Chapter 9

Improvements in technology and more readily available equipment are making it easier for users to become high quality innovators. Easier access to information means users also have an increased ability to make use of vast libraries of useful documentation. The modern advances apply to all kinds of industries. Low cost of design and prototyping makes the allocation problem of user innovation much less significant.

Manufacturers may be forced to adapt to user innovation. It becomes increasingly difficult for large companies to keep up with innovating and producing. Many companies adapt by only manufacturing items that have been designed and shared by users. In markets such as kite-surfing, it has been generally accepted that designs by users are generally as good as designs made by manufacturers. In this instance, a company began producing designs created and shared by users and it was able to do so at lower prices than companies that were focused on both design and production. In some cases, as with the creation of open source software, manufacturers (or large companies) are not at all necessary in the creation of new products.

It is now a more common occurrence for manufacturers to work with the community and lead users in particular, to produce cheap and effective solutions. This is especially relevant in the sporting goods industry. Manufacturers may have varying levels of interaction in product design, from modifying user made creations, to custom machine shops or foundries, which make customer designed products to order.

A trend of supplying toolkits and platform products to users is very common. This allows software companies to create products that are very customizable for the user, without revealing core information. However, there are some problems when users wish to make modifications to the core program to better suit their needs. A similar trend can be found in the gaming industry. “Mods” are user created add-ons to games, many of which attract many users. Products offered complementarily to free ones give manufacturers an ability to make profit and thus benefit from open knowledge. An example is IBM created servers that are shipped with open source software installed.

Reflection:

This chapter helps clarify the way user innovation works with respect to manufacturers and profit seeking entities. Von Hipple gives some good examples though some are outdated. It was often difficult to tell just how widespread certain business strategies are and whether or not they have remained successful.