Policy implications of user innovation:
measurement and interpretation
The role of users in innovation
activities
Fred Gault
UNU-MERIT and TUT-IERI
5th International Workshop: Sharing Best Practices in R&D and Education
Statistics
Informing National and Institutional Policy
Centro Cientifico e Cultural de Macau, Lisbon
1
Users and Innovation
Users matter
• Firms produce goods and services
– Consumers and other firms use the goods and
services – they are USERS
– Users are a leading source of
• Information for innovation
• Collaboration for innovation
• Users
• Change or develop goods or services for their own use
– Is this innovation?
– Are there policy implications?
– Can this activity be measured?
What is an innovation?
• For statistical purposes, the definition of innovation is taken from
the Oslo Manual (OECD/Eurostat 2005).
www.oecd.org/sti/oslomanual/
• An innovation is the implementation of a new or significantly
improved product (good or service), or process, a new marketing
method, or a new organizational method in business practices,
workplace organization or external relations (OECD/Eurostat 2005,
para. 146).
• A common feature of an innovation is that it must have been
implemented. A new or improved product is implemented when it is
introduced on the market. New processes, marketing methods or
organizational methods are implemented when they are brought into
actual use in the firm’s operations (OECD/Eurostat 2005, para. 150).
Who innovates?
• Firms engaged in process change for their own
benefit are innovative firms as the process
connects to the market
• Firms also make use of products modified or
developed by users. They are innovative –
more on this later
• Consumers changing goods and services for
their own benefit are not
– Unless?
Are consumers innovators?
Consumer modifies or develops a product
What happens to the knowledge?
Knowledge transferred
to
Kind of innovation resulting
Producer
Product innovation for producer (user innovation)
Self as new firm
Product innovation for the entrepreneur (new firm)
Peer Group or
Community of Practice
Not an innovation
No Transfer
Not an innovation
A proposal
• A common feature of an innovation is that it must have been implemented.
A new or improved product is implemented when it is introduced on the
market. New processes, marketing methods or organizational methods are
implemented when they are brought into actual use in the firm’s operations
(OECD/Eurostat 2005, para. 150).
• A common feature of an innovation is that it must have
been implemented. A new or improved product is
implemented when it is made available to potential
users. New processes, marketing methods or
organizational methods are implemented when they are
brought into actual use in the firm’s operations.
Result of the proposal for consumers
Consumer modifies or develops a product
What happens to the knowledge?
Knowledge transferred
to
Kind of innovation resulting
Producer
Product innovation for producer (user innovation)
Self as new firm
Product innovation for the entrepreneur (new firm)
Peer Group or
Community of Practice
Product innovation for the consumer
No Transfer
Not an innovation
Consumers Surveys and Policy
Implications for consumer surveys
•
Divide the consumer responses, giving rise to the large
signal in the surveys, into four categories using a question
like:
___________________________________________________
Did you:
1. transfer the knowledge to a producer;
2. keep it yourself and start a business;
3. share it with a peer group or community of practice
(potential users); or,
4. keep the knowledge and use it yourself?
___________________________________________________
Policy implications?
• Cases 1 and 2 are covered by CIS in Europe and CIS-like
surveys. In the US, the NSF Business R&D and Innovation
Survey (BRDIS) is moving in this direction.
• Innovation and industrial policies are in place
– Small Business Innovation Research (SBIR)
– R&D tax credit
– …
• Could encourage
– Firms to seek innovations from consumers (see next section)
• Not information, not collaboration, but innovations
Implications?
• Cases 3 and 4 can be probed by social surveys
– General Social Survey
– American Community Survey
– Consumer expenditure surveys
• Social policy?
– Building an innovation culture
• Education at all levels (sharing of knowledge)
• Innovation fairs, prizes and recognition
– Supporting consumer innovation
• Programs to help communities of practice or peer groups to commercialize
knowledge
Firms and Users
Firms and users
• Finland added questions to its 2010 CIS
– Rank the importance of the statements
• Users modified existing products, and your enterprise further
developed and commercialized it
• Users developed a new product and your enterprise further
developed and commercialized it
– They found that firms that ranked user modification or
development at high or medium level had a higher
propensity to produce new to the market product
innovations than new to the firm innovation.
• That was an interesting result, but wait for the next presentation!
Firms and users
• For CIS 2012 Portugal and Switzerland added the
Finnish questions and two more:
– During the three years 2010-2012, did your enterprise
introduce new or significantly improved products (goods or
services) that were partly or entirely developed by
customers and users of the product? Y/N.
– If yes, what percentage of the total turnover corresponds to
new or significantly improved products (goods or services)
put on the market by your enterprise during the three years
2010-2012?
A research question concerning
firms, consumers and innovation
A research question
using CIS results
• Following the product question in CIS is the ‘Who
did it’ question
– Who developed this product innovation?
1.
2.
3.
4.
Your enterprise by itself
Your enterprise together with other enterprises or institutions
Your enterprise by adapting or modifying goods or services
originally developed by other enterprises or institutions
Other enterprises or institutions
• What is the correlation between the first new
Portuguese question and 3 and 4 above?
A research question
• If firms responding to the first Portuguese
question also respond to options 3 or 4 of the
‘Who did it?’ question, There is:
– Confirmation that the firm knows that it is
adopting or adapting user products – leading to
• A possibility of analysing the CIS ‘Who did it?’
question to identify the adoption or adapting of user
products in other CIS surveys
– There are still some issues
• Consumers are not distinguished from other firms
• More work to be done
More?
•
•
•
•
The Oslo Manual (Now being revised)
– www.oecd.org/sti/oslomanual/.
The proposed change to the definition
– Fred Gault (2012), User innovation and the market, Science and Public Policy,
39, pp. 118-128.
A review of the subject
– de Jong, Jeroen P.J. and Eric von Hippel (2013), User innovation: Business
and consumers, in Fred Gault (ed.), Handbook for Innovation Indicators and
Measurement, Cheltenham, UK and Northampton MA, USA: Edward Elgar.
(www.e-elgar.com)
Analysis of the Finnish questions in their 2010 CIS
– Kuusisto, Jari, Mervi Niemi and Fred Gault (2014) User Innovators and their
influence on innovation activities of firms in Finland, UNU-MERIT Working
Paper 2014-03.