Democratizing Innovation

Eric von Hippel, Professor at MIT’s Sloan School of Management and Head of its Innovation and Entrepreneurship Group, explains how innovation by users provides a very necessary complement to and feedstock for manufacturer innovation.

A free copy of the book is available for download under Creative Commons License.

In its author’s words: “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 book includes a number of concrete empirical studies, as well as extensive market research and statistics to support his arguments.

Book Description

Innovation is rapidly becoming democratized. 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 system of user-centered 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.

The trend toward democratized 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 that they should 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 democratized user-centered innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license.

About the author

Von Hippel is a Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management. He is specialized in research related to the nature and economics of distributed and open innovation. He also develops and teaches about practical methods that firms can use to improve their product and service development processes.

He was a co-founder of the MIT Entrepreneurship Program, and served as a consultant for McKinsey and Company. He was also a co-founder and manager of R&D for Graphic Sciences, Inc.

Sources

• Eric Von Hippel’s Homepage at MIT
• Free electronic version of “Democratizing Innovation” (PDF format)
• MIT Press page on “Democratizing Innovation”
• Video from “Democratizing Innovation” lectute at MIT World