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
Eric von Hippel is Professor of Management of Innovation and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management. He is the author of The Sources of Innovation.
"[von Hippel] shows that, in fields ranging from surgical instruments and software to kite surfing, customers often come up with new products of new ways of using old ones. Some companies encourage their customers to modify their merchandise. Others, however, do not: when a devoted user of Aibo, Sony's robot dog, wrote applicatons that would allow the Aibo to dance to music, Sony threatened the man with a lawsuit.", James Surowiecki, New Yorker
"The fruits of his labor are nicely summarized in Democratizing Innovation, a useful primer on what he calls 'user-centered innovation.'... Despite its brevity, Democratizing Innovation is a heavyweight book, written with the lightness of touch you might expect from a regular contributor to the journal Management Science. But where innovation comes from and how value gets created are heavy questions for all companies in all industries. No innovation means no value added, and ultimately no profits."—The Financial Times
"[von Hippel's] book looks at why users want customized products, why it is more advantageous for them rather than the manufacturer to make the changes, why they freely share their innovations with other, and the need for government to encourage user innovaton by refining patent and intellectual protection legislation. It’s a fascinating, little explored trend that he covers thoroughly. Although his book is written in academic style, it offers lots of examples and provides an understanding of an important innovation in the world of innovation."—Globe and Mail
"In a concise 200 pages, von Hippel traces the empirical studies on user innovation, determining that between 10 and 40 percent of users engage in developing or modifying products. These 'lead users' are ahead of the curve and often create improvements that other users will want to share."—Harvard Business School Working Knowledge
"Still, new patterns are emerging in some scattered yet suggestive areas of product design, studied by management expert, Eric von Hippel in Democratizing Innovation. 'Lead users' (the most zealous windsurfers who get new boards first and modify them, the most advanced builders experimenting with new materials like stressed-skin panels) often suggest or even create useful innovations that manufacturers adopt."—San Francisco Chronicle
"The book puts its thesis well, with plenty of examples.—Financial Review (Australia)
"This is a book that should be required reading for every person in every automotive company who is involved in product development, be they marketers or engineers, manufacturers or managers. It is that important."—Automotive Design and Production
"von Hippel has brought an important issue to the fore."—CIO Insight
"Von Hippel presents a persuasive case for the benefits of encouraging lead users to innovate and a truly intriguing look at what they’ve contributed to the world so far". —BizEd
"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
"Every manager concerned with growth and innovation should read this book. It explains how companies can replace a broken innovation paradigm with refreshingly effective and efficient methods for finding new growth products and markets."
—Clayton M. Christensen, Harvard Business School, author of The Innovator's Dilemma
"This is an important and original perspective on the neglected role of the user in the innovation process. Von Hippel extends his pathbreaking research on lead-user innovation by showing the economic benefits gained by opening new-product development to the natural insights and inventiveness of the market. No one managing product development in established or emerging industries can afford to ignore the power and value of involving users in the innovation process."
—Andrew Hargadon, author of How Breakthroughs Happen: The Surprising Truth about How Companies Innovate
"Von Hippel has written the essential 21st-century handbook on innovation. Business leaders who rely on organic growth will find his concepts and techniques extremely valuable."
—Roger Lacey, Staff Vice President of eBusiness and Corporate Planning and Strategy, 3M
"Eric von Hippel has a penchant for identifying important aspects of technological innovation that run contrary to conventional wisdom and to the thrust of conventional scholarship. His work on the important role that users, rather than suppliers, play in the advance of technology casts the process in a new light. This book is an intellectual feast."
—Richard R. Nelson, George Blumenthal Professor of International and Public Affairs, Business, and Law, Columbia University
"The guru of customer-centered innovation blazes new ground in this masterpiece. He shows managers how to get the most out of a world where customers and communities pioneer new ideas and reconfigure what they buy. Other books tell you that co-creating innovations with customers is important—Von Hippel tells you how to make it happen."
—Philip Anderson, INSEAD Alumni Fund Professor of Entrepreneurship, and Director, International Centre for Entrepreneurship
"Democratizing Innovation presents pathbreaking research to explain a major paradigm shift in innovation: users are displacing manufacturers to become the dominant force of innovation in many fields. I strongly recommend this brilliant, well-written book to researchers and managers who are passionate about the nature of successful innovation - and how to achieve it!"
—Georg von Krogh, Director, Institute of Management, University of St. Gallen, Switzerland
"Von Hippel provides us with the Rosetta Stone to innovation in the Internet age! He marshals a wide range of research findings to document and explain the major shift to user-centered innovation that is now well underway. He also shows managers and policymakers how they can adapt most effectively."
—Nikolaus Franke, Vienna University of Economics and Business Administration