Users as Innovators and Entrepreneurs in the Context of Sustainable Development

Essay

Users as Innovators and Entrepreneurs in the context of sustainable development

1. Introduction

Considering the environmental, social and economic challenges we are currently facing, sustainability plays a major role in today’s global development. Some examples which call for more sustainable development are the exploitation of finite resources or the unequal distribution of resources nowadays and between the generations (Belz & Arnold 2011, p.51).

But what is sustainable development? A common quoted definition is from “Our Common Future”, also known as the Brundtland Report: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (ed. WCED 1987, p.41). This definition highlights the essential needs of the world's poor and the limitation of the environment's ability to meet present and future needs.

In order to target sustainable development, many different aspects need to be considered and addressed. One of these aspects is a change in the production and consumption patterns and the offered goods in general, which need to become more sustainable. Accordingly, the representatives of the United Nations Conference on Sustainable Development emphasised “The future we want” that “changes in the way societies consume and produce are indispensable for achieving global sustainable development” in their resulting document (United Nations 2012, p.43).

To achieve this change, investments in innovations are fundamental . According to von Hippel “users of products and services - both firms and individual consumers -“ are a valuable source for innovations (Hippel 2005, p.1). As users can be innovators the important question remains, whether users as innovators can contribute to sustainable development and how they can do this. These questions will be explained in more detail in the following.

2. Users as Innovators and Entrepreneurs

Considering the users themselves, two different types of user-innovators emerge: the intermediate users and the consumer users. “Intermediate users are firms such as firms that use equipment and components from producers to produce goods and services. Intermediate users also include, for example, scientists, librarians, webmasters, and surgeons. (…) [Whereas] consumer users - users of consumer goods - are typically individual end customers or a community of end users.” (Bogers, Afuah & Bastian 2010, p.859).

Both user types usually innovate because they expect to benefit from using the innovation (Bogers, Afuah & Bastian 2010 p.861).

Innovative users are often so-called lead users, who can be both intermediate and consumer users (Bogers, Afuah & Bastian 2010, p.862).

Lead users are “users whose present strong needs will become general in a marketplace moth or years in future. (…) Moreover, since lead users often attempt to fill the need they experience, they can provide new product concept and design data as well”. These creative users can help to identify important market or technical trends and can provide valuable new product concepts and designs. (Hippel 1988, p.107)

Wagner beliefs that “sustainability-improving innovation seems to require (technologically) radical innovations that massively improve the environmental or social performance of goods or production processes, while not altering consumer benefits and utility”. In addition, it needs “incremental (product- and process-related) innovations in the existing production and consumption systems.” (2012, p.2)

As “major product innovations in some fields, such as scientific instruments, are almost always developed by product users” (Hippel 1988, p.4-5), producers can make use of user innovations to make their processes and products more sustainable. Especially, as it can be challenging to achieve these ambitious innovation goals solely as a producer, operating in Closed Innovation processes.

Traditionally the manufacturer is in charge of the development, production and sales of goods. And the consumer takes over the purchase, usage and removal (Belz & Arnold 2011, p.13-14). These strict allocations are linked to the traditional production process, where all ideas and innovations emerge inside the company without any contribution of users or other external sources. This is what Chesbrough (2008, p.xx) describes as Closed Innovation. Figure 1-1 shows this closed proceed based on a product development process. Internal ideas enter the process from the left and afterwards are translated into product solutions. Successful concepts enter the market on the right.

However, due to several reasons pure Closed Innovation processes are not expedient anymore (Chesbrough 2008, p.xxiv). This is due to the “growing mobility of highly experienced and skilled people” who pass on their knowledge to other firms, for example. Another reason is the “increasingly fast time to market for many products and services, making the shelf life of a particular technology even shorter.” (Chesbrough 2008, p.xxii - xxiii)

Figure 1. Closed and Open Innovation http://www.michaelbartl.com/article/open-innovation/ accessed: 15.05.2015

To achieve a more sustainable development and production process, Chesbrough suggests the approach called Open Innovation (Chesbrough 2008, p.xxiv). This term was introduced in 2003 and describes the integration of external input, such as users, in different stages of the innovation process. Figure 1-2 depicts the Open Innovation process. Ideas can come from the company, as well as from the outside world, such as users. Parallel innovations, represented by the small funnels, can emerge along the whole process. For example, in terms of start-ups or external research firms which emerge from an idea in the initial innovation process or in terms of external firms that bring in knowledge or products.

This is where users can contribute as innovators in a producer’s product development process. One example that shows sustainability-related user innovation is car sharing, which initially was launched by users. This innovation was adapted by companies and can be found in many markets nowadays (Schaltegger & Wagner 2011, p.14).

In an Open Innovation process, users can not only contribute to innovations, but also share their needs and concerns. This is valuable, as producers need to understand consumers’ concerns and needs to design sustainable products (Nidumolu,

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