THE LESSON LEARNT FROM Garcia & Calantone. 2002. A critical look at technological innovation typology and innovativeness terminology: A literature rev

The author reviewed no less than 15 constructs and at least 51 distinct scale items by using 21 empirical studies in the new product development (NPD) literature. These studies did not use the same terminology as the research being undertaken, which leads to "new" findings that are in fact rehashes of previous work.

About "innovation," it is "an iterative process initiated by the perception of a new market and/or new service opportunity for a technology-based invention which leads to development, production, and marketing tasks striving for the commercial success of the invention. [...] This iterative process implies varying degrees of innovativeness and thus, necessitates a typology to describe different types of innovations. [...] It is important to elucidate that an invention does not become an innovation until it has processed through production and marketing tasks and is diffused into the marketplace. [...] Thus, an innovation differs from an invention in that it provides economic value and is diffused to other parties beyond the discoverers" (p. 112).

About "innovativeness," it is a "measure of the potential discontinuity a product (process or service) can generate in the marketing and/or technological process" (p. 113). This discontinuity could be broken into two frameworks: "(a) macro level where the concern is measuring how the characteristics of product innovation is new to the world, the market, or an industry; and (b) a micro level where product innovativeness is identified as new to the firm or the customer.

Basing on these levels (macro/micro) and S-curves (marketing/technology/both), the author categorized the innovation into three kinds: (1) radical innovations, which are innovations that cause marketing and technological discontinuities on both a macro and micro level; (2) incremental innovations, which occur only at a micro level and cause either a marketing or technological discontinuity but not both; and (3) really new innovations, which cover the combinations in between these two extremes (p. 120).

Radical innovations often do not address a recognized demand but instead created a demand previously unrecognized by the consumer. A radical innovation can be identified by the initiation of a new technology and new marketing S-curve (p. 122). Really new innovations are easily identifiable by the criteria that a discontinuity must occur on either a marketing or technological macro basis in combination with a micro level discontinuity. They can evolve into new product lines, product line extensions with new technology, or new market with existing technology. "Incremental innovations will not result in macro discontinuities which are only seen in radical or really new innovations" (p. 123). Because of the iterative nature, imitative products are frequently new to the firms, but not new to the market. All in all, if the market discontinuity is low or the technological discontinuity is low, this leads to low product innovativeness. On the contrary, high discontinuity in both factors leads to high product innovativeness (p. 124).

PS: the distinction between the marketplace and an industry is that the industry is comprised of several different markets. If an innovation is new to the industry, it is new to the marketplace (p. 124). New to the world implies new to the industry and new to the firm.

To use the customer's perspective for identifying products would be liken as letting the customer drive the innovative process of the firm (p. 125).

THE LESSON LEARNT FROM Piller et al. 2005. Overcoming mass confusion: Collaborative customer co-design in online communities

When participating in a community, users often faced (1) burden of choice of finding the right option from a large number of customization options; (2) the difficulty of addressing individual needs and of transferring them into a concrete product specification; and (3) uncertainties (based on missing information) about the behavior of the product. These problems were named as "mass confusion." To solve the confusion, the author emphasized that traditional mass customization for transaction is not an appropriate way but the collaborate customer co-design would work.

In contrast, the community for collaborative customer co-design is different. It brings (1) a better starting configuration to users, (2) the fostering joint creativity and problem solving, and (3) the building of trust and the reduction of the perception of risk (p. 13). In this community, all customers can be members of the community instead of just some lead users as in the case of innovation community; and it often fosters aesthetic creativity instead of the joint solving of technical problems (p. 12). "Customization with regard to aesthetic design is often influenced by peers and the taste of a group rather than by the individual taste of a single person" (ibid).Of course, to solve the same confusion, the community for transaction, as a business community, could be improved by developing appropriate toolkits for cus

tomer co-design and building strong customization brands. However, this is the network between users and their suppliers, where the users often have less motivation to participate.

Compared with each other:

First, often, firms just offer a standard product as pre-configuration. Instead of focusing on automatic filtering processes in which a single customer does not get in contact with other customers, the community setting for customer co-design empowers an individual design process by sharing knowledge, providing a better fitting pre-configuration. Hence, within the community "affinity groups (Peppers & Rogers, 1997)" were formed and customers would receive recommendations for future purchases without the need to look at a broad range of products (pp. 14-15).

Second, communities for co-design reflect expert knowledge of customer groups with interact not only with one company, but importantly also with each other. This can

foster creativity and stimulate better solutions due to the effect of intrinsic motivation on innovation-related activities (self reward and exchange of information).

Third, a customized solution that is jointly developed by a group of users is often more robust. Communities where users can interact with each other can help in generating trusted recommendations. Communities of co-design could further enhance trust building and reduce the perceived risk of (potential) buyers of a customized product by building word-of-mouth communication.

"Customers participated in the community because they can directly benefit from a customized product variant, but also due to factors of intrinsic motivation as well as the peer recognition and reputation. [...] From a customer perspective, contributing to an anonymous information pool via the toolkit would remain a simple customer-supplier-interaction, most certainly lacking users' motivation" (p. 19).

All in all, form the mass customization, the customers could get the returns - (1) the value of a customized product and (2) rewards from the design process such as flow experience; but had to incur the costs - (1) the premium paid for the individualized product compared to a standard offering and (2) the drawbacks of the customers' active participation in value creation during the configuration process.

To analyze the above ideas, authors made use of Adidas and Lego as descriptive research, and utilized the cases of My Virtual Model, Usertool, American Eagle, and Swatch Via Della Spiga, as exploratory.

THE LESSON LEARNT FROM Baldwin & von Hippel. 2009. Modeling a paradigm shift: From producer innovation to user and open collaborative innovation

In this paper, the author demonstrated a paradigm shift in innovation. In producer innovation paradigm, it was assumed that "a producer serving many customers can afford to invest more in an innovation design than any single user" (p. 2); and there are four reasons contributing to this preeminence of mass-produced products in economy: (1) computational resources were scarce, (2) there was a close tie between design of items and the mass-production technologies, (3) modular design methods were not well understood, and (4) cheep and rapid communication was not technologically possible.

Here, from the factors of design cost and communication cost, the feasibility of each innovation model was argued. Adopting Chandler's logic, they expected a particular organizational form to be prevalent when its technologically determined cost are low and to be ascendent when its costs are declining relative to the costs of other forms (p. 8). They do not believe that producer innovation will disappear but they do expect it to become less pervasive and ubiquitous than was the case during most of the 20th century. Examples of producer innovators are: (1) a firm or individual that patents an invention and licenses it to others; (2) a firm that develops a new process machine to sell to its customers; (3) a firm that develops an enhanced service to offer its

A given mode of innovation is viable with respect to a particular innovation opportunity if the innovator finds it worthwhile to incur the requisite costs to gain the anticipated value of the innovation (p. 9). Innovation opportunity has four generic costs: design cost, communication cost, production cost, and transaction cost. To make the argument as clear as possible, the author first focus on the communication and design cost, holding production and transaction costs constant. clients. With respect to an open collaborative innovation project are: (1) the participants are not rivals to the innovation design and (2) they do not individually or collectively plan to sell products or services, such as an open source software project.

In the circumstance of single user innovation, the effort of innovation is worthwhile if the value is greater than the user's design cost: d[s]

In the circumstance of producer innovation, producers can economically justify undertaking larger designs than can single users, because they expect to spread their design costs over many purchasers. Here, producers were assumed to know their customers' willing-to-pay for innovative products: Expected profit = p*Q*-d[p]-c[p]. Here the design costs are higher than the value of the innovation to a single user. And, when the communication cost is low so that the sum of design and communication costs fall below the producer's bound, the producer could

innovate. (1) The size of the potential market, and (2) the need to communicate are affecting the viability of producer innovation.

The bounds of open collaborative innovation are the communication cost of user i is lower than his expected benefit from communicating (the probability that member j will respond; the fraction of remaining design that member j can provide; and the value that user i may obtain). When working together and contributing his or her own part, the total design investment will be the sum of their individual design costs. Thus, OCI operating within a task-divisible and modular architecture can pursue much larger innovation opportunities than single user innovators acting alone.

About the production cost, the author emphasized that there were differences between information products and physical products. There is a contrast between mass production and mass customization. Sometimes, the product-specific production systems make the producer innovation model dominate. About the transaction cost, the free reveal activity of users made the cost decrease but alike to classic transaction costs in patent and secrecy, there would be cost of enforcing GPL. The regulation may also bring costs to OCI.

THE LESSON LEARNT FROM Parhankangas & Arenius. 2003. From a corporate venture to an independent company: A base for a taxonomy for corporate spin-off

By using the data on 50 technology-related spin-off firms from large Finnish corporations, the authors categorized the corporate spin-offs into 3 types: spin-off developing new technologies, spin-offs serving new markets, and restructuring spin-offs.

They perceived that "the decision to form a spin-off firm is deeply rooted in the nature of interaction between the venture to be spun-off and its parent firm" (p. 464). The study focuses on new business formation based on the business ideas developed within the parent firm being taken into a self-standing firm (p. 464). They utilized two perspectives: resource-based approach and resource-dependent approach. The former is fundamentally concerned with the internal accumulation of assets; while the latter pays close attention to the behavior of organizations and individuals in a resource exchange relationship. In sum, the RBA seeks to explain the outcome of the resource sharing relationship, and the RDA is more concerned with motivations driving the behavior of the parties.

From these perspectives, they proposed that (1) before spin-off, relatedness enhances competence development in a new venture; (2) spin-off decisions are associated with reduced resource fit between the parent firm and the venture; and (3) spin-off ventures with intensive resource sharing linkages with the parent firm are less likely to diversify away from their original competence base than spin-off firms with less intensive resource sharing linkages.

Then, they conducted cluster analysis. In Cluster 1, the new technology group, all the spin-off ventures are engaged in developing leading-edge, new-to-market technologies. The idea fro technology development came from outside the parent firm. There were no resource linkages between parent and venture but rather is collaboration with university or research institutes. The spin-off-triggering factor was mostly the restructuring programs undertaken by the parent firm. In Cluster 2, the new market group, the parent and venture essentially had the same technology base, but the impetus for the ventures within the parent firm was either to support the core businesses of the parent; or to exploit the possibilities of core technologies to the fullest. As the spin-off firm introduced new product applications of the technology, the linkages tended to weaken. In Cluster 3, the restructuring group, the ventures were old established business units of parent firms. The technological competencies being developed were rather mature. At the earlier stages of the venture evolution, these ventures had shared technology, production, marketing- and distribution- related resources with other business units of the parent firm. This will continue until the ventures established its position in the markets.

THE LESSON LEARNT FROM von Hippel. 1976. The dominant role of users in the scientific instrument innovation process

From 80% of 111 cases of scientific instruments, von Hippel found that the firms comprising the industry are not in themselves necessarily innovative but rather only provide the product engineering and manufacturing function for instrument users (e.g., scientists).

He analysed three kinds of innovations - basic innovations, major improvement, and minor improvement - according to the degree of the increase in functional utility. What makes an innovation major one is dependent on the point of view of the instrument user (p. 218). Only the first commercial introduction of an innovation is included in the sample; and is included only if it is commercially successful. By commercial success, it means that the invention is being offered for sale, by at least one commercializing company, from the time of innovation until the present day (p. 217).

Manufacturers may perform engineering work, but this work typically affects only the engineering embodiment of the user's invention, not its operating principles. Furthermore, nine of the ten profitable commercialized products were the result of user-dominated innovation processes. Users often have to take considerable initiative to bring a company to enter a product line new to it; and manufacturers who accepted the idea would often introduce a new instrument type to its established customer base (p. 223). The precommercial diffusion of significant user inventions via "homebuilt" replications of the inventor's prototype design by other users. This enshrines relatively minor activities within the manufacturer as the "innovation process" and relegates major activities by the user to the status of "input" to that process (p. 230).

Nevertheless, von Hippel, also hasten to add that "at this point we by no means wish to suggest that the patterns which we will describe are in any sense 'pure types' or represent an exhaustive listing of possible innovation patterns" (p. 231). The user invented because some needed the invention as a day-in, day-out functional tool for their work; and others were motivated to invent and reduce the invention to practice because how it performed was a useful means of testing and deepening their understanding of the principles underlying this operation (p. 235). A firm should not make use and would not find all the information from the users' invention useful or novel.

THE LESSON LEARNT FROM von Hippel. 1986. Lead users: A source of novel product concepts

Lead user and usage patterns

This is a paper which is telling us how and why to introduce lead users into the process of innovation. By lead users, they are different from the manufacturers or typical users in that (1) they face unique needs; and (2) they derive net benefits from the solution to their needs. "By industrial and consumer products, they are only components in larger usage patterns which may involve many products. Since a change in one component can change perceptions of and needs for some or all other products in that pattern, users must first identify their existing multiproduct usage patterns in which the new product might play a role" (p. 792). In traditional marketing research such as similarity-dissimilarity method, there is a problem that "neither method contains an effective mechanism to encourage this outcome (new attributes of a product)" (p. 793).

Although people who are more familiar with one usage pattern of a product may not sense the new pattern of that product - say, "the familiarity with existing product attributes and users interferes with an individuals' ability to conceive of novel attributes and users" (p. 792). But on the other hand, von Hippel emphasized that "the constraint of users to the familiar does not lessen the ability of marketing research to evaluate needs for new products by analyzing typical users" since "the 'new' is reasonably familiar to the users" (p. 796). In particular, users able to obtain the highest net benefit from the solution will be the ones who have devoted the most resources to understanding it. And it follows that these users would have the richest real-world understanding of the need to share with inquiring market researchers (p.797).

Lead user and innovation

Since problem-solving activity has been motivated by expectations of economic benefit, and since lead users have been defined in part as users positioned to obtain high net benefit from a solution to their needs, it is reasonable that lead users may have made some investment in solving the need at issue" (p. 800).

Lead users' innovation and general market

With respect to users of industrial products, they "typically measure the value of proposed new industrial products in economic terms, so important underlying trends related to product value are often inescapably clear to those in the industry" (p. 798). But with respect to users of consumer products, there is often no underlying stable basis for comparison, so the accurate trend identification is often more difficult. Thus, in the instance of industrial goods, the translation of lead users' innovation to general market is not a serious problem while in the instance of consumer goods, a test of the applicability might be needed in the translation. "