Abstract
In this paper we report upon a first empirical exploration of the relative efficiency of innovation development by product users vs. product producers. In a study of over 50 years of product innovation in the whitewater kayaking field, we find users in aggregate were approximately 3× more efficient at developing important kayaking product innovations than were producers in aggregate. We speculate that this result is driven by what we term “efficiencies of scope” in problem-solving. These can favor an aggregation of many user innovators, each spending a little, over fewer producer innovators benefitting from higher economies of scale in product development. We also note that the present study explores only one initial point on what is likely to be a complex efficiency landscape.
Highlights
Introduction and overviewRepresentative national surveys have established that millions of users in the household sectors of the U.S, Japan, and the UK spend billions of dollars per year in aggregate in order to create and improve products for their own use
In this paper we report upon a first empirical exploration of the relative efficiency of innovation development by product users vs. product producers
We turn to our findings regarding relative user vs. producer efficiency in the development of important product innovations in the field of whitewater kayaking
Summary
Introduction and overviewRepresentative national surveys have established that millions of users in the household sectors of the U.S, Japan, and the UK spend billions of dollars per year in aggregate in order to create and improve products for their own use (von Hippel, Ogawa and de Jong 2011, von Hippel, de Jong and Flowers 2012). Given the large scale of innovation by users, the relative efficiency of user vs producer product development becomes an important matter. On the basis of these rough descriptive outlines, one might speculate that user innovators as a class might be a great deal less efficient than producer innovators in developing generally-valued products. One might reason that product developers employed by producers could have advantages over user innovators with respect to efficiencies related to specialization and economies of scale. For example, have better product development skills than user innovators. They may have access to much better R&D tools and facilities, justified on the basis of larger volumes of product development undertaken by firms
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