14 July 2007

Financial Times editorial on how users are transforming innovation

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Financial Times
Eric von Hippel and Michael Schrage published a Financial Times editorial on how users are transforming innovation.

“Denmark has been the first nation to turn this into policy. In 2005, the Danish government established “strengthening user-centred innovation” as a national priority. Sweden’s tradition of “participatory design” has positioned several of its industries to take good advantage of this phenomenon. Britain’s National Endowment for Science, Technology and the Arts has begun funding policy research in user-driven innovation. These early efforts are important and more will follow.”

The article underlines many crucial points: how ingenious leading-edge users – not everyday consumers or profit-focused producers – are becoming the economic engines that drive innovation; that the policy point should not be to invite new subsidies for innovative users: the issue is “empowerment” not subsidy; that national governments and the European Union could use their procurement power and standards-setting influence to ensure that in healthcare, digital technologies, public education and energy networks, user-driven innovation infrastructures are granted parity with proprietary vendors; and that there is great wealth to be grown from proffering platforms for user-developed innovation.

The authors conclude:
“Europe has an extraordinarily well- educated population all-too-frequently frustrated by institutional strictures and intellectual property constraints that make innovation more difficult than it needs to be. Rather than over-rely upon the past century’s innovation mechanisms of venture capital, targeted subsidies and national champions, policymakers should treat this global trend as an innovative opportunity. The rise of user-driven innovation is about the democratisation of innovation – an act of economic empowerment. Boosting economic empowerment is a powerful way of boosting growth. Policies that facilitate greater diversity and democracy of growth are good politics and good economics.”

Eric von Hippel is T Wilson professor of management and Michael Schrage is a researcher at the MIT Sloan School of Management.

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