Open and user Innovation Flashcards
What are the characteristics of the innovation process?
(Pavitt, 2005)
1) Matching process:
Innovation processes involve the exploration and exploitation of opportunities for new or improved products, processes or services, based either on advance in technical practice (“know- how”), or a change in market demand, or a combination of the two. Innovation is therefore essentially a matching process.
2) Trial and error or improved understanding process
Innovation is inherently uncertain, given the impossibility of predicting accurately the cost and performance of a new artifact, and the reaction of users to it. It therefore inevitably involves processes of learning through either experimentation (trial and error) or improved understanding (theory).
Explain product, service and process innovation:
- Product innovation: introduce a new or improved product
- Process innovation: introduce a new or improved production process
- Service innovation: introduce a new or improved service
What are the three models of innovation?
1) Private innovation
2) Collective innovation
3) Private-collective innovation
What is the Private innovation model?
- Private investments in the production of innovation.
- Investment and benefits are private
- Governments grant monopolies for inventions that are limited in time: patents designed to make the knowledge available to the public and enable amortization of investments
- The patent creates the incentives to innovate because the patent makes it possible or easier to earn money
- Other mechanisms: secrecy (trade secrets) or innovation speed (obsolescence)
What is the Collective innovation?
- Wide ownership of the innovation: public or somehow collective
- Many contribute to the innovation, directly or indirectly
- Funding is complex: in practice often via the tax payer
- Examples: basic research, think tanks, political movements, associations, private-public partnerships, development cooperations
What is the challenge of the Collective innovation model?
- Collective innovation model needs to solve the public good problem: free riding!
- Individual incentives to benefit without contributing!
- Public good under-provided and overexploited!
- Authority steps in, usually governments!
- Government provides security, street lights, highways etc!
- Prerequisites: legal system, polities, consensus!
- Consequences: Long decision paths, complexity, inefficiency?
1) Explain the difference between public and private goods
2) In the model:
- What is on the axes?
- What are the four categories?
- What category/categories do knowledge goods fall into?
Definition of a public good: no rivalry in consumption and not excludable (private opposite)
What is the Private-Collective innovation model?
- Private efforts to build and produce public goods!
- Individuals and groups innovate at their own costs and effort
- They give the innovation away for free and turn it into a public good
- The public benefits from the innovation
- Examples: Software, political movements, scientific results
1) What model is communal resources part of (relevant for)?
2) What is communal resources?
1) Private-Collective innovation model
2)
- Communal resources are collectively accessible individual benefits. Available during the process of innovating for a public good (as part of a collective process)
- Entering the group discourse and interacting with the peers changes the perception of “costs” (Elster, 1986)!
- Benefits include: learning opportunities, recognition and respect, influence on the technology development!
- Communal resources can replace the “authority” (such as a government) in the collective innovation model (You are only allowed access to the resources if you behave in accordance with the rules and contribute)
How can Open Source Software be an example of private-collective innovation?
- Private time and effort to program!
- Contribution to a community or publication under an OSS license (e.g. GPL,Apache, BSD, MIT, etc.)
- Rewards?!
- Own use, fun in problem solving, creative challenge, reputation among peers, job opportunities and learning, and practice-based motives
What is User Innovation?
1) Who are the users?
2) What is the innovation or what characterise the innovation?
3) What is a lead user?
1)
- User:The person or firm that benefits from use.
- Manufacturer:The person or firm that benefits from sale.!
2)
- Innovation: Anything new that is actually used.!
- Custom needs lead to custom products!
3)
Lead user is a term developed by Eric von Hippel in 1986. His definition for lead user is:
- Lead users face needs that will be general in a marketplace – but face them months or years before the bulk of that marketplace encounters them, and
- Lead users are positioned to benefit significantly by obtaining a solution to their needs.
–> In other words, lead users are users of a product or service that currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs. Because lead users innovate, they are considered to be one example or type of the creative consumers phenomenon, that is, those “customers who adapt, modify, or transform a proprietary offering”.
How is the relationship between user innovation and the three innovation models?
- User innovation can follow all models and lead to entrepreneurial action
- Revealed user innovations become a public good if they are protected against appropriation by license, or
- become a private good if sold or donated to a company!
- However, the private-collective innovation model is likely to describe user innovation well because user innovators frequently reveal freely their innovation to peers
- What is the advantages and disadvantages of Protection of intellectual property?
+ Incentives to innovate
+ Markets for technology
- Diffusion and adoption
- Second generation innovation
What are the types of protection mechanisms?
-Secrecy, Licenses, Copyright, Patents
Briefly: What is Copyrights?
automatic protection of authored work as is (in tangible expression, including machine-mediated)!
Briefly explain closed innovation
1) In closed innovation the firm generates, develops, and commercializes its own ideas
Explain Open Innovation
- In open innovation the firm commercializes both its own ideas and innovations from other firms and buyers.The boundary between the firm and its environment is porous, enabling innovations to flow more easily between the two
Further:
- Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology
- Innovating with partners by sharing risk and sharing reward
- Boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward
- The central idea behind open innovation is that, in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e. patents) from other companies. In addition, internal inventions not being used in a firm’s business should be taken outside the company
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