Innovation is rapidly becoming democratized. Users, aided by improvements in computer and communications technology, increasingly can develop their own new products and services. These innovating users - both individuals and firms - often freely share their innovations with others, creating user-innovation communities and a rich intellectual commons. In Democratizing Innovation Eric von Hippel looks closely at this emerging user-centered innovation system, which is affecting both information products and physical products.

Drawing on work done with several coauthors, von Hippel explores why and when users find it profitable to develop new products and services for themselves, and why it often pays users to reveal their innovations freely for the use of all. Drawing on work with Nikolaus Franke, Pam Morrison and others, he documents that product and service development is concentrated among lead user firms and individuals. Lead users that are ahead on marketplace trends do not replicate manufacturer development efforts.

Instead, they develop products that are not yet available. Later manufacturers find many of these user-developed products to be the basis for commercial products. Drawing upon work with Dietmar Harhoff, Joachim Henkel and others, von Hippel reports that user innovation has a positive impact on social welfare, and propose that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it.

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In nationalen Innovationssystemen verhindert oft Markt- und Staatsversagen die volle Entfaltung des vorhandenen Innovationspotenzials. Der Autor enttarnt theoretisch und empirisch die zugrunde liegenden Informationsprobleme, Anreizmechanismen und Mitnahmeeffekte. Ein für Österreich erstmaliges und international wenig untersuchtes Datenmaterial dient dabei der empirischen Schätzung von Input- und Outputadditionalitäten. Dem Autor gelingt der Beleg der zuvor theoretisch abgeleiteten Hypothese: <I>selbstselektive</I> Förderinstrumente sind von höherer Wirksamkeit als besonders häufig eingesetzte Standardinstrumente wie zum Beispiel einfache F&E-Förderzuschüsse. Das Bild wird komplettiert mit zahlreichen praktischen Vorschlägen an den Innovationsförderer zur Anreizoptimierung des Innovationssystems.

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This seminal book has become essential reading for students taking courses in technology management and innovation, and for managers who are responsible for strategic planning. The author shows how the initiative to innovate can come not only form a manufacturer, but also from suppliers, and customers. The author calls these lead users , and the term has come into the business lexicon. A video course based on the book was produced by the MIT TV department and has been distributed to many business schools. The Sources of Innovation has become essential to an understanding of how and where technological innovation takes place. For the first time, the book shows how the assumption that technological innovation is generated by manufacturers is inaccurate. Innovation takes place where it creates the most value, and that can be in a variety of locations, from suppliers to end users. Understanding this fact can facilitate the innovation process, leading to faster and better processes and products.

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