“Eric von Hippel, a long-time affiliate with the Berkman Center, leads off our 2010 season of lunch talks with a discussion of “Household Sector” innovation. To explain his body of work, von Hippel explains that he’s tried to bring thinking about the communications space into the world of physical things, examining how processes we think of as affecting digital media can also apply to other forms of innovation.
Today’s talk introduces a [UK] survey of innovation carried out by customers – there’s 2-3 times more innovation from consumers than there is from the industry. This counters our traditional thinking about innovation. We generally believe that manufacturers dominate innovation – users satisfy their own, personal needs, but manufacturers can spread costs across customers, allowing for innovation that serves wider audiences. As a result, our understanding of intellectual property tends to protect manufacturers, not users.”
“Open source technology and lead user innovation: two subjects very much in evidence across a diverse number of business sectors today. But how can they help companies grow, and what can we learn from the likes of open innovators ranging from small communities of windsurfers to digital giant Google?
Professor Eric von Hippel of MIT’s Sloan School of Management is known for pioneering research that has prompted a major rethinking of how the innovation process works. He is the originator of lead user theory and a leading voice on open methods of innovation development. Here he expounds on the benefits of open source technology, why users are at the center of the innovation process and how they can trigger major changes in both company business models and in government policymaking.”
Von Hippel is the T Wilson Professor of Innovation at Sloan and also a professor of Engineering Systems at MIT. His academic research examines the sources and economics of innovation. He has founded and participated in start-up firms and is a founder of the entrepreneurship program at MIT. His most recent book is Democratizing Innovation (MIT Press). In the spirit of openness, copies of this and of his earlier book Sources of Innovation (Oxford University Press) can be downloaded free of charge from his MIT web site.
(via Praveen Singh)
The conversation about user-led innovation starts with a reference to NESTA Connect launch, where Von Hippel spoke recently.
Von Hippel then talks about what he describes as a revolution in innovation moving from in-house R&D (and marketing) departments, to users and customers. He draws out a series of implications for what this means for intellectual property right protection and business models. With the tools to innovate getting better/cheaper/easier (especially in the digital domain but increasingly in other areas as well) he describes his thesis of how innovation is being democratised.
Listen to interview (23:30)
User-generated content — from Wikipedia to YouTube to open-source software — is generating waves of excitement. But the opening of innovation to wider numbers of people obscures another trend: many of the most popular new products, like the iPod, are dominated by a top-down, elite innovation model that doesn’t allow for customization.
“New technologies are becoming so complex that many are beyond the possibility of democracy playing a role in their development,” said Thomas P. Hughes, a science and technology professor at the University of Pennsylvania.
Consider: Electronic implants into human bodies; gene-splicing as common as cosmetic surgery; computer networks mining vast databases to discern consumer preferences. All of these innovations are the result of corporate or government initiatives overseen by elites.
To be sure he gives credit to Eric von Hippel and the online community Instructables, but raises the question whether this is not some “kind of “democracy lite,” emphasizing high-end consumer products and services rather than innovations that broadly benefit society”.
This seminal book – based on a broad base of academic research – explores how users have been driving the innovation process for centuries. It also discusses opportunities that organizations can avail themselves of by exploiting user-driven innovation.
The interview contains an interesting section about user-centred innovation policy:
“In 2005, Denmark became the first country in the world to adopt support of “user-centered innovation” as national policy. Academic colleagues from Denmark and elsewhere are working to help understand the implications of this. Some of my colleagues and I also set up a Danish User-Centered Innovation Lab in Denmark to help. Starting in 2007, the Danish government is spending 160 million Kroner [equivalent to 21m Euro or 29m USD] a year on this – and the budget is slated to grow a lot larger over time.
The logic behind the new Danish policy is that, essentially, all the government spending on innovation around the world is now technology push – R&D subsidies to manufacturers and so on. The Danes and other small countries can never win at that game; they will always be outspent by larger countries. Their new idea is to help their manufacturing firms be early at converting to the new, user-centered innovation paradigm we have been discussing in order to create a comparative advantage for Denmark.”
“If you have ever come up with a work-around or improvement for a balky product only to find that it performs better than the original, you are not alone. Eric von Hippel proffers multiple examples where an ordinary user, frustrated or even desperate, solves a problem through innovation. His research found innovative users playing with all manner of product: mountain bikes, library IT systems, agricultural irrigation, and scientific instruments. Often, manufacturers keep at arm’s length from these inventions. He describes the Lego company “standing like a deer in headlights” when technologically adept adults discovered they could design their own sophisticated Lego robots. User communities arise, freely communicate with each other, advance ideas and sometimes even “drive the manufacturer out of product design,” according to von Hippel. This widely distributed inventing bug is a good trend, believes von Hippel, because users “tend to make things that are functionally novel.” Not only is it “freeing for individuals” but it also creates a “free commons” of product ideas, parallel to the more restrictive world of intellectual property governed by less creative manufacturers.”
On Von Hippel’s website, you can also find some video tutorials on the topic of “lead user” studies.
(via Business Innovation 2005)
In Democratizing Innovation, Eric Von Hippel, Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management, looks closely at this emerging system of user-centred 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.
Download the book for free (Creative Commons License)
Related: Von Hippel interviewed in The Feature on his new book
Four new chapters of the interaction-design.org resource are now available:
from an HCI Perspective
by Alistair G. Sutcliffe
The chapter is structured in six sections. In the section 13.1, the Requirements Engineering process is described. This is followed in section 13.2 by a review of scenario-based approaches which illustrate the convergence between Requirements Engineering and HCI. Section 13.3 deals with models and representations in the two disciplines, then section 13.4 returns to a process theme to assess the differences between HCI and Requirements Engineering approaches to development. Section 13.5 reviews how knowledge is reused in the requirements and design process, leading to a brief discussion of the prospects for convergence between HCI and Requirements Engineering.
Context-Awareness, Context-Aware User Interfaces, and Implicit Interaction
by Albrecht Schmidt
In this chapter, we introduce the basics for creating context-aware applications and discuss how these insights may help design systems that are easier and more pleasant to use
by Clayton M. Christensen
A disruptive technology or disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect. Although the term disruptive technology is widely used, disruptive innovation seems a more appropriate term in many contexts since few technologies are intrinsically disruptive; rather, it is the business model that the technology enables that creates the disruptive impact.
Open User Innovation
by Eric von Hippel
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 innovation by users, generally openly shared, 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 producer-centered innovation in many fields. In this chapter, I provide an overview of what the international research community now understands about this phenomenon.
“Recent studies show consumers now spend more money tweaking and inventing stuff than consumer product firms spend on research and development. It’s more than $3.75 billion a year in Britain, and U.S. studies under way now show similiar patterns. Makers are even morphing into entrepreneurs, with some of the best projects, including Kleinman’s, raising money for commercial development of self-funding Web sites such as Kickstarter, where anyone with a credit card can chip in to back cool ideas.
Major companies such as Ford are, after years of resisting inventor gadflies, inviting makers to submit product tweaks. “This is the democratization of technology,” said K. Venkatesh Prasad, a senior engineering executive at Ford.
“Policymakers and economists always assumed that consumers just consumed and that they don’t innovate,” said Eric von Hippel, who studies technological innovation and makers at MIT’s business school. “What’s clearly happening now is that all of a sudden it’s easier for us to make exactly what we want.””
“Tinkering is challenging a deeply entrenched tenet of economic theory: that producers, not consumers, are the ones who innovate. [...]
Financed by the British government, Eric A. von Hippel [a professor of technological innovation at M.I.T.’s Sloan School of Management] and his colleagues last year completed the first representative large-scale survey of consumer innovation ever conducted.
What the team discovered, described in a paper that is under review for publication, was that the amount of money individual consumers spent making and improving products was more than twice as large as the amount spent by all British firms combined on product research and development over a three-year period.”
Homesense is an epic piece of open research that explores how people can build their own DIY smart homes using open hardware and supported by local experts. The concepts for Homesense came out of the failure of top-down design to give us the ‘smart homes’ of the future, and wondering how a more democratized system of innovation could make that design process better. The project has sponsored by EDF R&D, and supported by the HighWire research group at Lancaster University.
“Since early Spring a huge amount has been going on behind the scene – little duck-legs paddling furiously under the surface of the water – and, now that the project is live here’s a run-down of where we are and how we’ve got here so far.”
The sources of innovation are shifting rapidly from the traditional 20th century model of commercial R&D labs, elite universities, private companies and government agencies to user-led innovation. Today’s users have much greater input into the creation and dissemination of the media, knowledge and culture they consume. Open Source software, virtual worlds and media-sharing communities are at the forefront of new modes of user-led innovation that challenge established boundaries between producers and consumers.
This new CRC report reveals the major drivers of user-led innovation and explores how it is affecting organisations’ relationships with key stakeholders. It investigates how user-led practices generate business and social value through a major case study of the virtual world Second Life. The report canvasses a number of pathways for organisations to leverage the participation of their audiences, customers and citizens in the interest of co-creating new products, services and platforms.
The research draws on extensive interviews with some of the world’s leading thinkers on the social, economic and legal aspects of user-led innovation including: Eric von Hippel (MIT), Yochai Benkler (Harvard), Jimmy Wales (Wikipedia), Siva Vaidhyanathan (Virginia), John Howkins (Adelphi Charter), Michel Bauwens (P2P Alternatives) and Mitch Kapor (Linden Lab).
Download study (pdf, 2.4 mb, 57 pages)
“Nearly three decades of research into the sources of innovation, pioneered and still driven by Eric von Hippel (MIT), has revealed that users can be surprisingly creative and innovative. In many cases, the users themselves – and not manufacturers – are the originators of new products and services.
Companies and academics alike are increasingly searching for ways to reclaim the territory of user innovation for innovation management and product development.
The User Innovation Research Initiative aims to deepen our understanding of the phenomenon of user innovation. We search for patterns and mechanisms and, building on our insights, develop and improve practical methods in order to harness user innovativeness for companies. Our research is organized in four areas:
- Lead user research – Innovative potential is concentrated among lead users. How can they be identified?
- Toolkits for user innovation and design – Companies can equip their customers with virtual tools which allow them to design their own product. How does this work?
- Innovative user communities – Users often form networks and informal groups – with highly innovative output. What can be learned from this?
- Users & entrepreneurs – User innovators might themselves exploit entrepreneurial opportunities. How do they add to industry development
The article is part of a special report on innovation published today in The Economist.
“Eric Von Hippel, of MIT, has long advocated user-driven innovation. He says you can see it all around you. Users who feel passionate about certain products often fiddle around with them because they fail to provide exactly what they want. It might be a mountain bike, a kayak or even a car. He reckons open innovation misses the point if it is not inspired by users, because companies are then “just talking about a market for intellectual property rights, it’s still the old model.”
Mr Von Hippel thinks that firms that are close to their lead users can come up with much better designs for new products and get them to market faster.”
In alphabetical order:
“Denmark has been the first nation to turn this into policy. In 2005, the Danish government established “strengthening user-centred innovation” as a national priority. Sweden’s tradition of “participatory design” has positioned several of its industries to take good advantage of this phenomenon. Britain’s National Endowment for Science, Technology and the Arts has begun funding policy research in user-driven innovation. These early efforts are important and more will follow.”
The article underlines many crucial points: how ingenious leading-edge users – not everyday consumers or profit-focused producers – are becoming the economic engines that drive innovation; that the policy point should not be to invite new subsidies for innovative users: the issue is “empowerment” not subsidy; that national governments and the European Union could use their procurement power and standards-setting influence to ensure that in healthcare, digital technologies, public education and energy networks, user-driven innovation infrastructures are granted parity with proprietary vendors; and that there is great wealth to be grown from proffering platforms for user-developed innovation.
The authors conclude:
“Europe has an extraordinarily well- educated population all-too-frequently frustrated by institutional strictures and intellectual property constraints that make innovation more difficult than it needs to be. Rather than over-rely upon the past century’s innovation mechanisms of venture capital, targeted subsidies and national champions, policymakers should treat this global trend as an innovative opportunity. The rise of user-driven innovation is about the democratisation of innovation – an act of economic empowerment. Boosting economic empowerment is a powerful way of boosting growth. Policies that facilitate greater diversity and democracy of growth are good politics and good economics.”
How can companies with successful businesses convince their customers that change is needed? How do you take old companies, products, processes or systems and make new uses/markets/industries for them?
“It’s not that customers don’t know what they want. It’s rather they don’t say what they want,” says Vikrum Akula, CEO & Founder of SKS Microfinance.
“User innovation has always been around,” says Eric Von Hippel of the Massachusetts Institute of Technology, author of Democratizing Innovation (MIT Press). “The difference is that people can no longer deny that it is happening.” Indeed, it is “very likely that the majority of innovation happens this way,” says Mr. Von Hippel. Such innovation, he says, has a “much higher rate of success”.
Episode 3 examines how successful companies use their customers to innovate. Our expert panel offers ways in which customers can be used as a resource as well as methods useful in bringing reluctant customers into the innovation process. (Not to mention ways new customers might be discovered who might want your innovation.)
Featured guests are Meg Whitman, CEO of Ebay, Tom Freston, former president of Viacom, Vikrum Akula, CEO and founder of SKS Microfinance; and Richard Posey, CEO of Moen.
“In doing so, he also represents a significant untapped vein of innovation for companies.
What Dr. Sims did is called user-driven innovation by Eric von Hippel, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. Mr. von Hippel is the leading advocate of the value of letting users of products modify them or improve them, because they may come up with changes that manufacturers never considered. He thinks that this could help companies develop products more quickly and inexpensively than with their internal design teams.”
“In some cases, it appears that "old dogs" can learn "new tricks" by listening to their customers. At eBay and LEGO, for example, customers are actively leading the product innovation process. Other companies, such as Moen, are tapping into cutting-edge ideas such as customer anthropology in order to understand what customers want and need.
The segment includes interviews with eBay CEO Meg Whitman and former Viacom bigwig Tom Freston, as well as short clips featuring Muhammad Yunus (winner of the Nobel Prize for his work in micro-finance lending), LEGO Mindstorms, TurboTap and Callaway Golf. One of the highlights of the program is the insightful commentary from Eric von Hippel of MIT, who explains how "lead users" are driving innovation in many different industries.”
The essay elaborates Eric von Hippel’s concept of the ‘lead user’ into a wider notion of ‘lead market’.
“We should not throw away the benefits of the support we give to innovation through grants, incentives and advice, but complement it with efforts to create ‘lead markets’ – demanding consumers (including the public sector) who give innovators an early customer base from which to develop their products or services and diffuse them ahead of global competition.
In addition, this focus on demand for innovations will give us a tool to tackle one of the UK’s most pressing problems – how to increase the productivity and effectiveness of our public services. Outside of the defence sector, the public sector has lagged behind consumer and industrial sectors in innovation, and yet they have the potential through their purchasing power and the regulatory powers of government to transform the markets for innovations.”
NESTA’s “Provocations” are extended essays by key thought leaders working in innovation. They aim to foster debate and new ideas, and showcase thought-provoking work on innovation.
Luke Georghiou is Professor of Science and Technology Policy and Management at the University of Manchester and Director of PREST, a large innovation research centre within the Manchester Business School.
Download essay (pdf, 229 kb, 32 pages)