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User-producer interaction as a driver of innovation: costs and advantages in an open innovation model

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  • Keld Laursen

Abstract

While drawing on theories of distributed innovation and search, we conjecture that because a lot of important knowledge can only be obtained through the use of a product, the use of customer knowledge is beneficial for firms' innovative performance. However, the use of customer knowledge also has an important downside as customers may often be conservative (for many good reasons), forcing producer firms to search for new solutions along established paths, while shying away from truly new and promising opportunities. In this paper these two forces are reconciled through an argument stating that there is an inverse U-shaped relationship between the intensity of the use of customer knowledge and innovative performance. We hypothesize that the negative effect at high levels of intensity of the use of customer knowledge is offset by firms' broader search strategies in terms of the breadth of external search among other sources of innovation: If firms search more broadly among several sources of innovation, they are much more likely to enjoy the benefits of customer knowledge, while avoiding important negative aspects. Overall, we find empirical support for these conjectures. Copyright , Beech Tree Publishing.

Suggested Citation

  • Keld Laursen, 2011. "User-producer interaction as a driver of innovation: costs and advantages in an open innovation model," Science and Public Policy, Oxford University Press, vol. 38(9), pages 713-723, November.
  • Handle: RePEc:oup:scippl:v:38:y:2011:i:9:p:713-723
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    File URL: http://hdl.handle.net/10.3152/030234211X13070021633242
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    Cited by:

    1. JinHyo Joseph Yun & EuiSeob Jeong & JinSeu Park, 2016. "Network Analysis of Open Innovation," Sustainability, MDPI, Open Access Journal, vol. 8(8), pages 1-21, July.
    2. repec:aae:journl:v:13:y:2017:i:1:p:7-24 is not listed on IDEAS
    3. Harirchi, Gouya & Chaminade, Cristina, 2014. "Exploring the Relation Between the Degree of Novelty of Innovations and User–Producer Interaction Across Different Income Regions," World Development, Elsevier, vol. 57(C), pages 19-31.
    4. Chaminade , Cristina & Plechero , Monica, 2015. "The role of geographical proximity in the international knowledge flows of European firms: an overview of different knowledge transfer mechanisms," Papers in Innovation Studies 2015/30, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    5. Claudio Fassio, 2018. "Export-led innovation: the role of export destinations," Industrial and Corporate Change, Oxford University Press, vol. 27(1), pages 149-171.
    6. Monica Plechero & Cristina Chaminade, 2016. "Spatial distribution of innovation networks, technological competencies and degree of novelty in emerging economy firms," European Planning Studies, Taylor & Francis Journals, vol. 24(6), pages 1056-1078, June.
    7. repec:eee:enepol:v:120:y:2018:i:c:p:38-51 is not listed on IDEAS
    8. Jordan Robert Gamble & Michael Brennan & Rodney Mcadam, 2016. "A Contemporary And Systematic Literature Review Of User-Centric Innovation: A Consumer Perspective," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-45, January.
    9. Greco, Marco & Grimaldi, Michele & Cricelli, Livio, 2017. "Hitting the nail on the head: Exploring the relationship between public subsidies and open innovation efficiency," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 213-225.
    10. Harirchi , Gouya & Chaminade , Cristina, 2013. "User-producer interaction and the degree of novelty of innovations: a global perspective," Papers in Innovation Studies 2013/27, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    11. D'Este, Pablo & Amara, Nabil & Olmos-Peñuela, Julia, 2016. "Fostering novelty while reducing failure: Balancing the twin challenges of product innovation," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 280-292.
    12. repec:eee:techno:v:68:y:2017:i:c:p:35-43 is not listed on IDEAS
    13. Heuschneider, Sara & Herstatt, Cornelius, 2016. "External search for exploration of future discontinuities and trends: Implications from the literature using co-citation and content analysis," Working Papers 92, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.

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