How Do *Your* Customers Innovate?

This article on consumer innovation that appeared in The New York Times over the weekend was fascinating. It points to a new study conducted in the UK on the role customers play in innovation in consumer markets. A key finding was that:

“6.2% of UK consumers — 2.9 million individuals — have engaged in consumer product innovation during the prior 3 years. In aggregate, consumers’ annual product development expenditures are 2.3 times larger than the annual consumer product R&D expenditures of all firms in the UK combined.”

Study author Eric A. Von Hippell, of the MIT Sloan School of Management, said, “We’ve been missing the dark matter of innovation. This is a new pattern for how innovations come about.”

Well, maybe not so new. The NYT journalist, Patricia Cohen, goes on to point out that “The very study of collaborative user innovation is a relatively new phenomenon that began only in the mid-1990s when advocates for open-source software began to argue that computer code should be freely available for thousands of independent minds to play with and improve.” “They overturned the widely held model,” Ms. Cohen quoted Carliss Y. Baldwin, a business administration professor at the Harvard Business School, adding: “What makes Eric’s work so significant is that it is unprecedented to try to measure the extent of user innovation. He shows that we’ve had on a set of mental blinders.”

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