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To own or not to own: How ownership affects user innovation - An empirical study in the German rowing community

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  • Tietze, Frank
  • Pieper, Thorsten
  • Herstatt, Cornelius
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    Abstract

    Prior research on user innovation has concentrated on markets in which products (e.g., mountain bikes, kitesurfing equipment, tools, etc.) are typically purchased by those users who modify them. However, in numerous markets, this is not the case, for example, those in which equipment is rented. Moreover, firms increasingly servitize, selling functionality instead of products. Thus, product ownership is being transferred to users less and less. Instead of purchasing products, users increasingly rent or lease equipment. Consequently, our research investigates the impact of product ownership on user innovation behavior. We question whether absent ownership is an innovation barrier, negatively impacting users' propensity to innovate. This should be particularly relevant to firms that collaborate with users, scouting for their ideas. This study was conducted in the German rowing community. In contrast with previously studied sports markets, equipment ownership in rowing often remains with sport clubs and not with individual users. Following a pre-study, we distributed a survey to the members of 410 clubs enlisted in the German Rowing Federation's roster. Our approach yielded 743 responses. We present results from multivariate ordinal and logistic regressions for two dependent variables (idea generation and realized ideas), differentiating between three ownership types (private, non-private with dedicated use, and non-private with shared use). Our results reveal that private ownership has significant positive effects on user innovation behavior. Users, who own their equipment develop significantly more innovative ideas and have a significantly higher probability to realize ideas than users who use equipment that is owned by a third party. We find that private ownership positively moderates use experience's impact on the development and realization of ideas. The results imply that manufacturers should be aware of the effect that ownership could have, particularly when offering services or in situations where ownership rights are not transferred to users (e.g., leasing models). We discuss measures to remedy the negative impact of absent ownership, such as equipment sponsorships complemented by specific use contracts, experiment labs, and insurances. --

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    Bibliographic Info

    Paper provided by Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management in its series Working Papers with number 73.

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    Date of creation: 2013
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    Handle: RePEc:zbw:tuhtim:73

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    1. Riggs, William & von Hippel, Eric, 1994. "Incentives to innovate and the sources of innovation: the case of scientific instruments," Research Policy, Elsevier, vol. 23(4), pages 459-469, July.
    2. Henkel, Joachim & von Hippel, Eric, 2003. "Welfare Implications of User Innovation," Working papers 4327-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    3. Viktor Braun & Cornelius Herstatt, 2008. "The Freedom-Fighters: How Incumbent Corporations Are Attempting To Control User-Innovation," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 12(03), pages 543-572.
    4. von Hippel, Eric, 1976. "The dominant role of users in the scientific instrument innovation process," Research Policy, Elsevier, vol. 5(3), pages 212-239, July.
    5. Martin Schreier & Stefan Oberhauser & Reinhard Prügl, 2007. "Lead users and the adoption and diffusion of new products: Insights from two extreme sports communities," Marketing Letters, Springer, vol. 18(1), pages 15-30, June.
    6. Luthje, Christian & Herstatt, Cornelius & von Hippel, Eric, 2005. "User-innovators and "local" information: The case of mountain biking," Research Policy, Elsevier, vol. 34(6), pages 951-965, August.
    7. Furubotn, Eirik G & Pejovich, Svetozar, 1972. "Property Rights and Economic Theory: A Survey of Recent Literature," Journal of Economic Literature, American Economic Association, vol. 10(4), pages 1137-62, December.
    8. Dachs, Bernhard & Biege, Sabine & Borowiecki, Marcin & Lay, Gunther & Jäger, Angela & Schartinger, Doris, 2012. "The Servitization of European Manufacturing Industries," MPRA Paper 38873, University Library of Munich, Germany.
    9. Fuller, Johann & Jawecki, Gregor & Muhlbacher, Hans, 2007. "Innovation creation by online basketball communities," Journal of Business Research, Elsevier, vol. 60(1), pages 60-71, January.
    10. Christina Raasch & Cornelius Herstatt & Phillip Lock, 2008. "The Dynamics Of User Innovation: Drivers And Impediments Of Innovation Activities," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 12(03), pages 377-398.
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