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Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation

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  • Carliss Y. Baldwin

    () (Harvard Business School, Finance Unit)

  • Eric von Hippel

    () (Massachusetts Institute of Technology)

Abstract

In this paper we assess the economic viability of innovation by producers relative to two increasingly important alternative models: innovations by single user individuals or firms, and open collaborative innovation projects. We analyze the design costs and architectures and communication costs associated with each model. We conclude that innovation by individual users and also open collaborative innovation increasingly compete with - and may displace - producer innovation in many parts of the economy. We argue that a transition from producer innovation to open single user and open collaborative innovation is desirable in terms of social welfare, and so worthy of support by policymakers.

Suggested Citation

  • Carliss Y. Baldwin & Eric von Hippel, 2009. "Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation," Harvard Business School Working Papers 10-038, Harvard Business School.
  • Handle: RePEc:hbs:wpaper:10-038
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