Innovation Must Be User-Centric, Shareable: Von Hippel's Democratized Innovation Shows The Road

It is becoming progressively easier for many users to get precisely what they want by designing it for themselves.

Users that innovate can develop exactly what they want, rather than relying on manufacturers to act as their (often very imperfect ) agents. Moreover, individual users do not have to develop everything they need on their own: they can benefit from innovations developed and freely shared by others.

Photo credit: Mikael Damkier

How does the emerging process of user-centric, democratized innovation work, and how does innovation by users provide a very necessary complement to and feedstock for manufacturer innovation?

In a new book by Eric Von Hippel entitled Democratizing Innovation (fully downloadable PDF), the user-centered innovation process is placed in sharp contrast to the traditional model, in which products and services are developed by manufacturers within a closed approach which leverages copyright, patents, DRM and many other protections mechanisms to prevent potential imitators and competitors from taking advantage of their original innovation investments.

In this traditional model, a user's only role is to have needs, which manufacturers then identify and fill by designing and producing new products.

However, and here is the real news, a growing body of empirical evidence work shows that in most cases are the users themselves who first develop most new industrial and consumer products and services. Not only. This open user-contributed innovation is now growing steadily thanks to the great advances we have been making in the fields of communication, cooperation and collaboration.

Here the unedited first part of his Introduction and Overview to his book:

Photo credit: Michael Osterrieder

When I say that innovation is being democratized, I mean that users of products and services--both firms and individual consumers--are increasingly able to innovate for themselves.

User-centered innovation processes offer great advantages over the manufacturer-centric innovation development systems that have been the mainstay of commerce for hundreds of years.

Users that innovate can develop exactly what they want, rather than relying on manufacturers to act as their (often very imperfect) agents.

Moreover, individual users do not have to develop everything they need on their own: they can benefit from innovations developed and freely shared by others.

The trend toward democratization of innovation applies to information products such as software and also to physical products.

As a quick illustration of the latter, consider the development of high-performance windsurfing techniques and equipment in Hawaii by an informal user group. High-performance windsurfing involves acrobatics such as jumps and flips and turns in mid-air.

Photo credit: HC Merkle

Larry Stanley, a pioneer in high-performance windsurfing, described the development of a major innovation in technique and equipment to Sonali Shah:

"In 1978 Jürgen Honscheid came over from West Germany for the first Hawaiian World Cup and discovered jumping, which was new to him, although Mike Horgan and I were jumping in 1974 and 1975. There was a new enthusiasm for jumping and we were all trying to outdo each other by jumping higher and higher. The problem was that . . . the riders flew off in mid-air because there was no way to keep the board with you--and as a result you hurt your feet, your legs, and the board.

Then I remembered the "Chip," a small experimental board we had built with footstraps, and thought "it's dumb not to use this for jumping." That's when I first started jumping with footstraps and discovering controlled flight. I could go so much faster than I ever thought and when you hit a wave it was like a motorcycle rider hitting a ramp; you just flew into the air. All of a sudden not only could you fly into the air, but you could land the thing, and not only that, but you could change direction in the air!

The whole sport of high-performance windsurfing really started from that.

As soon as I did it, there were about ten of us who sailed all the time together and within one or two days there were various boards out there that had footstraps of various kinds on them, and we were all going fast and jumping waves and stuff. It just kind of snowballed from there."
(Shah 2000)

By 1998, more than a million people were engaged in windsurfing, and a large fraction of the boards sold incorporated the user-developed innovations for the high-performance sport.

The user-centered innovation process just illustrated is in sharp contrast to the traditional model, in which products and services are developed by manufacturers in a closed way, the manufacturers using patents, copyrights, and other protections to prevent imitators from free riding on their innovation
investments.

In this traditional model, a user's only role is to have needs, which manufacturers then identify and fill by designing and producing new products. The manufacturer-centric model does fit some fields and conditions. However, a growing body of empirical work shows that users are the first to develop many and perhaps most new industrial and consumer products. Further, the contribution of users is growing steadily larger as a result of continuing advances in computer and communications capabilities.

In this book I explain in detail how the emerging process of user-centric, democratized innovation works. I also explain how innovation by users provides a very necessary complement to and feedstock for manufacturer innovation.

The ongoing shift of innovation to users has some very attractive qualities.

It is becoming progressively easier for many users to get precisely what they want by designing it for themselves. And innovation by users appears to increase social welfare. At the same time, the ongoing shift of product-development activities from manufacturers to users is painful and difficult for many manufacturers.

Open, distributed innovation is "attacking" a major structure of the social division of labor. Many firms and industries must make fundamental changes to long-held business models in order to adapt.

Further, governmental policy and legislation sometimes preferentially supports innovation by manufacturers. Considerations of social welfare suggest that this must change. The workings of the intellectual property system are of special concern. But despite the difficulties, a democratized and user-centric system of innovation appears well worth striving for.

Users, as the term will be used in this book, are firms or individual consumers that expect to benefit from using a product or a service. In contrast, manufacturers expect to benefit from selling a product or a service.

A firm or an individual can have different relationships to different products or innovations.

Photo credit: Thomas Sztanek

For example, Boeing is a manufacturer of airplanes, but it is also a user of machine tools. If we were examining innovations developed by Boeing for the airplanes it sells, we would consider Boeing a manufacturer-innovator in those cases.

But if we were considering innovations in metal-forming machinery developed by Boeing for in-house use in building airplanes, we would categorize those as user-developed innovations and would categorize Boeing as a user-innovator in those cases.

Innovation user and innovation manufacturer are the two general "functional" relationships between innovator and innovation. Users are unique in that they alone benefit directly from innovations. All others (here lumped under the term "manufacturers" ) must sell innovation related
products or services to users, indirectly or directly, in order to profit from innovations.

Thus, in order to profit, inventors must sell or license knowledge related to innovations, and manufacturers must sell products or services incorporating innovations.

Similarly, suppliers of innovation related materials or services--unless they have direct use for the innovations--must sell the materials or services in order to profit from the innovations.

The user and manufacturer categorization of relationships between innovator and innovation can be extended to specific functions, attributes, or features of products and services. When this is done, it may turn out that different parties are associated with different attributes of a particular product or service.

For example, householders are the users of the switching attribute of a household electric light switch--they use it to turn lights on and off. However, switches also have other attributes, such as "easy wiring" qualities, that may be used only by the electricians who install them. Therefore, if an electrician were to develop an improvement to the installation attributes of a switch, it would be considered a user-developed innovation.

From Introduction and Overview to Democratizing Innovation by Eric von Hippel - MIT Press, 2005
Free Download Under Creative Commons License at
http://web.mit.edu/evhippel/www

About the author:

Eric Von Hippel is a Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management. He specializes in research related to the nature and economics of distributed and open innovation. Professor Hippel has also developed practical methods he teaches to commercial firms to improve their product and service development processes.