Finding commercially attractive user innovations: A test of lead user theory

Nikolaus Franke, Eric von Hippel and Martin Schreier

No 4536-05, Working papers from Massachusetts Institute of Technology (MIT), Sloan School of Management

Abstract: Firms and governments are increasingly interested in learning to exploit the value of lead user innovations for commercial advantage. Improvements to lead user theory are needed to inform and guide these efforts. In this paper we empirically test and confirm the basic tenants of lead user theory. We also discover some new refinements and related practical applications. Using a sample of users and user-innovators drawn from the extreme sport of kite surfing, we analyze the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead user characteristics those users display. We provide a first empirical analysis of the independent effects of its two key component variables. In our empirical study of user modifications to kite surfing equipment, we find that both components independently contribute to identifying commercially attractive user innovations. Component 1 (the "high expected benefits" dimension) predicts innovation likelihood, and component 2 (the "ahead of the trend" dimension) predicts both the commercial attractiveness of a given set of user-developed innovations and innovation likelihood due to a newly-proposed innovation supply side effect. We conclude that the component variables in the lead user definition are indeed independent dimensions and so neither can be dropped without loss of information - an important matter for lead user theory. We also find that adding measures of users' local resources can improve the ability of the lead user construct to identify commercially-attractive innovations under some conditions. The findings we report have practical as well as theoretical import. Product modification and development has been found to be a relatively common user behavior in many fields. Thus, from 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 fields sampled to date. 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 products in the collectivity of user-developed innovations. We discuss the implications of these findings for theory and also for practical applications of the lead user construct, i.e. how variables used in lead user studies can profitably be adapted to fit specific study contexts and purposes.

Keywords: Lead User Theory (search for similar items in EconPapers)
Date: 2005-06-03
New Economics Papers: this item is included in nep-geo and nep-ino
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Citations: View citations in EconPapers (3)

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