Users and Their Communities as Agents of Product and Market Change.

Academics and practitioners have long been interested in understanding the sources and causes of innovative activity and the relationship between innovation and industrial change. Existing theory assumes innovative activity to be the domain of firms and research institutions, and commercial activity to be the domain of firms and entrepreneurially-minded individuals. This paper highlights the idea that social activity may precede and heavily influence both firm and market formation via the innovative activities that take place among loosely affiliated individuals sharing common interests (?communities?). Based on an inductive study of the innovation and commercialization histories of 57 key skateboarding, snowboarding, and windsurfing equipment innovations, this paper finds that (1) User-innovators often receive rich feedback from others with related interests and expertise. This feedback not only helps improve the innovation, but may also be used to make commercialization decisions regarding the innovations. That is, communities may serve as an effective development and selection mechanism for user-innovations. (2) User-innovators may start firms in order to appropriate financial benefits from their innovation. This view is unique in that it shows that a significant portion of innovation development and selection activity may be organized outside the boundaries of firms, markets, and research institutions. Firms (and markets) may thus be the consequence, not the cause, of innovation. A process model highlighting the role of user-innovators and their communities is also presented. [ABSTRACT FROM AUTHOR]

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