Advantages Of User Innovation

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The Advantages of User Innovation supporting document

Introduction
As the term suggests, User Innovation describes innovation created by any form of user, in contrast to the “traditional” innovation approach which focuses on the producer only. It forms a major part of the current trend of Open Innovation, which is expected to become an essential part and standard in most companies’ innovation management within the next 10 years. Open Innovation in this context means “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and to expand the markets for external use of innovation, respectively” (Chesbrough, 2006). In general, Open Innovation is a comparably new field of study defined in the late 1980`s, and research focuses still mostly on case studies
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The market share in year 5 of the Lead User’s products reached 68%, compared to 33%. Finally, the estimated sales are more than 8 times higher compared to traditional product development.
Reasons
One of the reasons for its success is the following: Lead Users, who are invited to Lead User Workshops, have needs that are ahead of the rest of the market. Rather than market research, which focuses on the average users, Lead Users reveal what the majority of the market will demand in the future – even before Early Adopters do. Then, they help during the workshop to readily develop products that are perfectly suited to this future demand. When doing this, they are not biased by functional fixedness, which leads to the strong tendancy to create new product lines instead of incremental innovations.
All in all, the Lead User method represents the perfect recipe to create an incredibly profitable monopoly situation when launching the new product.
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