Democratizing Innovation In Organizations

Managers often isolate their innovation teams, but wouldn’t it be better to engage all the workers in innovation? This book describes a framework that makes innovation a daily consideration for all. It involves allowing a knowledge network to develop naturally which complements the existing organizational structure making it more organic. It fosters more extensive collaboration amongst workers to produce more imaginative solutions that maximize value. The workers are encouraged to consult one another spontaneously across their organization and beyond its traditional boundaries. Insightful and constructive exchanges stimulate their thinking making them creative partners. Unsuspected capabilities, ideas and value are revealed. The author of this book describes creative deliberation techniques designed to maximize stakeholder value. The framework also makes organizations nimbler and more resilient to market changes. They become more sustainable in ever-changing conditions because learning and change become the norm. Innovation champions will find powerful arguments for introducing democratized innovation in their organizations. A wealth of practical techniques and handy tips for participative work-based training will help organizational trainers and facilitators to democratize innovation. Management consultants will find invaluable insights to advise their clients on innovation. Your workers are your organization’s best agents of change. Unleash their natural creativity. Let’s get started!

Managers often isolate their innovation teams, but wouldn’t it be better to engage all the workers in innovation? This book describes a framework that makes innovation a daily consideration for all. It involves allowing a knowledge network to develop naturally which complements the existing organizational structure making it more organic. It fosters more extensive collaboration amongst workers to produce more imaginative solutions that maximize value. The workers are encouraged to consult one another spontaneously across their organization and beyond its traditional boundaries. Insightful and constructive exchanges stimulate their thinking making them creative partners. Unsuspected capabilities, ideas and value are revealed. Philippe Davidson describes creative deliberation techniques designed to maximize stakeholder value. The framework also makes organizations nimbler and more resilient to market changes. They become more sustainable in ever-changing conditions because learning and change become the norm. Innovation champions will find powerful arguments for introducing democratized innovation in their organizations. A wealth of practical techniques and handy tips for participative work-based training will help organizational trainers and facilitators to democratize innovation. Management consultants will find invaluable insights to advise their clients on innovation. Your workers are your organization’s best agents of change - unleash their natural creativity!

The process of user-centered innovation: how it can benefit both users and manufacturers and how its emergence will bring changes in business models and in public policy. 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.

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 I look closely at this emerging user-centered innovation system, which is affecting both information products and physical products. Drawing on work done with several coauthors, I explore 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. Drawing on work with Nikolaus Franke, Pam Morrison and others, I document that product and service development is concentrated among lead user firms and individuals. Lead users that are ahead on marketplace trends do not replicate manufacturer development efforts. Instead, they develop products that are not yet available. Later manufacturers find many of these user-developed products to be the basis for commercial products. Drawing upon work with Dietmar Harhoff, Joachim Henkel and others, I report that user innovation has a positive impact on social welfare, and propose that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. An electronic version of this book is available under a Creative Commons license.

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.

A comprehensive and multidisciplinary view of the emerging paradigm of user and open innovation, offering both theoretical and empirical perspectives. The last two decades have witnessed an extraordinary growth of new models of managing and organizing the innovation process that emphasizes users over producers. Large parts of the knowledge economy now routinely rely on users, communities, and open innovation approaches to solve important technological and organizational problems. This view of innovation, pioneered by the economist Eric von Hippel, counters the dominant paradigm, which cast the profit-seeking incentives of firms as the main driver of technical change. In a series of influential writings, von Hippel and colleagues found empirical evidence that flatly contradicted the producer-centered model of innovation. Since then, the study of user-driven innovation has continued and expanded, with further empirical exploration of a distributed model of innovation that includes communities and platforms in a variety of contexts and with the development of theory to explain the economic underpinnings of this still emerging paradigm. This volume provides a comprehensive and multidisciplinary view of the field of user and open innovation, reflecting advances in the field over the last several decades. The contributors—including many colleagues of Eric von Hippel—offer both theoretical and empirical perspectives from such diverse fields as economics, the history of science and technology, law, management, and policy. The empirical contexts for their studies range from household goods to financial services. After discussing the fundamentals of user innovation, the contributors cover communities and innovation; legal aspects of user and community innovation; new roles for user innovators; user interactions with firms; and user innovation in practice, describing experiments, toolkits, and crowdsourcing, and crowdfunding. Contributors Efe Aksuyek, Yochai Benkler, James Bessen, Jörn H. Block, Annika Bock, Helena Canhão, Jeroen P. J. de Jong, Emmanuelle Fauchart, Dominique Foray, Nikolaus Franke, Johann Füller, Helena Garriga, Fred Gault, Fredrik Hacklin, Dietmar Harhoff, Joachim Henkel, Cornelius Herstatt, Christoph Hienerth, Venkat Kuppuswamy, Karim R. Lakhani, Christopher Lettl, Christian Lüthje, Ethan Mollick, Hidehiko Nishikawa, Alessandro Nuvolari, Susumu Ogawa, Pedro Oliveira, Stefan Perkmann Berger, Frank Piller, Christina Raasch, Susanne Roiser, Fabrizio Salvador, Pamela Samuelson, Tim Schweisfurth, Sonali K. Shah, Christoph Stockstrom, Katherine J. Strandburg, Stefan Thomke, Andrew W. Torrance, Mary Tripsas, Georg von Krogh

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.

Company democracy is often misunderstood in the business context as democracy is usually related to politics. In this book, the authors present a different dimension. They focus first on democracy from an organizational culture perspective and then offer employees opportunities to understand and apply democracy from the company floor level. The Company Democracy Model (CDM) is an industry-wide, practical methodology for knowledge management utilization under applied philosophical thinking. The model progresses through a framework in which an organizational evolutionary spiral method empowers the creation of knowledge-based democratic cultures for wise and effective strategic management and leadership. This new innovative methodology, supported with techniques and processes, can gain/create many ideas, insights, innovations, new products, and services that can benefit a company. One purpose of using the model is to create a robust conceptual framework as a theoretical basis for a business strategy that promotes sustainable, continuous, and democratic development. Another purpose is to emphasize the importance of intellectual capital and compare capital-related and human-related business issues in shaping a company’s competitiveness, profitability, productivity, performance, and shared value. A third purpose is to use its symbolic infrastructure that builds solid democratic systems for viable business development and management. Finally, the described purposes give the reader new ideas to change and improve the design of business activities in a collective and modern democratic way.