Journal of the National Research University Higher School of Economics

User innovation is the result of information asymmetry. Manufacturers are not completely aware of consumer needs; as a result, skilled users can improve products and suit them to their needs. Users best judge what will lead to commercial success, and they have long been recognized as a valuable source of knowledge to harvest for future innovation. Therefore, firms now involve customers in developing product ideas that are usable and valuable. The challenge is that valuable consumer-related knowledge is widely dispersed, and aggregating it is a complex and expensive task. However, the development of ICT opens up new possibilities, in particular, for innovation communities linking users with different needs and experiences. Interaction with users allows companies to integrate distributed knowledge, which gives the opportunity to improve the functionality and quality of the developed products.

This paper analyses trends of user innovation development, their motivations to participate in innovation communities, the benefits that the company can gain from interaction with these communities, and the risks associated with a particular focus on the needs of a limited or overly wide range of consumers. It provides cases of user innovation in a number of sectors: software, hardware, construction, sports, medicine, fashion and design.

The authors conclude that innovation communities are a powerful tool allowing integration of the dispersed knowledge of users into strategic decision making. The knowledge generation of inputs from innovation communities is facilitated by new analysis and data mining tools that make it easy to visualize and detect structures in virtual communication. The use of such instruments has large innovation potential if companies succeed in integrating real life conditions into technical innovations.