Mere mortals and great ideas: FT Review of the new book Democratizing Innovation. "[The book] argues that "users are the first to develop many, and perhaps most, new industrial and commercial products". This being so, competitive advantage might be expected to flow to manufacturers who systematically harvest this crop of ideas. For example, 3M, the industrial products group, has had programmes in place since 1996 to harness ideas generated by lead users. After crunching the numbers, von Hippel found that "lead-user-developed product concepts" at 3M were likely to be more novel, enjoy higher market share, have greater potential to develop into an entire product line and be more strategically important.
Mass-producing products developed by lead users is only one possible approach. Alternatives include selling toolkits with which customers can build their own creations, or developing products that complement user innovations.
This latter strategy is useful in circumstances where - to the consternation of economists - lead users give away their innovations. Thus the Linux operating system was developed by members of the open-source software community, many of whom are lead users of computing power. Since Linux is freely available, commercial software companies are unable to sell proprietary versions. Instead, they have responded with software and services that complement Linux.
The toolkits approach has been used by companies including International Flavors & Fragrances, which supplies customers with the tools to design their own food flavours.
These examples turn on its head the traditional division of labour between producer and consumer. .. This has profound implications not only for corporate management but also for public policy. If the goal of policy is to increase social welfare by encouraging innovation - and if user-generated innovation really is more successful than other types - then rules and regulations should encourage this activity. At issue here is patent law, legal constraints on product modification and tax breaks for research and development. Why should manufacturers get all the incentives when users do such valuable work? " 11:02:01 PM