Consumer Empowerment points to another Economist article relating to open source, partly inspired by Eric von Hippel ‘s Democratizing Innovation. It’s a pretty helpful summary of von Hippel’s arguments.
Traditionally, firms have innovated by sending out market researchers to discover unmet needs among their customers. These researchers report back. The firm decides which ideas to develop and hands them over to project-development teams. Studies suggest that about three-quarters of such projects fail. Harnessing customer innovation requires different methods, says Mr Von Hippel. Instead of taking the temperature of a representative sample of customers, firms must identify the few special customers who innovate.
I find the Economist slant interesting, as with their other recent piece on open sourcing, their support is tempered by a little older-paradigm thinking. Here’s how they end:
At the heart of most thinking about innovation is the belief that people expect to be paid for their creative work: hence the need to protect and reward the creation of intellectual property. One really exciting thing about user-led innovation is that customers seem willing to donate their creativity freely, says Mr Von Hippel. This may be because it is their only practical option: patents are costly to get and often provide only weak protection. Some people may value the enhanced reputation and network effects of freely revealing their work more than any money they could make by patenting it. Either way, some firms are starting to believe that there really is such a thing as a free lunch.
The Economist seem a little amazed at the notion that people might be creative without extrinsic motivation (money) -as if this is some strange new phenomenon. They should read Punished by Rewards.
I’d add that the lunch may be free in the sense that money doesn’t change hands; but the firms that are making user innovation work haven’t got there by doing nothing. they’ve taken some trouble to cultivate their relationships.
For those who like to take about an attention economy, they are paying attention.
I’ve always thought money has always had a rather tempestuous relationship with value, sometimes they go together, often they don’t. Characterising what companies like Lego have done as a kind of free lunch seems to devalue what they and their lead customers have been doing.
(I just did a google image search on paying attention. I was a bit disappointed to find a lot of pictures of students in classrooms. Somehow that doesn’t seem the right way to illustrate the idea any more. Even the one I’ve used here smacks a bit of master-servant, but the dog looks cute.)