User Innovation

excerpted from HBS Working Knowledge

User innovations occur when customers of a product improve on that product with their own designs.

Baldwin and her fellow researchers wanted to better understand this path from user innovation to commercial product. What role do user communities play in this process? Are “user-manufacturers” —users who turn their improvements into commercial products—usually industry leaders? How competitive are existing, well-capitalized companies when they compete against user-manufacturers? Although there have been a number of studies on user innovation, little if any work has been done on the commercialization of user innovations, the authors believe.

The research can be found in their working paper How User Innovations Become Commercial Products: A Theoretical Investigation and Case Study

I’m interested in how designs are created and then turned into real things. Many management scholars and economists fall into the habit of thinking that innovation is something that firms uniquely do in order to make money. But Eric von Hippel and his colleagues have shown that many product innovations originate with users. This makes sense when you think about it—users are the direct beneficiaries of better products. And it’s users’ willingness to pay for better products that makes innovation profitable for firms.

The research has been conducted by Harvard Business School professor Carliss Baldwin and her colleagues Christoph Hienerth and Eric von Hippel.