized co-creation experiences, resulting in value that is truly unique to each individual. The authors see a new frontier in value creation emerging, replete with fresh opportunities. In this new frontier the role of the consumer has changed from isolated to connected, from unaware to informed, from passive to active. As a result, companies can no longer act autonomously, designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers. Armed with new tools and dissatisfied with available choices, consumers want to interact with firms and thereby co-create value. The use of interaction as a basis for co-creation is at the crux of our emerging reality. The co-creation experience of the consumer becomes the very basis of value. The authors offer a DART model for managing co-creation of value processes.
Purpose
The purpose of this paper is to analyze the emerging crowd‐funding phenomenon, that is a collective effort by consumers who network and pool their money together, usually via the internet, in order to invest in and support efforts initiated by other people or organizations. Successful service businesses that organize crowd‐funding and act as intermediaries are emerging, attesting to the viability of this means of attracting investment.
Design/methodology/approach
The research employs a “grounded theory” approach, performing an in‐depth qualitative analysis of three cases involving crowd‐funding initiatives: SellaBand in the music business, Trampoline in financial services, and Kapipal in non‐profit services. These cases were selected to represent a diverse set of crowd‐funding operations that vary in terms of risk/return for the investor and the type of payoff associated to the investment.
Findings
The research addresses two research questions: how and why do consumers turn into crowd‐funding participants? and how and why do service providers set up a crowd‐funding initiative? Concerning the first research question, the authors' findings reveal purposes, characteristics, roles and tasks, and investment size of crowd‐funding activity from the consumer's point of view. Regarding the second research question, the authors' analysis reveals purposes, service roles, and network effects of crowd‐funding activity investigated from the point of view of the service organization that set up the initiative.
Practical implications
The findings also have implications for service managers interested in launching and/or managing crowd‐funding initiatives.
Originality/value
The paper addresses an emerging phenomenon and contributes to service theory in terms of extending the consumer's role from co‐production and co‐creation to investment.