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03 November 2008 ~ 4 Comments                                       

User-led innovation report, the Australians get it.

I finally got around to reading a great report out of Swinburne University of Technology written by Darren Sharp & Mandy Salomon called “User-led Innovation: A New Framework for Co-creating Business and Social Value“. It does a great job of tying together many of the themes discussed on co>innovative. A variety of innovations over the last couple of decades have been improving in parallel as well as building off of each other to create this… this thing that is going on, whatever you want to call it:

Open source software, citizen journalism, crowdsourcing, user-generated content, social networks, the sharing economy, peer production, Multi-User Virtual Environments, participatory media, collaborative creativity. Distributed capitalism. These are all terms in the rapidly expanding lexicon of the field of ‘user-led innovation’. For much of the 20th century business operated on an enterprise logic of ‘managerial capitalism’ which maintains that value is created by organisational producers and is stored inside the products and services they sell.

Quoting Eric von Hippel:

Historically the assumption has been that manufacturers are the innovators, they go and they look at users, understand what they need and then develop something in response. We then went and looked at the histories of innovation and found out that very often, very commercially successful products actually had been developed by users at the leading edge of a market-based trend first. So it appeared that in fact innovation was user-led, which means that the users actually develop prototype products and show their value and use of what they really want.

These lead users (who can be viewed as pre-early adopters, creating their own solutions) have entered into an increasingly ideal epoch in which more and more tools are available every day to innovate: tools of media production and distribution, rapid fabrication tools such as widely available laser cutters and 3D printers, communication with other enthusiasts, etc. This distributed capitalism is the result of the democratization of innovation that Eric Von Hippel wrote about in the aptly titled Democratizing Innovation

. The Support Economy

Below is a great classification of four successful and productive user-led niches:

  • Social Currency Niche — Myspace, Flickr, YouTube: people create content and gain attention and connect with others.
  • Collaborative Niche — Wikipedia, open source software: people come together and perform part of a larger task to reach a common goal.
  • Extractive niche — sort of the unpleasant side of all this in which companies try to exploit free revealing from the crowd, attempting to get something for nothing or next to nothing while ignoring the desires of the crowd.
  • Hybrid niche — combines elements of the above.
  • User Led Services Ecology

    If you ever find yourself scratching your head about exactly what I am talking about, I would highly recommend reading the report.
    (Also wanted to say Hi to Paul.)

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