22 October 2008
Others
The presence of this world-renowned and leading expert in innovation is but another example of the strong commitment by the Business School at the University of Deusto to competitiveness, to providing a different approach and a sign of identity, as well as to bringing the market reality closer through dialogue.To this purpose, nothing better than to invite an expert on this matter such as Von Hippel to open the first Deusto Business School Forum, whose first session was held last 21 October in Madrid, and on 22 October in Bilbao, in the frame of the 7th Business Global Conference+i.
Expert Von Hippel’s speech was packed with useful ideas, and he provided key tips for companies so that they can find the driving force to promote design and reconsider opening the internal processes of innovation and interacting with external sources. His reflections were supplemented with more ideas at the round table discussion that was held after the plenary session, which was chaired by the Director of Deusto Business School, Ramón O’Callaghan. Other participants included Henry Chesbrough, lecturer and executive director of the Center for Open Innovation at the Haas School of Business, University of Berkeley.
Knowledge helps to position oneself in the market.But who leads this source of ideas?Unlike what has been defended so far, ‘innovation stems from individuals, not from companies’, Von Hippel pointed out at the beginning of his lecture. This statement is based on a broad analysis carried out by 150 scholars worldwide, and whose research can be found in this expert’s books under the title ‘The sources of innovation’ or ‘Democratizing Innovation’.In his lecture at the Business Global Conference+I forum, professor Von Hippel explained the practical methods to increase the development processes of products and services.‘Users innovate, but they are invisible in the government statistics and market research studies’.And it is here where this new approach to understand innovation results from, according to Von Hippel. It involves democratising it and considering that the ‘great majority of products and services are generated by individuals to meet their needs’.This means that manufacturers are involved in the product engineering, but not in the design’.And he gave practical cases to explain this phenomenon.Dr.Gibbon developed the artificial heart-lung machine after failing to save a patient’s life in the operating theatre.Other surgeons saw the same need in this machine, ‘took it’, and then, a community was created.In other words, it was ‘a company created by users’.By then, there was already a ‘large market offering certainty’ for the manufacturer to take part. That is the key.‘If you don’t know where innovations come from, you can’t know where to look for the next’, Von Hippel said.
This experience changes the traditional idea that innovation is exclusively carried out in the research and development departments (R+D).In Von Hippel’s opinion, a company with a forward-looking approach must apply the open innovation model.
To illustrate this, another example given by this expert at the Deusto Business School Forum was the case of Lego company.Seven engineers worked in the development of Lego Mindstorms robotics game for seven years.When they launched it into the market, in just three weeks, there were about one thousand hackers working on it on the Internet.There were online competitions.And the result was that users improved the product.There are 20,000 Lego fans who have organised themselves in associations to work in innovation, Von Hippel explained.
In this expert’s opinion, ‘user-led innovation will be the driving force to move manufacturers away from product design’.This trend has been triggered by Internet users. And it is a way to reduce R+D huge investments.But as Von Hippel pointed out, ‘we need changes in government policies so that the wrong people are not subsidised’.We have to look for user industries and allow their dissemination’, he concluded.
This same topic was discussed during the round table that was held after Von Hippel’s speech.In this sharing of ideas, the chair and Director of Deusto Business School, Ramón O’Callaghan, asked about how to formulate policies.In this regard, professor Henry Chesbrough explained that we have to be aware and confident in these new sources of wealth of innovation.And policies must be balanced both for the big and the small.In addition, other topics that were covered in this discussion between experts included the rethinking the economy of scale, the creation of new business models, including the capacity to build platforms, and the co-creation of services between customers and suppliers.Another topic was the limits between companies and how to be the only ones;and also how to orchestrate value.With this new approach faced by companies, professor Von Hippel stressed the importance of ‘recognising user-led innovations and using external sources’.
