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.
About the Author
Eric von Hippel, the T. Wilson (1953) Professor of Technological Innovation at the MIT Sloan School of Management, is a leading research scholar on the economics and management of free, open, and distributed innovation.
“Free Innovation lays out the central role that individuals and groups interacting socially, without prices or property, play in exploring the very frontiers of innovation. Innovation is the most important aspect of growth, and Eric von Hippel is one of the handful of scholars in the world who have ever had a genuinely original and fundamental point to make about it. No one who hasn’t read this book can claim to be serious about innovation research, policy, or practice.”
—Yochai Benkler, Berkman Professor of Entrepreneurial Legal Studies, Harvard Law School
“Free Innovation is a tour de force. It is a continuation of a long stream of important scholarship by Eric von Hippel that puts the proactive role of users and communities center stage in the innovation process. Eric has been ahead of his time as the internet economy is making his frameworks increasingly relevant in the global system of innovation.”
—David Teece, Faculty Director, Institute for Business Innovation, University of California, Berkeley
“Eric von Hippel is a visionary innovation scholar who has helped policymakers around the world understand modern innovation processes much more deeply. In Free Innovation he offers a powerful and effective template to increase the welfare of nations through more sophisticated and relevant free and user innovation policies. I predict it will have a strong impact both within the European Union and worldwide.”
—Carlos Moedas, European Union Commissioner for Research, Science and Innovation
“Eric von Hippel brilliantly describes a new innovation paradigm for the internet age. Free Innovation will have a strong and lasting effect on research, management, and public policy.”
—Dietmar Harhoff, Director, Max Planck Institute for Innovation and Competition, München
“Companies that find ways to work with free innovators will develop better products and services and also create more loyal customers. Eric von Hippel describes, with powerful frameworks and rich examples, what is happening in the real world and how corporations can profit.”
—Jim Euchner, Vice President, Global Innovation, Goodyear Tire & Rubber Company; MIT Innovation Lab
“The invaluable insights and solutions described in Free Innovation must be recognized and supported by all consumer goods producers serious about sustainable growth. Our company uses these methods with great commercial success.”
—Bernadette Piacek-Llanes, Vice President of Innovation, Technology, and Quality, General Mills; MIT Innovation Lab