The theory and practice of user‐initiated innovation

Abstract

User‐initiated product innovation occurs when a firm that has invented a novel device first invests in its internal application as a process innovation and second seeks returns from its general marketing. The paper defines the nature and scope of user‐initiated innovation (UII), presents summaries of detailed case histories of its instance, and discusses its explanation and managerial implications. Three modes of user‐initiated product innovation and users’ roles in them are distinguished and three explanations of the functional locus of innovation are critically considered in terms of their explication of empirically‐derived strategies of innovation: the appropriability of benefit, appropriability regimes, and transaction costs theories.