From user demand to manufacturer design a review of the literature on user innovation

From user demand to manufacturer design A Review of the Literature on User Innovation SHAO Dong (B.Eng., Zhejiang University) A THESIS SUBMITTED FOR THE DEGREE OF MASTER OF ENGINEERING DIVISION OF ENGINEERING & TECHNOLOGY MANAGEMENT NATIONAL UNIVERSITY OF SINGAPORE SUPERVIED BY A/P Jeffrey Lee Funk 2011 NATIONAL UNIVERSITY OF SINGAPORE From user demand to manufacturer design A Review of the Literature on User Innovation SHAO Dong (Donald) DIVISION OF ENGINEERING & TECHNOLOGY MANAGEMENT NATIONAL UNIVERSITY OF SINGAPORE SUPERVIED BY A/P Jeffrey Lee Funk 2011 -1- Acknowledgment The completion of this thesis would not be achieved without the help from my supervisor, colleagues, friends and my family, who keep supporting me throughout the whole journey of my graduate studies. I would like to take this opportunity to express my sincere appreciation to all of them. First, I would like to thank my supervisor A/P Jeffrey Lee Funk, for his continuous guidance and encouragement, helping me not only finish this research project, but also improve my personal aptitudes in thinking, analyzing, communicating and collaborating with different people. As well, I would like to thank other professors in the Division of Engineering and Technology Management of National University of Singapore. They are Prof. Hang Chang Chieh, Prof. Liu Shang-Jyh, A/P Amit Jain, and Dr Annapoornima M. Subramanian. Prof. Hang Chang Chieh, as the head of the D-ETM, keeps helping me during graduate study. In my graduate study period, I have learnt so much from all these Professors. I am also very grateful for kindly support and help from the Division administrative staffs during my graduate studies. They are Ms Patricia Tng, Ms Mavis Chin, and Mr Teo Fang Pin. Finally, I would like to thank my colleges, friends and family for their understanding, support and encouragement especially when I confronted with difficulties and -2- depressions. Especially, my loving parents and girlfriend always help me keep optimistic and encourage me to overcome all the obstacles. Without them, the completion of this thesis would not have been possible. -3- Table of content Acknowledgment ................................................................................................................ 2  Table of content .................................................................................................................. 4  Summary ............................................................................................................................. 5  List of Tables ...................................................................................................................... 6  List of Figures ..................................................................................................................... 7  Chapter 1 Introduction ........................................................................................................ 8  1.1 Background ............................................................................................................... 8  1.2 Motivation and Objective ....................................................................................... 11  1.3 Methodology ........................................................................................................... 11  1.4 Structure of the thesis.............................................................................................. 13  Chapter 2 Focal concept and literature classification ....................................................... 15  2.1 Introduction ............................................................................................................. 15  2.2 Focal concepts......................................................................................................... 15  2.2.1 User .......................................................................................................... 15  2.2.2 User innovation ........................................................................................ 15  2.2.3 User centered innovation ......................................................................... 17  2.2.4 Lead user theory and method ................................................................... 19  2.2.5 Design space ............................................................................................ 20  2.2.6 Stickiness of information ......................................................................... 20  2.3 Overview and system of the research stream .......................................................... 22  Chapter 3 Reflective review within sub-domain .............................................................. 24  3.1 Case study of user innovation and entrepreneurship .............................................. 24  3.1.1 Innovation developed by end consumers ................................................. 25  3.1.2 Innovation developed by intermediate users............................................ 27  3.1.3 New Typical Cases .................................................................................. 30  3.2 Lead User Theory testing ........................................................................................ 35  3.3 Lead user method .................................................................................................... 39  3.4 User preference ....................................................................................................... 43  3.5 Toolkits for user innovation and custom design ..................................................... 46  3.6 Profit distribution and strategies of different entities ............................................. 50  Chapter 4 Discussion ........................................................................................................ 53  4.1 The inner connection of user innovation research flow .......................................... 53  4.2 Linking research on user perspective with other important issues: ........................ 55  4.2.1 Open innovation ....................................................................................... 55  4.2.2 Complementary assets and related theory................................................ 57  4.2.3 Intellectual Property related issue ............................................................ 58  4.3 Implications and new areas for future research: ..................................................... 59  Reference .......................................................................................................................... 62  Appendix: ......................................................................................................................... 73  I．Industrial analysis .................................................................................................... 73  II. Preliminary patent analysis on CT ........................................................................... 84  -4- Summary The goal of this thesis is to better understand the flow and potential directions of research on user innovation. For example, how and why are the sources of some innovations from users and not from manufacturers? How and why do some innovations from users end up replacing products offered by manufacturers? Thus, this thesis reviews existing research articles that address user innovation from a number of perspectives. It classifies these studies into subcategories that are normally used by scholars on user innovation. Papers in each subcategory are critically reviewed and summaries of their findings are provided. Moreover, the internal connection between sub-domains and the implications of each sub-domain are discussed to identify potential research questions for further study in the future. Previous studies suggest large differences for user innovation between end users (e.g., extreme sports and e-sports fans) and intermediate users (e.g., medical surgeons). From the process of classifying studies into sub-categories, I find that the detailed investigations of lead user theory and the detailed study on developments of toolkits for user innovation are less sufficient in the area of intermediate user focused industry than end-user focused industry. Hence, short case studies on the medical device industry are included in the thesis in order to enrich the existing literature on intermediate user innovation. Overall, this thesis reveals the internal relationship and rational connection inside each research area of user innovation, and it has also advanced the knowledge in the management of innovation with perspective from the demand side, with discussion on driver and implication of user centered innovation. -5- List of Tables Table 2.1 Characteristics of different user activities in all innovation steps ............ 18  Table 2.2 Current research subfields of user innovation .......................................... 22  Table 3.1 Summary of published articles on innovation developed by end consumers ........................................................................................................................... 27  Table 3.2 Summary of published articles on innovation developed by intermediate users .................................................................................................................. 29  Table 3.3 Examples of user innovator founded firms ............................................... 34  Table 3.4 Summary of published articles on testing of lead user theory .................. 37  Table 3.5 Summary of published articles on lead user method study ...................... 41  Table 3.6 Summary of published articles on user preference research..................... 45  Table 3.7 Summary of published articles on toolkits for user innovation and custom design ................................................................................................................ 48 -6-   List of Figures Figure 2.1 The Typical Steps in the development and diffusion of user innovation. 16  Figure 3.1 Equilibrium between user-manufacturer and established firms .............. 50 Figure 3.2 Game theory analysis of options among multiple entities....................... 52 Figure 4.1 Inner connection of user centered innovation research flow ................... 53 Figure 4.2 Knowledge flow and connection of open innovation and user innovation ........................................................................................................................... 56 Figure 4.3 Multiple roles of users in intermediate user dominated industries .......... 61 -7- Chapter 1 Introduction 1.1 Background Studies on technological innovation have attracted the increasing attention of researchers in the field of management over the last few decades. A number of influential contributions have suggested the distinctive process and the patterns of innovation in different historical periods and industrial settings. (Dosi, 1982; Freeman et al., 1982; Pavitt, 1984; Henderson & Clark, 1990) Traditionally, when “innovation” is introduced within a study of management, it is often assumed to be some novel promising solution or improvement from companies, and these established companies often make great profit from these innovations. Industrial firms are usually categorized into product manufacturer or service provider. Recently, updated empirical research have documented that the input or the source of innovation may also be from outside of such entities as product manufacturer or service provider. For instance, earlier research reported some producers achieved critical success via specially designed products for the emerging needs of their customers. (Enos, 1962; Freeman, 1968) Other researches have focused on users and their role in the overall innovation process. In particular, many advanced users have developed new products or solutions to serve their own needs, and then some of these innovations have diffused sometimes because user innovators have started their business. This “user innovation” phenomenon has sparked a -8- new research stream that has advanced research in classical managerial research areas, such as firm boundaries, industry dynamics and entrepreneurship. (von Hippel, 1983; Baldwin and von Hippel, 2006; Franke and Shah, 2003)   Empirical research found that users rather than manufacturers are the major actual developers of some new products and services, and that they are a major locus of innovative activity in the economy. This finding has opened up new area for exploration in fields ranging from economics to management of technology, from organizational behavior to marketing research. Examples of these new fields include patterns of innovation by users, characteristics of innovating users, design of a user-centered innovation process, economics of a distributed innovation process that includes users as innovators, and social welfare implications of innovations by users. Enos (1962) and Freeman (1968) stated that some chemical production processes such as oil refining were developed by user firms at that time. Eric von Hippel (1988) pointed out that many products and services are actually developed by users, from whom manufacturers get innovative ideas. This is because when a small number of individual users face problems that the majority of consumers do not confront, even imagine, these minorities have no choice but to develop modifications to existing products by themselves, to solve their issues, since generally products are developed to meet the wide market needs. Often, user innovators will share their ideas in user community while some of them attempts make profit from prototype of promising innovation. -9- Users usually have diversified preference and unsatisfied demand when they use a product or experience a service (Shan & Tripsas, 2007). Usually, the more unsatisfied need a user encounters, the higher is their desire to meet these needs. If available products or services on the market do not meet these needs, users are usually the first entity to identify this situation and seek a solution or develop an innovation by themselves. Users often have another advantage over other potential innovators, especially manufacturers, with respect to conducting and protecting innovations from imitators. User innovators can identify the unsatisfied demand and profit from the resulting innovation while keeping it in house as a trade secret. This option is seldom available to manufacturers, who typically must reveal an innovation in the form of a new product or service to potential adopters if they hope to sell it and thus profit from it. (Harhoff et al, 2003) - 10 - 1.2 Motivation and Objective Based on an increasing attention and interest in research about the phenomenon and tendency of user innovation, a classified and comprehensive review of technological innovation management literature with the perspective of users is useful and meaningful. The objective of this thesis is: 1) To compile and categorize the growing literature on innovation management from the perspective of the demand side, including individual users and downstream firms. 2) To assess and critique detailed research stream of the literature in each subcategory. 3) To enrich and extend this research stream for future further research. 1.3 Methodology In this review study, papers are mainly selected from prestigious academic management journals: Academy of Management Review, Administrative Science Quarterly, IEEE Transactions on Engineering Management, International Journal of Technology Management, Journal of Product Innovation Management, Management Science, Strategic Management Journal, R&D Management and Research Policy as well as the Harvard Business Review and Sloan Management Review. In addition, some landmark books are also reviewed in this thesis to obtain a - 11 - comprehensive understanding of technological innovation management, especially researches with the perspective from user side. These resources allowed us to frame classic and new theories as well as principles and tools to enrich our understanding of technological innovation management, build a preliminary system to access existing literature and find new directions for future research. This thesis classifies related studies into subcategories which are commonly accepted by scholars in this domain. Literature in each subcategory are critically reviewed with summaries about focal research questions, mythology, findings and results, which shed more light to the knowledge on this particular pattern of innovation generated by users’ innovating activities. Moreover, the internal connection and implication of sub-domain are also discussed to identify potential research questions for further study in the future. From the process of classified reviewing, I find that detailed researches (i.e., testing of lead user theory and toolkits for user innovation) are less sufficient in the area of intermediate user centered innovation. Moreover, intermediate users have more influential impact upon manufacturers in the process of new product development than end customers. Hence, new case studies in medical device industry are included in the thesis to enrich the existing system of this specific research area. (The industrial analysis and patent based case study of medical device industry are stated in the appendix) - 12 - 1.4 Structure of the thesis Reminder sections of the thesis are organized as follows: Chapter 2 Concept and definition, classification This chapter explains and clarifies some basic and key concepts in the related research flow. Although, some concepts are also used in business circumstances, they have specific meaning in this particular research domain. Moreover, key concepts are also introduced and explained in this chapter to avoid misunderstanding in later description and discussion. Finally, the classification of research subareas is stated according to current academic research custom and settings in this particular field. Chapter 3 Analysis and critique In this chapter, subareas of research flow on technology management with user perspective are classified and discussed with published academic articles. In each subfield, the origin and route of research are uncluttered though prestigious academic papers. Moreover, detailed important studies and findings are specifically discussed with comparison. In the end, hotspots for future research are stated with critical review of previous studies. Chapter 4 Discussion - 13 - This chapter aims to portray the stream of user centered innovation research as a whole picture. In this way, the inter connections between subfields can be shown. Moreover, links between research on user innovation and other current research topics are also discussed. Finally, new areas for future research are proposed. - 14 - Chapter 2 Focal concept and literature classification 2.1 Introduction This chapter explains and clarifies some basic and key concept in the related research area. Although some concepts are also widely used in business circumstances, they got specific meaning in this particular research domain. Moreover, key concepts are also introduced and explained in this chapter to avoid misunderstanding in later description and discussion. 2.2 Focal concepts 2.2.1 User In the “Sources of Innovation”, von Hippel (1983) defined users as individual consumers or firms that expect to benefit from using a product or a service, while manufacturers often expect to benefit from selling a product or service to their customers. In this definition, users consist of both individuals and firms. Thus, with different locations in the value chain, users could also be divided into two categories: intermediate users and end users. In this case, a firm at the middle node of value chain could be a user as well as manufacturer. 2.2.2 User innovation - 15 - von Hippel first reported that the central role of innovators can also be users in the 1970s. In one of his first studies, he pointed out that approximately 80% of innovations in the scientific instrument industry were invented, and first field-tested by users of the instrument. Thus, he introduced the very idea that users, besides producers, can be a major source of innovation. This conceptual work has started a research stream investigating users as the sources of innovation. As commonly accepted in management research, innovation refers to successfully commercialized invention. However, when scholars reported cases of user innovation, some cases are still in prototype phase, and some innovations are commercialized by manufacturers with the source of idea or know how from users. The original model of user centered innovation (von Hippel, 1989) is shown as follows: Figure 2.1 The Typical Steps in the development and diffusion of user innovation.  (Source: von Hippel, 1989) - 16 - 2.2.3 User centered innovation In his subsequent research, von Hippel (2005) noticed the trend of open innovation and distributed innovation, and then introduced the concept of “User centered innovation”. This generalized concept includes the phenomenon that manufacturers absorb user innovators’ ideas and introduce them into the mass market, and that manufacturers absorb innovative ideas from their loyal users into R&D units to identify new market tendency. In this case, the final innovation is possessed by established manufacturers; however, source of ideas is partially from users. Usually, lead users are more active in the formation of user centered innovation. Here is my summary on characteristics of different user activities in all innovation steps based on previous user innovation theoretical models: Steps of user innovation Invention & prototyping Information diffusion User community Emergence and aggregation of specified needs Lead user User-innovator Higher standard on Experimental, trial and product performance successful invention Spreading the Enjoyment of scope of leading usage prototype usage - 17 - Awareness and intention for potential profit Willingness of Pre-commercial purchase the lead product Meta-knowledge Knowledge about about technology market Seeking for Opportunity of potential success, competition improvement and versus established new invention company The market and Commercialization fans of the innovation Table 2.1 Characteristics of different user activities in all innovation steps     Table 2.1 summarized the different characteristics of users during the process of user innovation. It could also be considered as typical model of user innovation. Some strategic management researches within different entities are reviewed in Section 3.6. - 18 -   2.2.4 Lead user theory and method According to previous studies, the initial developers of influential product and process innovation have often been users. As a matter of fact, some users are more performance sensitive and eager for leading technology than other consumers. This innovative activity is also found to be more concentrated among “lead users” Von Hippel (1986) defined lead user with following distinguishing characteristics: 1) They are at the leading edge of an important market trend, and currently experiencing needs that will later be experienced by many other users in the market. 2) They anticipate relatively high benefits from obtaining a solution to their needs, and so may innovate themselves. Users are willing to innovate if they realize there are potential benefit to themselves from doing so and typically do not consider whether other users have similar needs during the very trial period. Moreover, a lead user can innovate in the same circumstances and probably notice other users’ similar needs in the future. In contrast, manufacturers typically require and expect to confirm that many users have similar needs before they introduce a new product. The possibility of predicting the sources of a subset of user innovations exist: those having the potential to become commercially successful products in the general marketplace. This leading characteristic of lead user have two aspects: lead in user community and lead in time. The outcome is that other ordinary users will benefit from the trend led by lead user after a certain time. - 19 - 2.2.5 Design space Design space refers to the room, features and possibilities for a new set of design. According to the “Lead user” theory, user innovation is done by some users who have recognized a new set of product design possibilities. (Baldwin & von Hippel, 2006). Design space is a reflection of unsatisfied user needs and also undiscovered market opportunities. Usually, after some prototype design or innovation from lead users, the user communities are eager to share and exchange this innovation-related information. Ease and accuracy of the design space is the major competing advantage for userinnovators against established manufacturers. During the time of a user innovator becoming user manufacturer, user innovation is also in the phase of diffusion. If the innovation is promising enough or the design space is broad enough for established firms to enter the market and attempt to profit from economics of scale, a competitive interaction between user manufacturers and established companies may emerge. Once a certain design space is widely identified, firms may typically be vertically integrated into subfields. These complex patterns are interesting to be studied. 2.2.6 Stickiness of information Many users are not truly aware of their needs when it comes to new products, and even if they are, they are often not able to formulate and explicitly translate them. Studies have shown that the stickiness of information can be very high (Ogawa 1998, von Hippel - 20 - 1998). Some scholars tended to conceptualize it as “tacit knowledge”. Especially, when users noticed the unsatisfied demand or some change in their preference, this information often cannot transmit to manufacturers. For manufacturers in the industry, they also have difficulties on manage new market trend which is generated by new changes of user preference. However, many users are not truly aware of their preferences and needs when they use new products. Even if they realize them, most of them are not able to formulate and explicitly translate them. Especially, when users noticed the unsatisfied demand or some changes in their preference, this information can not directly transmit to manufacturers. For manufacturers in the industry, they also have difficulties to manage new market trends which are generated by changes in the preferences among the user community. Some scholars refer this change of preferences to the results of changing in users’ value system. - 21 - 2.3 Overview and system of the research stream The phenomenon of user innovation has attracted the wide spread attention of economic and management scholars. Therefore, this thesis aims to review related studies in this field and classify them into subcategories which are commonly accepted by previous scholars. Status Topic Total Completed In Projects Progress 12 11 23 User Entrepreneurship 0 2 2 Communities 5 7 12 Open Source 8 0 8 User Innovation and Policy 2 9 11 Free Revealing of IP 0 4 4 Open Innovation 4 11 15 Total 31 44 75 Lead User and User Innovation Source: Research projects in the 7th annual user and open innovation workshop, 2008  Table 2.2 Current research subfields of user innovation  Table 2.2 is the updated research structure of this research field. Since this thesis is focused on user centred innovation, I sort literature into 6 subfields: Case study of user innovation and entrepreneurship (developed by end consumers and intermediate users); Lead User Theory testing; Lead User Method; User preference; - 22 - Toolkits for user innovation and custom design and Profit distribution and strategies of different entities The inter connection of subfield will be discussed in Section 4.1. - 23 - Chapter 3 Reflective review within sub-domain In this chapter, subareas of research flow on technology management with user perspective are classified and discussed according to published academic articles. In each subfield, the origin and route of research are sorted out through prestigious academic papers. Moreover, detailed important studies and findings are specifically discussed with comparison. In the end, evaluations and hotspots for future research are stated with critical review of previous study. 3.1 Case study of user innovation and entrepreneurship After compiling the literature in this domain, I find that research scholars tend to choose the research methodology of case study, since this is a novel and initiative domain in technological innovation management research. With the different role of users, Bogers et al. (2009) categorized user innovation into two groups: innovation by intermediate users and innovation by end consumers. Actually, some scholars have already noticed and even emphasized the differences of characteristics of innovation by intermediate users and end consumers, because end user only aim for maximum of utility and intermediate users often aim to balance utility and profit. This variance upon value network may lead to different choice on technology or innovation route. Another difference may exist given that end user usually innovate based on individual hobby while intermediate users often aim to serve others better in the area of their expertise. - 24 - 3.1.1 Innovation developed by end consumers Recent studies have suggested that a significant part of innovation source can be traced back to end consumers. End consumers, also known as end users of consumer goods, are typically individual end-customers in the value chain. These studies, mainly conducted in the field of sports-related consumer goods and other personal leisure activities, include research on equipment in extreme sports (Franke & Shah, 2003), outdoor sports (Lüthje, 2004), mountain biking (Lüthje, Herstatt & von Hippel, 2005), kite surfing (Tietz, Morrison, Lüthje & Herstatt, 2005), rodeo kayaking (Baldwin et al., 2006), sailing (Raasch, Herstatt & Lock, 2008), juvenile products (Shah & Tripsas, 2007), stereo components (Langlois & Robertson, 1992), automobiles (Franz, 2005), and retail banking system (Oliveira & von Hippel, 2009). This research stream manifested the dominant role of users in the invention process and showed how end-users freely develop, share and diffuse innovative ideas within their communities. Being an end consumer of the product market, I have noticed some cases in everyday life, even though some of cases are just in the phase of prototype or invention. Sports and music fans often tend to refit their equipment and even sell refitted equipment to others. Game fans often tend to use toolkits provided by manufacturers to customize or self design gaming character or scenario and share popular designs all over the world. End users often exchange their ideas and expectation in certain community. Some scholars also investigated this exchanging of innovation in user community. Updated studies are summarized in Table 3.1. - 25 -   Paper When Do UserInnovators Start Firms? Towards A Theory of User Entrepreneurship Sonali Shah and Mary Tripsas (2004) Research question Fact: Users benefited from using the innovation they created, while existing manufacturers reaped the financial rewards. What accounts for this discrepancy in empirical findings? What does this imply for existing models of entrepreneurship and industry emergence? Methodology Developed a theoretical model that identifies the factors that influence user-innovators to startup Two variables: the actor’s assessment of the profitability of commercializing the innovation and the actor’s profit threshold historical research (second-hand data, food industry) How user innovations become commercial products: A theoretical investigation and case study, C. Baldwin et al, (2006), Research Policy, 35 How user innovation is organized and evolves over time? How user innovations become products and affect the evolution of product markets? (discussed applying dominant design theory) model the pathways commonly from user innovations into commercial products (micro-eco) test the model against the history of the rodeo kayak industry, the model could be used to test competition between user-startup and incumbents Exploring how peer communities enable lead user innovations to become standard equipment in the industry: Community pull effects Christoph Hienerth and Christopher Lettl, Journal of Product Innovation Fact: It is difficult to understand and analyze the exact source of innovations and the entrepreneurial processes by which they are developed. RQ: How innovations become widely accepted by large segments of the market and specifically which Focus on those individuals who are on the leading edge with respect to an important market trend (lead users) and their respective peer communities. An explorative case study in sporting and surgical equipment industry. Extracting data (invention, commercialization and - 26 - Results Due to preferential access to information and/or differing cognitive interpretations of that information, users may place a different expected value on the commercialization of an innovation than a manufacturer. Due to differing opportunity costs and personal preferences, a user’s profit threshold may differ from a manufacturer’s. Some users recognized  unmet need and  innovate, then join into  communities to  increase efficiency of  collective innovation.  User‐manufacturers  then emerge, as the  market stabilized  (dominant design  emerge), incumbents  enter this new market. The theoretical model is supported by market share and company survival in rodeo kayak industry. Communities play a  central and active role  in the entrepreneurial  process: Community  members provide  valuable feedback on  the overall potential of  the lead users' ideas,  participate by making  concrete development  contributions, act as  testers of the new  products, and finally  help to diffuse the  Management (2009) demand-side forces are at work. diffusion) from multiple respondents and various other sources such as reports, publications, databases, or community web pages. innovations inside and  outside the community.  Two pull effect:  Community members  demand and facilitate  the development of  prototypes.   Community members  help to cross the chasm  between first adopters  and the early majority.     Table 3.1 Summary of published articles on innovation developed by end consumers  3.1.2 Innovation developed by intermediate users Intermediate users are entities that use equipment and components from producers to produce goods and perform services. Intermediate users also include special service providers or experts, such as scientists, librarians, webmasters and surgeons. For example, previous studies reported intermediate users as the sources of innovation in these sectors: chemical industry (Enos, 1962; Hollander, 1965), scientific instruments (von Hippel, 1976), industrial machinery (Foxall & Tierney, 1984), PC applications software (Voss, 1985), semi-conductors (von Hippel, 1988), printed circuit CAD software (Urban & von Hippel, 1988), pipe hangers hardware (Herstatt & von Hippel, 1992), residential construction (Slaughter, 1993), convenience stores (Ogawa, 1998), library information and management systems (Morrison, Roberts & von Hippel, 2000), security software systems (Franke & von Hippel, 2003), and commercial banking systems (Oliveira & von Hippel, 2009). Recent studies are compiled in Table 3.2. (Although some studies investigate cases in intermediate users, they are classified into other subcategory because of the focus of each study.) - 27 - Paper Users’ contributions to radical innovation: Evidence from four cases in the field of medical equipment technology. Lettle, C., Herstatt, C. , Gemuenden, H.G. (2006): R&D Management Research question (1) Are users capable of contributing substantially to the early phases of RI projects? (2) If users are capable, in what form do they contribute? (3) If users are capable, what are the characteristics of these capable users? (4)How can manufacturing firms benefit from capable users? Exploring How Lead Users Develop Radical Innovation Lettle, C et al, (2008) IEEE Transactions on Engineering Management Explore how lead users develop radical innovations outside of manufacturing firms 1) How do lead users recognize opportunities based on truly novel solutions? 2) a) How do these opportunities migrate to the market and become exploited? b) What roles do individual lead users and established manufacturing firms play in this process? 3) What contextual factors have an influence on opportunity exploitation? Methodology 4 case study and analysis on Medical device industry Computer­based  intelligent device for  neurosurgery  Computer­assisted  navigation system for  neurosurgery  Computer­assisted  navigation system for  orthopedics  Biocompatible  implant for hernia  surgery Results and Findings 1. In all cases, users were the originators of RI. 2. They play an entrepreneurial role as they establish and organize the required innovation networks. 3. These innovative users have high motivation to seek new solutions, possess a diverse set of competencies, and are embedded in a supportive environment. 4. Some users are a valuable resource for the identification of technological trends. Networks are needed to transform users’ new concepts into prototypes and marketable products. To select truly radical  Proposition 1: More lead user involvement in an innovations, the  interdisciplinary in an criteria on degree of  early stage, the more innovativeness was  radical the lead user applied (Salomo,  innovation will be. 2003, market,  P2: The more user technology  innovation lies outside of organization and  core competencies of resource‐ft  established firms, a) the dimension),   lower the propensity of Interviewed each  established firms to user manufacturer  cooperate with the lead firm internally  user in early stages; b) the Archival data was  more likely lead users will used to validate the  be entrepreneur informants’  P3: The longer and the statements  Category systems for  more resource-intensive the commercialization lead user activities  process of user innovation, and characteristics,  the higher the lead user’s the adoption  propensity to cooperate behavior of existing  with incumbent to exploit firms, and resulting  the opportunity exploitation modes  were developed.  - 28 - User involvement competence for radical innovation Christopher Lettl, (2009) JET-M (1) Are users able to  play the roles of  inventors and/or  (co)‐developers in  radical innovation  projects at all? (2) If  some users are  indeed capable to fill  out these roles, how  can firms  systematically  identify these highly  creative users? (3)  How do firms need to  interact with these  users to benefit from  their creative  contributions? Each case of UI have 3  steps   Opportunity  recognition.  Initial entrepreneurial  activities.  Opportunity  exploitation.  User communities  and existing firms  also played a  important role in step  2 and 3  Importance of user  involvement  competence, Critical  user characteristics  and activities, user  community network  are identified and  analyzed  1. In all cases, the originators of RI were users with advanced knowledge. 2. Lead users and user innovators have a high motivation toward new solutions, are open to new technologies, intend to take risks and do experiments, possess diverse knowledge and competencies, and are embedded into a very supportive environment. 3. Firms who closely interact with specific users benefit significantly for their radical innovation work. Network  competence and  interaction are  important. A model of Search grid  for ‘technology lead  users’ was developed. Table 3.2 Summary of published articles on innovation developed by intermediate users  - 29 -   3.1.3 New Typical Cases Since intermediate user focused industry is a hot and open research area, this study selects medical device industry as an example area to find typical cases of user innovation: 1. Robot for neurosurgery In micro-surgery, especially neurosurgery, the precise detection, location and operation of a tool are significant for a successful surgery. This medical robot system firstly enabled tactile feedback to neurosurgeons such that bring micro surgery into “submillimeter era”. Prototyping: In 1990s, a German neurosurgeon Volker Urban recognized the limitation of surgical equipment at that time. Since he is a pioneer and lead user in surgical robotics, he utilized cockpit technology in nuclear power plants and robotics into medical domain, which enabled to meet high precision requirements in neurosurgery and many other clinical applications after (e.g., heart surgery and orthopedic surgery). Diffusion and commercialization: In 1995, Urban obtained financial support from Siemens on the prototype with the idea of “medical goes electronic”, when Siemens was not in possession of core competencies or sufficient technological knowledge to develop and produce a medical robot with submillimeter performance. Moreover, Urban joined Fraunhofer, a leading competence - 30 - center financed by Siemens, to develop and spread applied robotics globally. After testing the medical robot clinically and marketing the electronic medical surgery idea actively, Urban started Universal Robot Systems (URS), a spin-off from the Fraunhofer Institute, to commercialize the surgical robot. 2. Computer-assisted navigation system for orthopedics OrthoPilot, the first computer-assisted navigation system for orthopedics, enables the process and visualization of optimal implant positioning in orthopedic surgery without CT or X-ray scanning. Prototyping: In the early 1990s, accurate imaging and positioning is important for all precise surgeries. In orthopedics, if the surgery was not positioned accurately, the implants caused the patients severe pain and even required replacement after just a few years. Another major disadvantage of the conventional procedure, radiation-intensive CT scanning, was that examinations were time-consuming, expensive, and not patient-friendly. Prof. Saragaglia, a lead user with knowledge of orthopedics and microcomputer, identified the technological opportunity and developed a computer-assisted navigation system for orthopedic surgery. Diffusion and commercialization: Saragaglia then collaborated with Frederic Picard, an orthopedic surgeon with a strong background in anatomy, and obtained financial support for the project “Image Guided - 31 - Orthopedic Surgery” (IGOS) from the European Union (EU). A medical equipment manufacturer Aesculap was interested in computer-based technological advances in surgery and invested IGOS in return of promised commercialization rights. After a number of improvements on stability and user friendliness, the navigation system was introduced to the market in 1999. Saragaglia and Picard licensed the know-how to Aesculap after all. This computer-assisted navigation system later becomes a worldwide medical standard in orthopedic surgery. 3. Picture archiving and communication system (PACS) PACS is a system integration of medical images originally designed for facilitating storage and interpreting images more efficiently. Most PACSs handle images from various medical imaging instruments, including ultrasound (US), magnetic resonance (MR), positron emission tomography (PET), computed tomography (CT), endoscopy (ENDO), mammograms (MG), Direct radiography (DR), computed radiography (CR) ophthalmology, etc. (Detailed data on medical imaging are documented in appendix) - 32 - Prototyping: The PACS concept originated at the International Society for Optical Engineering (SPIE) Medical Imaging Conference in Newport Beach, CA, in February 1982. Various people are credited with the coinage of the term PACS. Cardiovascular radiologist Dr Andre Duerinckx reported in 1983 that he had first used the term in 1981. Dr Harold Glass, a medical physicist working in London in the early 1990s secured UK Government funding and managed the project over many years which transformed Hammersmith Hospital in London as the first filmless hospital in the United Kingdom. The first large-scale PACS installation was in 1982 at the University of Kansas, Kansas City. However, this first installation became more of a teaching experience of what not to do rather than what to do in a PACS installation. Diffusion and commercialization: As efforts were made to build PACS in academic settings, manufacturers were beginning to work on commercial PACS, and the user community of PACS was developing the DICOM standard. (Digital Imaging and Communications in Medicine). Since PACS can save costs and improve productivity, Digital copy and storage became dominant then in health care industry. Nowadays, technologies like 64-slice CT that generates thousands of images would never have worked on film. At workstations, these images can be sorted, leveled, put into 3-D, and then diagnosed by physicians. 4. Other US companies founded by user innovators - 33 - Table 3.3 documents some startups founded by user innovator in the US, which could be new potential materials for case study. Company Business Scope Brock Rogers Surgical Laparoscopic instruments that combine a robotic tele- (Norwell) Integrated Surgical Systems (Sacramento) manipulator Computer workstation for pre-operative planning, 3D surgical planning software Intuitive Surgical Devices MIS system for precise instinctive surgery (Mountain View) Vista Medical Technologies (La Jolla) Real-time, 3D, visualization system Table 3.3 Examples of user innovator founded firms  - 34 - high resolution endosurgery 3.2 Lead User Theory testing The initial developers of influential products and processes innovation have often been found to be users. This innovative activity is also found to be concentrated among “lead users” (von Hippel, 1986). Lead users are defined as members of a user population having two characteristics: First, they highly benefit from obtaining a solution to their needs - and then they are willing to innovate. (“Ahead of the market”) Second, they are at the leading edge of important trends in the market - and so are currently experiencing needs that will later be experienced by many users in that marketplace. (“High level of expected benefit”) As the concept introduced in previous section, Lead User Theory is an important area for management research. A range of empirical studies have confirmed the correlations between being an innovative user and lead user attributes in these special groups, consistent with the proof that lead users are motivated and thus are more likely to innovate. In their study of library software users Morrison et al. (2000) found that innovating users had high scores on lead user characteristics relative to other users in the same community, with the impact of characteristics being moderated by the capability of users to harness their resources and those of the external environment. Also Franke and Shah (2003) found that innovators exhibit these characteristics more significant than noninnovators. Similar results are derived by Franke and von Hippel (2003) finding that a high intensity of lead user characteristics displayed by a user has a positive impact on the likelihood that the respective user will innovate. - 35 - Paper Lead Users: A source of novel product concepts, Von Hippel, Eric (1986) Management Science The nature of lead users and measurement of leading edge status Morris et al (2004), Research policy Finding commercially attractive user innovations: A test of lead user theory Nikolaus Franke, Eric von Hippel, Journal of Product Research question /Hypothesis Market research analyses are typically not reliable in the instance of novel products or in product categories characterized by rapid change (How to analysis market reliably?) The author explored the problem and propose a solution: Lead User Method The actual nature of the lead user characteristics is binary or continuous? Proposed and evaluated a continuous analog to the lead user construct, which called leading edge status (LES). (“ahead of the market”, “level of expected benefit” and “level of innovation”) Analyzed the relationship between (a) the commercial attractiveness, (b) likelihood of innovation and the intensity of the lead user characteristics (2 index, high expected Methodology Findings Reviewed prior methods Market research without identifying the importance of lead users: Group of creative users want to benefit more from existing products Proposed Lead User Theory LU are “ahead of the market”, and have “high level of expected benefit” Greater benefit a user could obtain from a needed novel product, greater his effort to obtain a solution will be. (tested by Schmookler 1966) The population consisted of 13,000 libraries in Australia employing almost 20,000 people. 10,000 of them part-time. The response rate of 62%. (survey items: Benefits recognized early, High level of benefits expected, Perceived LES, Applications generation, 5 scale self score ) questionnaire (online + email) to users in kite surfing (extreme sport) Item (all self score, 456 responses, 5.6%): high expected benefits (by 5 scale to 7 questions), technical expertise (5 scale to 7 questions), community- lead users are familiar with market conditions, they can forecast and provide new product concept and design data Posited 4 steps of LU method: (1) Identify an important market or technical trend; (2) Identify lead users who lead that trend in terms of (a) experience and (b) intensity of need; (3) Analyze lead user need data; (4) Project lead user data onto the general market of interest. - 36 - Find a strong relationship between the three index and explain how users with high LES can offer a contribution to both predicting and accelerating early product adoption Both 2 components of lead user attributes independently contribute to identifying commercially attractive user innovations: high expected benefits predicts innovation likelihood, ahead of the market predicts both the Innovation Management (2006) benefits and ahead of the market) embodied in those users The roles of product leadusers and product experts in new product evaluation, Focuses on the theoretical and empirical distinctions between product leadusers and product experts and tests their joint and relative impacts on the accuracy of new product evaluations. H1: Product expertise will be positively related to the accuracy of new product evaluations. H2: Product leadusership will be positively related to the accuracy of new product evaluations. H3: The impact of product lead-usership on the accuracy of new product evaluations will be larger than that of product expertise. Muammer Ozer (2009), Research policy based resources, ahead of trend (leading “freestyle” needs, scale bar) New product evaluations and subsequent actual outcomes are observed. Uses a prediction sample to generate new product evaluations and a validation sample to compare the original evaluations with actual results, and to assess the predictive accuracy of product experts and product lead-users. a longitudinal empirical survey study 141 prediction user and 149 validation user self response to purchase of camera phone: Predictive accuracy. [(1−(Pi −A)2)] Product expertise. 3 items, 7-point scales Product lead-usership. 8 items, 4-point scales commercial attractiveness and innovation likelihood All hypotheses are confirmed. There are theoretical and empirical distinctions between product leadusers and product experts with respect to the accuracy of new product evaluations. The results of a longitudinal empirical study showed that both product expertise and product lead-usership are positively related to the accuracy of new product evaluations. They also indicated that the impact of product lead-usership is larger than that of product expertise. Table 3.4 Summary of published articles on testing of lead user theory  Through literature in this subject, scholars have already demonstrated that lead users in end consumer industry showed high user characteristics. These results may also apply to the context of user firm communities. From the stream of researches, I found lead user theory testing is an important and interesting area. Specifically, scholars have some disputes on Lead User Theory subject: First of all, Morrison et al. (2004) used 3 dimensions to describe Lead User characteristics, including “ahead of the market”, “level of expected benefit” and “level of - 37 - innovation”. Franke et al (2006) used 2 dimensions to characterize lead users and tested these attributes independently. Ozer (2009) did a survey on lead user characteristics and their effect on trend prediction, but he did not test the interrelation of 3 lead user characteristics. Therefore, a cross industry comparing study on both end consumer users and intermediate professional users is promising. The other limitation of previous study is that they only use self assessment to access lead user edge and characteristics. Thus, a survey study adding peer assessment to control bias could generate more persuasive results. To be more specific, reliability is not sufficiently examined in all these testing studies. - 38 - 3.3 Lead user method According to the Lead User Theory which is introduced in previous sections, lead users often hold the potential to provide valuable input for firms’ idea generation and innovation processes. Manufacturers may refer to this theory to absorb tacit knowledge from users of their products or service. This method aims to tap this potential, which is entitled the “lead user method” (von Hippel, 1986). A recent study at 3M highlights the value of this approach: new product concepts developed together with lead users showed a sales potential which was an average of eight times higher than traditionally developed concepts (Lilien et al., 2002). Previous studies have suggested that the stickiness of information can be very high (Ogawa 1998, von Hippel 1998). Some scholars tended to conceptualize this information as “tacit knowledge”. Many users are not truly aware of their preference and value system when they use new products at the beginning, and even if they are, they are often not able to formulate and translate them explicitly. Especially, when users noticed the unsatisfied demand or some change in their preference, this information can not transmit to manufacturers. For manufacturers in the industry, they also have difficulties on manage new market trend which is generated by new change of user preference. Scholars pointed out that “lead use method” could be a helpful solution. - 39 - Paper Lead Users: A source of novel product concepts, Von Hippel, Eric (1986) Management Science Lead User analyses for the development of new industrial products, Urban, Glen and Von Hippel, Eric, (1988) Research question /Hypothesis Market research analyses are typically not reliable in the instance of novel products or in product categories characterized by rapid change (How to analysis market reliably?) The author explored the problem and propose a solution: Lead User Method H: Lead users can serve as a needforecasting laboratory for marketing research, they can provide valuable new product concept and design data to inquiring manufacturers in addition to need data Management Science Implementing the lead user method in a high technology firm, Erik L. Olsona, Geir Bakkeb, (2001), The Journal of Product If the LU method is so good at uncovering innovative product ideas, why don’t more companies use it as part of their new product development process? Methodology Findings Reviewed prior methods Market research without identifying the importance of lead users: Group of creative users want to benefit more from existing products Proposed Lead User Theory LU are “ahead of the market”, and have “high level of expected benefit” Greater benefit a user could obtain from a needed novel product, greater his effort to obtain a solution will be. (tested by Schmookler 1966) questionnaire to identified lead users in printed circuit boards designing (PC-CAD) Steps of LU project: Specify Lead User Indicators Identify Lead User Group Generate Concept with Lead Users Test Lead User Concept (Product) lead users are familiar with market conditions, they can forecast and provide new product concept and design data Posited 4 steps of LU method: (1) Identify an important market or technical trend; (2) Identify lead users who lead that trend in terms of (a) experience and (b) intensity of need; (3) Analyze lead user need data; (4) Project lead user data onto the general market of interest. a longitudinal case study approach in Cinet (PC industry): determining the trends identifying lead users developing the new product concepts evaluation of the LU method inside Cinet - 40 - Lead users with the hypothesized characteristics were clearly identified; a novel product concept was created based on lead user insights and problemsolving activities. New product concepts generated on the basis of lead user data were found to be strongly preferred by user community. LU method is abandoned by Cinet because of high cost and ambiguous results, 1) It is necessary to pressure or reward personnel in order to make permanent changes to established routines, 2) Researchers should be careful at taking managers Innovation Management Performance assessment of the lead user idea-generation process for new product development, G.L. Lilien, P.D. Morrison, K. Searls, M. Sonnack, and E. von Hippel, (2004) Manage. Sci. The Lead User method: an outline of empirical findings and issues for future research, Christian Luthje and Cornelius Herstatt, (2004), R&D Management How does the LU process actually perform relative to more traditionally used methods? (In more extreme condition, beyond intended target markets) Hypotheses: LU generate greater commercial potential than will non-LU method, increase overall innovating rate, less protectable IP, cost more money Collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. (inside 3M) Steps: Goal Generation and Team Formation, Trend Research, LU Pyramid Networking, LU Workshop and Idea Improvement. Compared LU method with Funded Ideas (5 vs. 42 projects) How are theories and empirical findings of user innovation and marketing management? Lead User method is in the focus of the present paper, with respect to its theoretical-empirical foundation and its implementation into the innovation and R&D management systems. Reviewing previous papers Empirical research on user innovations is reviewed to clarify the theoretical foundation of the Lead User method. The attention is also drawn to the Lead User practice by discussing the various process steps of this specific approach on the basis of two applications of the method. Table 3.5 Summary of published articles on lead user method study  - 41 - at their word when asking them about their future intentions. The LU idea-generation method does appear to generate better results than traditional methods. LU project ideas are projecting their highest rate of major product line generation in the past 50 years. "Breakthrough" ideas generated via the LU process offered as good a fit to existing divisional goals and competencies as did ideas generated by traditional methods. LU ideas project has high intellectual property protection as did the ideas generated by non-LU methods. Proposed some new Research Questions: How to estimate costs and benefits of innovation among users? Can firms change users’ opinion? Who are needed in the undisturbed executing team to successful transfer in-house know how? How to assess richness and relevance of data source for detection of trends? How to identify Lead User internally (via customer complaint system) and externally? How to identify unsatisfied users and unmet needs? How can managers assess and influence the willingness of innovation users to freely reveal their invention and to cooperate with the manufacturer? However, knowledge on how to efficiently identify and integrate lead users into new product development is still limited. Disagreement on effectiveness of Lead User Method (Erik L et al 2001 vs. von Hippel et al 1988 2004) is noticeable in previous studies. Scholars have different perspectives on cost, efficiency, accuracy of trend prediction and some other aspects of lead user method. To verify and extend knowledge on this domain, new case study and quantitative research are needed. - 42 - 3.4 User preference To date, only a few studies have quantified the correlation between heterogeneity of user preferences and technological innovation process. For example, in an empirical study on Apache's security software, Franke and von Hippel (2003) showed that users did have unique needs, but also pointed out some unsatisfied demand with standard products. Some users even claimed that they were willing to pay a considerable fee for improvements which satisfy their individual needs. In a meta-dimensional analysis of published cluster, Franke and Reisinger (2003) found evidence that this dissatisfaction does exist. Current practice in the market generally leads to high levels of total variance left over as in-segment variation (approximately 50% on average). This means that a major group of customers remains dissatisfied with standard offerings on the market in some degree. Another indicator for the heterogeneity of user needs is the fact that many users take the time to modify or innovate existing products. Franke and von Hippel (2003) presented an overview of several studies and showed that in the fields sampled to date, 10% to nearly 40% of users report having modified or developed a product for in-house use (in the case of industrial products) or for personal use (in the case of consumer products). In this case, the correlation of heterogeneous demand in user community and potential market trend or change in user value system is indicated. - 43 - Paper Customer Preference Discontinuities: A Trigger for Radical Technological Change, Mary Tripsas (2008), MANAGERIAL AND DECISION ECONOMICS How Demand specificity shapes transaction costs explaining the dynamics of the liberalizing British electricity sector 1990-2005, Research question What factors cause a mature industry to re-enter a period of technological turbulence? (the importance of demand-side factors) H: Preference discontinuities can also be the catalyst for technological transitions. How firms transaction costs are influenced by the nature of their industry’s final demand environment Alexander Frenzel Baudisch, DRUID 2007 Thinking about technology: Applying a cognitive lens to technical change Sarah Kaplana and Mary Tripsas, 2008, Research Policy Cognitive explanations should be central to understanding technology evolution, authors extend insight on understanding technology trajectories across the life cycle Methodology Introduce the concept of preference trajectories: periods of incremental preference evolution punctuated by discontinuous changes in preferences. (Relevant attributes, Minimum performance requirement, Maximum valued performance, Relative preference for attributes) Tested qualitatively by typesetter industry 1886-1990 (3 transitions, Hot metal, Analog, Digital, Laser ) An inductive case study of the evolution of UK electricity industry in 1990-2005 shows how the specificity of demand translates into specificity of generation and distribution assets. Focus on UK electricity consumption (base load, peak load), wholesale and retail electricity prices, Changing ownership of coal plants, Market Share in Retail Electricity Developed a coevolutionary model of technological frames and technology: Era of ferment, Dominant design, incremental change and technological discontinuity Described interaction between technology trajectory, collective - 44 - Results Preference discontinuities turn out to play an important role in triggering technological transitions in an industry. A radical change in user preferences can alter the relative attractiveness of different technologies and thus trigger the introduction of new technology in an industry. The low price elasticity and the time specificity of electricity demand influence how firms structure their portfolio of generation assets and their vertical scope across generation and distribution. The design of market institutions moderates the persistent influence of the demand specificity on transaction costs and firm behaviors. Deepen understanding of sources of variation in the era of ferment, conditions under which a dominant design may be achieved, the underlying architecture of the era of incremental change and the dynamics associated with discontinuities. Interactions of producers, users and technological frame and multiple players (manufacturers and users) technological frames and interpretive processes institutions shape the development of collective frames around the meaning of new technologies. Table 3.6 Summary of published articles on user preference research  One opportunity for future research is testing Tripsas’ user preference theory with empirical case study. Since this theory hasn’t been quantitatively tested in other papers, further research could pay attention to the following areas: What is the choice of manufacturers on tradeoffs between multiple dimensions of performance? What is the preference of users on that? Could it explain technological change and firm survival? Is there any data that shows how users have different relevant attributes, minimum performance requirements, or maximum valued performance, (Tripsas, 2006)? Is there any difference between ordinary users and lead users on that? Which is more close to the market trend and facts of firm competition? - 45 - 3.5 Toolkits for user innovation and custom design Product modification and development has been found to be a common user behavior in many fields. For instance, it is reported that from 10% to nearly 40% of users have modified or developed a product for in-house use (in the case of industrial products) or for personal use (in the case of consumer products). As a practical matter, therefore, it is important to find ways to selectively identify the user innovations that manufacturers will find to be the basis for commercially attractive in the collectivity of user-developed innovations. The implications of these findings for theory and also for practical applications of the lead user construct are interesting to investigate. Beside lead user method programs, some established firms tend to absorb tacit knowledge from their users by providing them with specially designed toolkits (von Hippel 2001). Scholars noticed a trend that established firms provide special toolkits to their users. Actually, there are variations in the types of available toolkits. Some very toolkits offer a large design and solution space and cannot be employed without a precise technical understanding (e.g. toolkits for designing application-specific integrated circuits, as described by von Hippel and Katz 2002). They depend on the customer taking on a very active role as designer and they allow substantial innovations. Most of them are employed in business to business settings where the economic benefits of toolkits are apparent in many situations. The other kind of toolkits, particularly in consumer markets, only offer a small solution space and only allow users to combine existed options (e.g., toolkits for designing eyeglasses, as described by von Hippel 2001). Although the - 46 - underlying principle is the similar, the latter toolkits focus on individuality and customization more than on innovation. Scholars therefore suggest using the enhanced term "toolkits for user innovation and custom design" as it describes this new trend. Paper The Impact of Users on Technological Development: The Role of Physician Innovation in the Medical Device Industry, Chatterji, Aaron K. working paper Transfers of user process innovations to process equipment producers: A study of Dutch high-tech firms Jeroen P.J. de Jonga, Eric von Hippel (2009), Research policy User Toolkits for Innovation Eric von Hippel (2001) Journal of Product Innovation Management Research question How user inventions compare to manufacturer inventions, and how users influence the innovation process more broadly. Little is known about the crucial process by which userdeveloped innovations are transferred to producers, and about the terms under which such transfers are effected. How can benefits of shifting free need-related design activities to users be achieved via “user toolkits for innovation”? What element Methodology Results and findings comparing the patented inventions of doctor inventors with other medical device inventions (1990-96), 20% inventors are doctors (matched by America Medical Association database) Adjusted forward citations, backward citations, class citations A detailed survey of 498 high technology small and medium-sized enterprises in the Netherlands 13% of the cases in the sample are new user developments, and 25% of the user innovations in the sample were transferred to commercializing producer firms 54% of these firms newly develop or modify the process equipment or software they use inhouse at significant private expense. User inventors will generate inventions that are of greater importance than manufacturers, contribute to a broader set of follow-on technologies and that better anticipate technological trajectories. Analyzed the effect of user toolkits on shifting need-related development. (1. transfer of “sticky” user information, 2. user can learn by doing) Discussed the development of custom integrated circuits, custom foods and module - 47 - Many transfers were made without any direct compensation. From the perspective of effective diffusion of user innovations, innovations with higher commercial potential, and more general appeal for users, are much more likely to be transferred to producers. Most of our userinnovators were not enthusiastic about “freely revealing” their innovations to others. Open source economics may be a general pattern in the economy. Firms should give users real freedom to innovate, allowing them to develop their custom product via iterative trial-and-error. In this way, users can create a preliminary design, simulate or prototype it, evaluate its functioning in their own use Learning from leading-edge customers at The Sims: Opening up the innovation process using toolkits Reinhard Prügl and Martin Schreier R&D Management, 2006 should such a toolkit contain libraries, which offer “User-Friendly” Toolkits, Appropriate “Solution Space” and Translating User Designs for Production. how users deal with "the invitation to innovate"; how attractive individual user designs might be to other users; how toolkits and users might add to the process of innovation Studied the case of Sims: toolkits could serve as a promising market research tool for guiding a firm's new product development efforts environment, and then iteratively improve it until satisfied. User toolkits for innovation can be much more effective than traditional, manufacturerbased development methods Users are not "one-time shoppers" – in fact, their innovative engagement is rather long-lasting, continuous, evolving, and intense. Leading-edge users do not merely content themselves with the official toolkits provided by the manufacturer. Table 3.7 Summary of published articles on toolkits for user innovation and custom design  As discussed in Section 3.4, flexible manufacturing systems have started to enable companies to respond to each customer's individual preferences for an individual product. Toolkits for user innovation and custom design often aim to build the interface between manufacturers and customers and facilitate the active transfer of tacit knowledge. A possible idea is to shift the task of designing new products to users by equipping them with some toolkits, which enable the users to convert their ideas into custom products or solutions. These toolkits allow trial-and-error experimentation and deliver immediate feedback on the potential outcome of design ideas. Once a satisfactory solution is found, the design can be transferred into a firm's production system and then the self-designed product can be delivered to the customer. - 48 - In this case, a toolkit can be an important method to transfer tacit information. It is often found that novel products are developed through "learning by doing" processes (von Hippel and Tyre 1995, Thomke, von Hippel and Franke 1998) or by "trial and error" procedure (Ishii and Takaya 1992, Polley and Van de Ven 1996). Toolkits can provide a setting and platform for "trial-and-error" learning. In order to innovate, the users need to be informed about all of the possibilities at first; then they can try out various possibilities, learn from errors, compare different solutions, and thus engage in a step-by-step learning by doing process. However, an effective toolkit should also open enough space for users to try new solutions. Due to the novelty of this phenomenon, research into the shifting of innovation and design tasks from manufacturers to customers is still in its early stages. However, studies in this field are growing fast, as many start-ups as well as MNCs like Dell, Nestlé, and Nike have started to empower their customers with toolkits. - 49 - 3.6 Profit distribution and strategies of different entities 3.6.1 Quantitative analysis with Equilibrium theory: profit distribution Figure 3.1 Equilibrium between user‐manufacturer and established firms   Source: C. Baldwin et al (2006)  As shown in Figure 3.1, Baldwin et al (2006) theorized a market shared between a usermanufacturer and established manufacturer based on following assumptions: 1. Ideal competitive market is only dominated by these two suppliers. 2. Established manufacturers enter the market with less-competitive product after user manufacturer’s successful product. - 50 - In detail, three steps are identified in the commercialization of user innovations, which is a typical supporting study of process and pattern of user innovation: Step 1: From ordinary user to user innovator: Some users improve a product in order to obtain more benefits from its use and develop that innovation further by sharing the information with other users (in a user community). In this step, the whole user community benefits from the user innovation and the best innovations may be developed by users in the community. Step 2: From user innovator to user-manufacturer: Some users might not be willing or able to spend the time and effort to reproduce an innovation themselves, but they might be willing to purchase the innovation from one of the original innovators who have become user-manufacturers and who earn a profit by selling the product or service to other users. Step 3: From user-manufacturer to dominate firms: When some user innovator founded firms perceive a user innovation to be attractive enough for commercialization, they will have advantages over other players since mass production methods and economies of scale can reduce variable costs. As a result, if consumers are only concerned about consumer surplus (willingness-to-pay minus set price) while manufacturers are concerned about profits, a shared market equilibrium exists. Basically, user-manufacturers focus on a niche of demanding users, while large manufacturers focus on the mass market. If we assume that consumers are only concerned with consumer surplus (the difference between consumer’s willingness to pay and the deal price of product), this equilibrium occurs when the consumer surplus of - 51 - user manufactured product equals the consumer surplus of products from established firms. 3.6.2 Game theory analysis of options Figure 3.2 Game theory analysis of options among multiple entities  Source: Harhoff et al (2003)  As shown in Figure 3.2, Harhoff et al (2003) conducted a quantitative research on multilateral analysis of option with game theory. The study analyzed and explained equilibrium between user manufacturer and established manufacturer based on their choice over the whole innovation diffusion phase. It suggested established manufacturer have a follower’s advantage when they choose to incorporate user innovation. Discussion of this alternative advantage is stated in Section 4.3. These researches shed some light to the new strategy management on entrepreneurship and firm boundary. - 52 - Chapter 4 Discussion This chapter aims to portray the stream of user innovation research as a whole picture. In this way, the inter connections between subfields can be shown. Moreover, connections between research on user innovation and other current research topics are also discussed. Finally, new areas for future research are proposed. 4.1 The inner connection of user innovation research flow User Experience via usage Heterogeneous demand New value system User innovation New Design Space Tacit knowledge User innovator User manufacturer New Product Development by incumbents Toolkits delivered to users User-manufacturer boundary Selection of lead users Innovation by new entrants User centered innovation Lead User Method (Application of LU Theory) Manufacturer Figure 4.1 Inner connection of user centered innovation research flow - 53 - Figure 4.1 shows the whole picture of research stream from user innovation perspective, which suggests the inner connection of research subfields. The literature of case studies on user innovation and entrepreneurship indicate that lead users often obtain tacit knowledge in a new design space, which shapes their understanding of new needs, because they often have special needs or preferences. If some of these lead users successfully introduce a prototype innovation into the user community, a user innovation will emerge. On the other side, established firms also intend to absorb this tacit knowledge despite the fact that stickiness of information and the firm boundaries exist. Since the lead user method is a practical application of lead user theory, established manufacturers often incorporate with lead users and provide them with design toolkits in order to benefit from lead user’s new product development process. In this way, user participated design gradually become a trend and finally be regarded as user centered innovation. - 54 - 4.2 Linking research on user perspective with other important issues: 4.2.1 Open innovation “Open Innovation” refers to a trend that originally means “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively” according to Chesbrough (2006). It is considered as a key attribute of 3rd generation of R&D. Established companies, especially Multinational Corporations (MNCs), found that the breakthrough of information communication and economic globalization changed the previous closed R&D system, so that they had to face the fact of technology diffusion and knowledge distribution. As a result, they not only chose to utilize some R&D idea and outcomes from a third party, but also let their own know how and intellectual properties licensed to other parties for another way to make profit. The major change is differences in the view of innovation flow and interaction, from “how to avoid openness” to “how to take advantage from openness”. Open innovation is similar to user innovation in some degree. The concept of open innovation has two aspects, let R&D activities open for inflow ideas inside to make profit internally and outsource or license internal R&D outcome to other entities to profit externally. If this inflow idea is from users, this innovation is also a user innovation. On the other hand, one possible option of technological know-how interflow is open toolkits to user community and let users innovate. - 55 - The knowledge flow and innovation type are shown in Figure 4.2: Figure 4.2 Knowledge flow and connection of open innovation and user innovation  Source: User and Open Innovation Workshop (2009)  Recently, two trends of openness have in merged enabling “Open Innovation”, which are proposed by user innovation research: 1.) Increased interest in learning from users, especially lead users 2.) Advances in development and usage of social media, which means the extend openness to user community - 56 - 4.2.2 Complementary assets and related theory Teece (1986) proposed the concept of “appropriability regimes” and the theoretical model of “Profit from technological innovation”, and explained: • Why do innovators fail while fast followers win • Whether to integrate or to collaborate for established firms • How to protect innovation from imitation • Implications for trade and economic policy This “Profit from technological innovation” theory has important influence on management research and practical industry. User toolkits trend is a good current explanation of this theory. A better understanding of how manufacturers can profit from users innovations might also explain the role of complementary assets in external technological changes. Given that the trend of open innovation speeds up technological information flow in the industry, while user innovation demonstrate both manufacturers and users can benefit from this information flow, some new research questions are interesting to drown. For instance, how “open” should the information flow be, what is the best equilibrium between manufacturers and users? Furthermore, how innovation by users correlate to complementary assets of users or manufacturers, and what is the difference process between user innovators founded new entrants and incumbent manufacturers? - 57 - 4.2.3 Intellectual Property related issue Intellectual Property Right is a major protection of companies’ interest and advantage on technological know how. However, some scholars advocates rigid enforcement of intellectual property rights, without proper consideration of legal and traditional rights to “fair use,” can hinder knowledge diffusion, impede follow-on innovations, and adversely affect social welfare. In fact, not all of user innovators have the awareness to protect their own intellectual property rights. Their innovative ideas often inter-flow in the user community. However, those firms which pay more attention to lead users may obtain the know how easier than others. Therefore, the government should carefully study how to develop an IPR policy that leads the world in its understanding of how to balance the needs of all parties an increasingly fast-moving and collaborative innovation environment. Based on studies described earlier, some issues are interesting to research further: • If weak IPR system often causes complementary assets (co-specialized assets) more important for success, is it an advantage for incumbents/complementary assets holder? • Moreover, if strong IPR system can cause complementary assets less important, is it beneficial for established firms to be more active in contractual licensing and outsourcing? - 58 - 4.3 Implications and new areas for future research: 1. Alternative respective of Followers’ advantage Many cases suggest that so-called “fast-follower” can recognize a promising product for an unmet needs and win over the first users by learning, absorbing tacit knowledge and promoting the unmet need. Usually, these followers are user innovators, and more importantly some of these following players are lead users in their own market. This type of secondary user innovation or following strategy has more chance in industries with weak regimes of appropriability. Learning by doing could be the focal strategy for these followers. 2. Heterogeneous value system and demand of user Evolution of user value system is not only a reflection of changing of user preference, but also an index for new entrepreneur opportunities and design space. One example of this evolution is the case of Wii, Nitendo managed to identify the demand of users’ value on family and sports style and success in gaming industry. As a result, Nitendo explored and dominated the market of interactive motion gaming. Thus, how to identify new demand and value system of user is important for firms in their strategic management system. 3. User entrepreneurship and regimes of appropriability Previous studies found that the more investment needed (a), the more uncertainty of newly discovered design space on the market (b) and more existed - 59 - competition (c) would lead to less number of user manufacturers but more IP licensing and assigning. If user innovation is significantly important for the industry, the boundary of companies will change with the trend of interactive open source toolkits delivered to lead users. Hence, a hybrid R&D system with “co-creation” from users should be established. 4. Patterns of innovation Many cases of user innovation could be found in both academic and industrial journals. The investigation of innovators’ background and the history of start ups are needed to recognize the pattern of user innovation. Functional role of users could be differentiated into direct users and indirect users. (As shown in Figure 4.3) The intermediate lead users are mainly with professional expertise in relevant area, while end users often innovate in order to benefit more via direct use of their trial prototype. In this way, the type of user may affect the pattern of innovation and the number of user-found new entrants in different industries. Furthermore, user innovation is focused on the source of innovation. However, scholars tend to categorize innovation according to the internal pattern. For instance, when study of user innovation is investigated, more attention should be drawn on the type of innovation and its implication, for instance, incremental innovation or radical innovation. - 60 - User Innovator Direct User Lead U ser Indirect User Figure 4.3 Multiple roles of users in intermediate user dominated industries Overall, this thesis provides a comprehensive literature review and points out potential research question for further study. 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When medical device applied to the body of patient, the effect of the medical device is primarily physical, while pharmaceutical drugs mainly affect the body in a biochemical way. In some case, a precise and complex medical device is also known as a medical instrument. Scope and Definition Definition in USA by the Food and Drug Administration A medical device is an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory which is: • Recognized in the official National Formulary, or the United States Pharmacopoeia, or any supplement to them, • Intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or - 73 - • Intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes. European Definition Any instrument, apparatus, appliance, software, material or other article, whether used alone or in combination, including the software intended by its manufacturer to be used specifically for diagnostic and/or therapeutic purposes and necessary for its proper application, intended by the manufacturer to be used for human beings for the purpose of: • Diagnosis, prevention, monitoring, treatment or alleviation of disease, • Diagnosis, monitoring, treatment, alleviation of or compensation for an injury or handicap, • Investigation, replacement or modification of the anatomy or of a physiological process, • Control of conception, and which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its function by such means. Classification According to distinct function, medical devices could be classified into following categories: - 74 - Diagnostic equipment: before surgery or treatment Medical imaging machines: X-ray, ultrasound and MRI machines, PET and CT scanners Non-imaging equipment: Dose Calibrators, Liquid scintillation counter, Mass Spectrometer Therapeutic equipment: during surgery or treatment Medical lasers, LASIK surgical machines, radiation/chemical therapeutic machine Medical monitors and Life support: Monitors for ECG, EEG, EMG, blood pressure, and dissolved gases/glucose in the blood Medical ventilators, heart-lung machines, ECMO, and dialysis machines (artificial kidney) Medical devices have remarkably extended the ability of physicians and surgeons to diagnose and treat diseases, making implacable contributions to health care industry. Until computer-assisted tomography and magnetic resonance imaging have been invented, the mainstream practice of current medicine gradually came into being. Major inventions and innovations Major inventions in the history of medical device industry 1540, artificial limb, by Ambroise Pare 1630, obstetric forceps, by Peter Chamberlen 1714, mercury thermometer, by Gabriel Fahrenheit 1775, bifocal lenses, by Benjamin Franklin 1792, ambulance, by Dominique Jean Larrey - 75 - 1796, vaccination, by Edward Jenner 1816, stethoscope, by René Laennec 1817, dental plate, by Anthony Plantson 1853, hypodermic syringe, by Alexander Wood 1887, contact lens, by Adolf Fick 1895, X-ray, by Wilhelm Röntgen 1903, electrocardiograph, by Willem Einthoven 1956, endoscope, by Basil Hirschowitz 1957, artificial pacemaker, by C. Walton Lillehei and Earl Bakken 1958, ultrasound scan, by Ian Donald 1973, CT (CAT) scan, by Godfrey Hounsfield and Allan Cormack 1977, MRI, by Paul Lauterbur 1982, artificial heart, by Robert Jarvik The list indicates a phenomenon that many inventors of major invention are advanced practitioner in medical care industry with meta-knowledge of a specific non-medical related technology at that time. These inventions overturned the health care industry of the period and become the foundation of current health care industry. Modern industry and technology develops at a fast speed nowadays. With the emergence of digital electronic technology and diffusion of information explosion via internet, not only has lifestyle of human beings changed remarkably, but also the technology in health care industry developed notably, which serves for the most basic and significant demand of human, being alive and healthy. Technology is actually the activator of innovation and business. When inter industrial leaning between electrical computing engineering and health care industry developed, dominate and mainstream product in medical device industry emerged and evolved. - 76 - Medical device industry is a typical industry to research on, especially study user innovation in diagnostic and therapeutic device industry separately. A major distinct of medical device industry is the multiple-user situation. For diagnostic device and therapeutic device in hospitals, direct users are physicians and surgeons, whereas patients are indirect users. For home-healthcare therapeutic device, direct users are patients and their families, while indirect users are physicians and surgeons, who often recommend and evaluate home-healthcare devices. In resident medical device industry (diagnostic and therapeutic medical device), the purchasers are usually organizations. As physicians and surgeons are direct user, they have high possibility to find unmet demand and design space. However, even ordinary product in the industry is very complex and difficult to produce, so lead users seldom become user manufacturer. They often apply their innovative knowledge into patents and license to established multi-national companies. In home-healthcare device industry, the direct user is usually the purchaser. The pattern of user innovation is similar with other consumer-oriented industries. The only distinct attribute is that innovation often from indirect users. In this case, indirect users are lead users. Industry Trend General market data of current medical device industry - 77 - The global medical device industry generated total revenues of $137.3 billion in 2007. (Healthcare supplies sales generated total revenues of $93.1 billion) The performance of the industry is forecast to decelerate, with an anticipated Compound Annual Growth Rate (CAGR) of 4.4% for the five-year period 2007-2012. Global medical device market by categories, 1996 Product Group Sales ($ bn) percetage (%) Surgical instruments 36.4 28.0 Consumables and supplies 33.9 26.1 Imaging and radiotherapy 25.9 19.9 In vitro diagnostics 18.1 13.9 - 78 - Electron-medical equipment 7.9 6.1 Dental equipment 7.8 6.0 Total 130.0 100.0 Source: Medical Options based on HIMA data Top 10 leading companies in the industry Medical Device sales Rank and company ($ billion) % of total revenue 1. Johnson & Johnson (US) 8.1 38 2. Baxter Healthcare (US) 5.4 100 3. Siemens (Germany) 4.7 8 4. Abbott Laboratories (US) 4.7 43 5. GE Medical (US) 3.9 5 6. Becton Dickinson (US) 2.8 100 7. Toshiba (Japan) 2.6 2 2.3 55 9. Medtronic (US) 2.2 100 10. Philips (Netherlands) 2.2 2 8. Boehringer Mannheim (Germany) Source: Clinica, October 6th, 1997 Current leading companies of the industry: - 79 - Source: Industrial Profile, Global Health Care Equipment & Supplies, Datamonitor (2008) - 80 - LEADING COMPANIES GE: dominator in imaging instruments (competitors: Siemens, Philips) GE Healthcare is a provider of medical imaging, medical diagnostics, patient monitoring systems, disease research, drug discovery and biopharmaceutical services. The company is a business segment of the General Electric Company. It has a strong presence in more than 100 countries including the US, China, India, Singapore, Japan and European markets. GE Healthcare generates revenues from five primary businesses, including diagnostic equipment and related services, healthcare facilities services, healthcare IT, diagnostic pharmaceuticals, and life sciences. The company recorded revenues of $16,562 million during the fiscal year ended December 2006, an increase of 9.3% over 2005. The operating profit of the company was $3,143 million during fiscal year 2006, an increase of 17.9% over 2005. Johnson & Johnson (J&J): Key player in health care supplies sector J&J is a global manufacturer of health care products as well as a provider of related services. The company operates predominantly through three divisions: consumer, pharmaceuticals and medical devices and diagnostics. J&J's consumer division develops and markets products for baby and kids care, skin care, oral care, wound care, women's health care, nutritional and over-the-counter pharmaceutical products. These products are distributed either through wholesalers or directly to independent and chain retail outlets. - 81 - Barriers for entrants • Huge R&D costs • Clinical trial • Regulatory approval: premarket approval applications (PMAs) • Intellectual property issues • Technical service and maintenance focused Competition for incumbents • Purchasers’ less concern about brand identity • Negligible switching costs (standard and mature products on the market) • Advantage of buyers’ position • Little price transparency • Interest of service, maintenance and price Six Forces in MD industry • Players: friends and foes of companies • Funding: revenue and profit • Policy: regulation pervading the industry • Technology: foundations of innovation • Customers: market not only patients • Accountability: cost and willingness to buy - 82 - Global market growth rate of the industry: Market growth Country rate (%) China 27.3 Thailand 18.1 India 16.0 Chile 14.8 South Korea 13.2 Brazil 9.9 Argentina 7.6 Mexico 7.4 US 6.8 Japan 6.1 EU (average) 5.0 Source: HIMA, 1997 Global Medical Technology Update - 83 - II. Preliminary patent analysis on CT Major manufacturer: GE, PHLIPS, SIEMENS, MEDTRONIC, MINDRAY Industrial Classification: ISIC Section: C - Manufacturing Division: 26 - Manufacture of computer, electronic and optical products 266 - Manufacture of irradiation, electro-medical and electrotherapeutic equipment 267 - Manufacture of optical instruments and photographic equipment 268 - Manufacture of magnetic and optical media US SIC Division D: Manufacturing Major Group 38: Measuring, Analyzing, And Controlling Instruments; Photographic, Medical And Optical Goods; Watches And Clocks Industry Group 384: Surgical, Medical, And Dental Instruments And Supplies 3841 Surgical and Medical Instruments and Apparatus EU Section: C - Manufacturing C26.6 - Manufacture of irradiation, electro-medical and electrotherapeutic equipment C26.7 - Manufacture of optical instruments and photographic equipment C26.8 - Manufacture of magnetic and optical media UK SECTION D MANUFACTURING Subsection DL MANUFACTURE OF ELECTRICAL AND OPTICAL EQUIPMENT - 84 - Group 33 Manufacture of medical, precision and optical instruments The generations of CT technology Computed tomography (CT) scanners have a typical history of evolving. The general classification of CT scanners based upon the arrangement of components and the mechanical motion required collecting the data. However, we should not assume that a higher generation number necessarily means a higher performance system. First generation (1970): translation of source/detector pair, rotating scan. A single X-ray source and a single X-ray detector cell collect all the data for a single slice. The source/detector pair is then rotated slightly and a subsequent set of measurements are obtained during a translation past the patient. Scan time: more than 4 min. Source of these illustrating pictures are Wiki.com Second generation: The beam measured by each detector is at a slightly different angle with respect to the object, each translation step generates multiple parallel ray projections. - 85 - Scanning gantry rotates around patient in 10◦ steps. The 2nd generation scanner is more efficient and faster. This generation is also referred to as a translate/rotate scanner with multiple parallel ray projections. Scan time may usually be 18-20s. Third generation: rotating x-ray source, rotating detector ring. A large detector array with enough, high spatial resolution cells allow the simultaneous measurement of a fan-beam projection of the entire patient cross-section. The imaging process is significantly faster than 1st or 2nd generation systems. However, very high performance detectors are needed to avoid ring artefacts and the system is more sensitive to aliasing. This generation is often referred to as rotate/rotate scanner geometry. Scan time can be as low as 500 ms. - 86 - Fourth generation: Tube rotates only geometry, rotating x-ray source, stationary detector ring. To avoid the sensitivity to ring artifacts, a design was developed using a stationary detector ring and a rotating X-ray tube. Because the reduced motion seemed consistent with a reduction in complexity, this new geometry is known as the fourth generation. Scan times of approximately 500 ms are possible. - 87 - Patent mapping analysis: Example patent (start point of search): Since 4-dimensional imaging is a dominate technology in CT manufacturing industry, a US patent related with 4-dimensional CT scanner which is assigned by Siemens was chosen for research in this case study. If put Multi-slice, 4D and low-dose together, no patent could be found in the search engine. US7245698, 4-dimensional digital tomosynthesis and its applications in radiation therapy Assignee: Siemens Medical Solutions USA, Inc. IP classification: • IPC SECTION A — HUMAN NECESSITIES A61 MEDICAL OR VETERINARY SCIENCE; HYGIENE A61N ELECTROTHERAPY; MAGNETOTHERAPY; RADIATION THERAPY; ULTRASOUND THERAPY A61N 5 Radiation therapy A61N 5/10 X-ray therapy; Gamma-ray therapy; Particle-irradiation therapy • UPC 378 X-ray or gamma ray systems or devices; 001 Specific application; 004 Computerized tomography; 015 Continuous mechanical rotation • ECLA HUMAN NECESSITIES, A MEDICAL OR VETERINARY SCIENCE; HYGIENE, A61 ELECTROTHERAPY; MAGNETOTHERAPY; RADIATION THERAPY, A61N Radiation therapy, A61N5/00 - 88 - X-ray therapy; Gamma-ray therapy; Particle-irradiation therapy, A61N5/10 Monitoring or verifying systems, A61N5/10E Verifying the position of the patient with respect to the radiation beam A61N5/10E1 Landscape of SIEMENS bio-imaging patent family (total number: 392) The result of 4-dimensional CT technology in SIEMENS patent family is 68 patents. The patent map is processed by “theme-map function” by Aureka. Blue dots are patents applied by user innovators. These patents are listed in following figures: - 89 - - 90 - [...]... this innovation- related information Ease and accuracy of the design space is the major competing advantage for userinnovators against established manufacturers During the time of a user innovator becoming user manufacturer, user innovation is also in the phase of diffusion If the innovation is promising enough or the design space is broad enough for established firms to enter the market and attempt to. .. develop an innovation by themselves Users often have another advantage over other potential innovators, especially manufacturers, with respect to conducting and protecting innovations from imitators User innovators can identify the unsatisfied demand and profit from the resulting innovation while keeping it in house as a trade secret This option is seldom available to manufacturers, who typically must... partially from users Usually, lead users are more active in the formation of user centered innovation Here is my summary on characteristics of different user activities in all innovation steps based on previous user innovation theoretical models: Steps of user innovation Invention & prototyping Information diffusion User community Emergence and aggregation of specified needs Lead user User-innovator... installation became more of a teaching experience of what not to do rather than what to do in a PACS installation Diffusion and commercialization: As efforts were made to build PACS in academic settings, manufacturers were beginning to work on commercial PACS, and the user community of PACS was developing the DICOM standard (Digital Imaging and Communications in Medicine) Since PACS can save costs and... can be a major source of innovation This conceptual work has started a research stream investigating users as the sources of innovation As commonly accepted in management research, innovation refers to successfully commercialized invention However, when scholars reported cases of user innovation, some cases are still in prototype phase, and some innovations are commercialized by manufacturers with the. .. groups: innovation by intermediate users and innovation by end consumers Actually, some scholars have already noticed and even emphasized the differences of characteristics of innovation by intermediate users and end consumers, because end user only aim for maximum of utility and intermediate users often aim to balance utility and profit This variance upon value network may lead to different choice on technology... this review study, papers are mainly selected from prestigious academic management journals: Academy of Management Review, Administrative Science Quarterly, IEEE Transactions on Engineering Management, International Journal of Technology Management, Journal of Product Innovation Management, Management Science, Strategic Management Journal, R&D Management and Research Policy as well as the Harvard Business... concept of User centered innovation This generalized concept includes the phenomenon that manufacturers absorb user innovators’ ideas and introduce them into the mass market, and that manufacturers absorb innovative ideas from their loyal users into R&D units to identify new market tendency In this case, the final innovation is possessed by established manufacturers; however, source of ideas is partially... must reveal an innovation in the form of a new product or service to potential adopters if they hope to sell it and thus profit from it (Harhoff et al, 2003) - 10 - 1.2 Motivation and Objective Based on an increasing attention and interest in research about the phenomenon and tendency of user innovation, a classified and comprehensive review of technological innovation management literature with the perspective... invention company The market and Commercialization fans of the innovation Table 2.1 Characteristics of different user activities in all innovation steps     Table 2.1 summarized the different characteristics of users during the process of user innovation It could also be considered as typical model of user innovation Some strategic management researches within different entities are reviewed in Section ...NATIONAL UNIVERSITY OF SINGAPORE From user demand to manufacturer design A Review of the Literature on User Innovation SHAO Dong (Donald) DIVISION OF ENGINEERING & TECHNOLOGY MANAGEMENT NATIONAL... communities are eager to share and exchange this innovation- related information Ease and accuracy of the design space is the major competing advantage for userinnovators against established manufacturers... rational connection inside each research area of user innovation, and it has also advanced the knowledge in the management of innovation with perspective from the demand side, with discussion