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Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation

37 Pages Posted: 9 Nov 2009 Last revised: 10 Jun 2012

Carliss Y. Baldwin

Harvard Business School, Finance Unit

Eric A. von Hippel

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: August 2010

Abstract

In this paper we assess the economic viability of innovation by producers relative to two increasingly important alternative models: innovations by single user individuals or firms, and open collaborative innovation. We analyze the design costs and architectures and communication costs associated with each model. We conclude that both innovation by individual users and open collaborative innovation increasingly compete with and may displace producer innovation in many parts of the economy. We explain why this represents a paradigm shift with respect to innovation research, policymaking, and practice. We discuss important implications and offer suggestions for further research.

Original November 2009. This revision 2010.

Suggested Citation

Baldwin, Carliss Y. and von Hippel, Eric A., Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation (August 2010). Harvard Business School Finance Working Paper No. 10-038; MIT Sloan Research Paper No. 4764-09 . Available at SSRN: https://ssrn.com/abstract=1502864 or http://dx.doi.org/10.2139/ssrn.1502864

Carliss Y. Baldwin (Contact Author)

Harvard Business School, Finance Unit ( email )

Boston, MA 02163
United States

Eric Von Hippel

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E62-455
Cambridge, MA 02142
United States
617-253-7155 (Phone)
617-253-2660 (Fax)

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