Free Innovation
By Eric von Hippel
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.
