Free Innovation

Front Cover
MIT Press, Nov 10, 2016 - Business & Economics - 240 pages
A leading innovation scholar explains the growing phenomenon and impact of free innovation, in which innovations developed by consumers and given away “for free.”

In this book, Eric von Hippel, author of the influential Democratizing Innovation, integrates new theory and research findings into the framework of a “free innovation paradigm.” Free innovation, as he defines it, involves innovations developed by consumers who are self-rewarded for their efforts, and who give their designs away “for free.” It is an inherently simple grassroots innovation process, unencumbered by compensated transactions and intellectual property rights.

Free innovation is already widespread in national economies and is steadily increasing in both scale and scope. Today, tens of millions of consumers are collectively spending tens of billions of dollars annually on innovation development. However, because free innovations are developed during consumers' unpaid, discretionary time and are given away rather than sold, their collective impact and value have until very recently been hidden from view. This has caused researchers, governments, and firms to focus too much on the Schumpeterian idea of innovation as a producer-dominated activity.

Free innovation has both advantages and drawbacks. Because free innovators are self-rewarded by such factors as personal utility, learning, and fun, they often pioneer new areas before producers see commercial potential. At the same time, because they give away their innovations, free innovators generally have very little incentive to invest in diffusing what they create, which reduces the social value of their efforts.

The best solution, von Hippel and his colleagues argue, is a division of labor between free innovators and producers, enabling each to do what they do best. The result will be both increased producer profits and increased social welfare—a gain for all.

 

Contents

1 Overview of Free Innovation
1
2 Evidence for Free Innovation
19
3 Viability Zones for Free Innovation
37
4 Pioneering by Free Innovators
53
5 Diffusion Shortfall in Free Innovation
65
6 Division of Labor between Free Innovators and Producers
77
7 Tightening the Loop between Free Innovators and Producers
89
8 The Broad Scope of Free Innovation
101
9 Personality Traits of Successful Free Innovators
115
10 Preserving Free Innovators Legal Rights
127
11 Next Steps for Free Innovation Research and Practice
141
Appendix 1 Household Sector Innovation Questionnaire
155
Appendix 2 Modeling Free Innovations Impacts on Markets and Welfare
163
References
189
Index
215
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About the author (2016)

Eric von Hippel, the T. Wilson (1953) Professor of Technological Innovation at the MIT Sloan School of Management, is a leading research scholar on the economics and management of free, open, and distributed innovation.

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