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A leading innovation scholar explains the growing phenomenon and impact of free innovation, in which innovations developed by consumers and given away "for free." In this book, Eric von Hippel, author of the influential Democratizing Innovation, integrates new theory and research findings into the framework of a "free innovation paradigm." Free innovation, as he defines it, involves innovations developed by consumers who are self-rewarded for their efforts, and who give their designs away "for free." It is an inherently simple grassroots innovation process, unencumbered by compensated transactions and intellectual property rights. Free innovation is already widespread in national economies and is steadily increasing in both scale and scope. Today, tens of millions of consumers are collectively spending tens of billions of dollars annually on innovation development. However, because free innovations are developed during consumers' unpaid, discretionary time and are given away rather than sold, their collective impact and value have until very recently been hidden from view. This has caused researchers, governments, and firms to focus too much on the Schumpeterian idea of innovation as a producer-dominated activity. Free innovation has both advantages and drawbacks. Because free innovators are self-rewarded by such factors as personal utility, learning, and fun, they often pioneer new areas before producers see commercial potential. At the same time, because they give away their innovations, free innovators generally have very little incentive to invest in diffusing what they create, which reduces the social value of their efforts. The best solution, von Hippel and his colleagues argue, is a division of labor between free innovators and producers, enabling each to do what they do best. The result will be both increased producer profits and increased social welfare—a gain for all.

Overview In this book, Eric von Hippel, author of the influential Democratizing Innovation, integrates new theory and research findings into the framework of a "free innovation paradigm." Free innovation, as he defines it, involves innovations developed by consumers who are self-rewarded for their efforts, and who give their designs away "for free." It is an inherently simple grassroots innovation process, unencumbered by compensated transactions and intellectual property rights. Free innovation is already widespread in national economies and is steadily increasing in both scale and scope. Today, tens of millions of consumers are collectively spending tens of billions of dollars annually on innovation development. However, because free innovations are developed during consumers' unpaid, discretionary time and are given away rather than sold, their collective impact and value have until very recently been hidden from view. This has caused researchers, governments, and firms to focus too much on the Schumpeterian idea of innovation as a producer-dominated activity. Free innovation has both advantages and drawbacks. Because free innovators are self-rewarded by such factors as personal utility, learning, and fun, they often pioneer new areas before producers see commercial potential. At the same time, because they give away their innovations, free innovators generally have very little incentive to invest in diffusing what they create, which reduces the social value of their efforts. The best solution, von Hippel and his colleagues argue, is a division of labor between free innovators and producers, enabling each to do what they do best. The result will be both increased producer profits and increased social welfare--a gain for all.

x, 204 p. : ill. ; 24 cm. Libro Electrónico ; Eric von Hippel has written a genuinely important book on innovation. Combining a wealth of case studies and data with a clear and systematically developed theoretical framework, Democratizing Innovation turns much of how we think about innovation economics on its head. Von Hippel has provided us with a fascinating book that will challenge innovation theorists and businesses alike. Yochai Benkler, Professor of Law, Yale Law School. ; Innovation is rapidly becoming democratised. 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 user-centred innovation system. 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 democratised 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 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 democratised user-centred innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license. ; Contents Acknowledgements 1 Introduction and Overview 2 Development of Products by Lead Users 3 Why Many Users Want Custom Products 4 Users' Innovate-or-Buy Decisions 5 Users' Low-Cost Innovation Niches 6 Why Users Often Freely Reveal Their Innovations 7 Innovation Communities 8 Adapting Policy to User Innovation 9 Democratizing Innovation 10 Application: Searching for Lead User Innovations 11 Application: Toolkits for User Innovation and Custom Design 12 Linking User Innovation to Other Phenomena and Fields Notes Bibliography Index

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.

It has long been assumed that product innovations are typically developed by product manufacturers. Because this assumption deals with the basic matter of who the innovator is, it has inevitably had a major impact on innovation-related research, on firms' management of research and development, and on government innovation policy. However, it now appears that this basic assumption is often wrong. In this book I begin by presenting a series of studies showing that the sources of innovation vary greatly. In some fields, innovation users develop most innovations. In others, suppliers of innovation-related components and materials are the typical sources of innovation. In still other fields, conventional wisdom holds and product manufacturers are indeed the typical innovators. Next, I explore why this variation in the functional sources of innovation occurs and how it might be predicted. Finally, I propose and test some implications of replacing a manufacturer-as-innovator assumption with a view of the innovation process as predictably distributed across users, manufacturers, suppliers, and others. Keywords: innovation, innovators, user innovation