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Consumers: The Most Powerful Innovation Drivers

We often talk about here about innovation and its elusive nature. While innovation is considered to be one of the cornerstones of any successful business, the road to it is sinuous and unclear. In the past, we’ve introduced different methods businesses use to spark innovation, whether it is through exporting, building their communities, or changing their culture and values.

Today, I would like to introduce another approach to innovation, one that refers to the consumer as the most valuable ingredient to business novelty. This new innovation approach, also known as the consumer-innovator paradigm, views the consumer not as a passive recipient, but rather as a significant central player in business innovation.

Eric Von Hippel, Susumu Ogawa, and Jeroen P.J. de Jong—three researchers from MIT, Kobe University, and RSM Erasmus University, respectively—conducted a global research in Japan, the UK, and the US to examine the scope and extent of this new approach to innovation.

Their survey reveals that across these three countries, millions of citizens innovate and modify consumer goods to better fit their needs. The survey also shows that if you are a highly educated male with a technical degree, you are much more likely (260 percent in the UK, 210 percent in the US, and 140 percent in Japan) to be an innovator.

The survey also discusses how the consumer-innovators protect and spread their invention—or rather, how they don’t. On average, only 3.33 percent of consumer-innovators protect their creation by acquiring intellectual property rights, only 20 percent of consumer-innovators share the knowledge/product they created with others, and only 9.33 percent of consumers’ inventions are really adopted by others.

What does this mean for entrepreneurs? For entrepreneurs, more than for large companies and individual consumers, consumer-innovators propose a great opportunity. The survey shows that consumer-innovators have no real intention of making a business out of their invention, leaving it for others to produce and market. Moreover, because most inventions are created to answer the needs of a specific consumer, they are more likely, at least in the beginning, to be relevant to niche markets rather than the mass market. Therefore, it is reasonable to assume that large companies will stay away from consumer-innovators and leave the control in the hand of entrepreneurs.

Some companies such as Quirky are a living proof that consumer-innovators are alive and kicking. However, not all inventions created by consumers are marketable. Using your community, customers, and fellow business owners here at PlanetSoho to assess the marketability of consumers’ inventions should always be the first step.

Based on: Von Hippel, Eric, Susumu Ogawa, and Jeroen P.J. de Jong. “The Age of the Consumer-Innovator.” MIT Sloan Management Review. Fall 2011 (2011): n. page. Web. 6 Jul. 2013.

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