Collected Papers of Eric von Hippel

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Section 1: Innovation by users and lead users

There are many more papers in this section than you can stand to read, I am sure. This is where my work began. I started by trying to document the importance of user innovation – and then moved painstakingly on to try to better understand and explain the phenomenon. Fortunately, I have wonderful colleagues and coauthors who share both the work and the fun!

von Hippel, E. (1976). The dominant role of users in the scientific instrument innovation process. Research Policy, 5(3), 212-239. doi: 10.1016/0048-7333(76)90028-7 (PDF)

Abstract: A sample of one hundred and eleven scientific instrument innovations was studied to determine the roles of instrument users and instrument manufacturers in the innovation processes which culminated in the successful commercialization of those instruments. Our key finding was that approximately 80% of the innovations judged by users to offer them a significant increment in functional utility were in fact invented, prototyped and first field-tested by users of the instrument rather than by an instrument manufacturer. The role of the first commercial manufacturer of the innovative instrument in all such cases was restricted, we found, to the performance of product engineering work on the user prototype (work which improved the prototype's reliability, `manufacturability', and convenience of operation, while leaving its principles of operation intact) and to the manufacture and sale of the resulting innovative product. Thus, this research provides the interesting picture of an industry widely regarded as innovative in which the firms comprising the industry are not in themselves necessarily innovative, but rather -- in 80% of the innovations sampled -- only provide the product engineering and manufacturing function for innovative instrument users.
We term the innovation pattern observed in scientific instruments a `user dominated' one and suggest that such a pattern may play a major role in numerous industries.

von Hippel, E. (1977). The Dominant Role of the User in Semiconductor and Electronic Subassembly Process Innovation. IEEE Transactions on Engineering Management, EM-24(2), 60-71.  

von Hippel, E. (1977). Transferring process equipment innovations from user-innovators to equipment manufacturing firms. R&D Management, 8(1), 13-22. doi: 10.1111/j.1467-9310.1977.tb01270.x (PDF)

Abstract: Product users are not usually thought of as product innovators. We have found, however, that 67% of the significant process equipment innovations in the two fields of semiconductor manufacture and electronic subassembly manufacture were in fact developed by equipment users rather than equipment manufacturers. Our analysis of the process by which these user innovations are transferred to the first firm to manufacture them commercially shows three major patterns: 46% transferred by multiple user-manufacturer interactions; 21% transferred via a direct purchase order from the inventive user; 8% manufactured by a user firm for commercial sale. A final 25%, we found, were apparently not transferred, but were reinvented by the equipment manufacturing firm. Inventive user firms and adopting equipment manufacturing firms are characterized, and the implications of our findings discussed.

von Hippel, E. (1978). Successful Industrial Products from Customer Ideas. Journal of Marketing, 42(1), 39-49 (PDF)

Abstract: The article discusses the use of consumer buying models in industrial marketing strategies. A comparison of the manufacture-active paradigm (MAP) and the consumer-active paradigm (CAP) is presented. Customer requests can be adequate tools in the development of new products and technologies. Many industrialists use the CAP model to develop custom products which eventually become standard. Analysts say when the consumer need for a product is overt certain characteristics should determine the product idea process. Those include an easy, low-cost identification of customers through market surveys and an evaluation of long-term selling opportunities.

von Hippel, E., & Finkelstein, S. N. (1979). Analysis of Innovation in Automated Clinical Chemistry Analyzers. Science & Public Policy, 6(1), 24-37.  

von Hippel, E. (1982). Appropriability of innovation benefit as a predictor of the source of innovation. Research Policy, 11(2), 95-115. doi: 10.1016/0048-7333(82)90037-3 (PDF)

Abstract: It has been empirically observed that, in some industries product users are the most frequent sources of product innovations while, in other industries, product manufacturers are. I hypothesize that such differences are caused by differences in the ability of these two "functional" categories of innovators to appropriate innovation benefit. I explore this hypothesis by examining the real-world effectiveness of mechanisms (such as patents and lead time) used for the appropriation of innovation benefit and the dependence of this effectiveness on the functional relationship between innovator and innovation.

von Hippel, E. (1986). Lead Users: A Source of Novel Product Concepts. Management Science, 32(7), 791-805 (PDF)

Abstract: Accurate marketing research depends on accurate user judgments regarding their needs. However, for very novel products or in product categories characterized by rapid change--such as "high technology" products--most potential users will not have the real-world experience needed to problem solve and provide accurate data to inquiring market researchers. In this paper I explore the problem and propose a solution: Marketing research analyses which focus on what I term the "lead users" of a product or process. Lead users are users whose present strong needs will become general in a marketplace months or years in the future. Since lead users are familiar with conditions which lie in the future for most others, they can serve as a need-forecasting laboratory for marketing research. Moreover, since lead users often attempt to fill the need they experience, they can provide new product concept and design data as well. In this paper I explore how lead users can be systematically identified, and how lead user perceptions and preferences can be incorporated into industrial and consumer marketing research analyses of emerging needs for new products, processes and services.

Urban, G. I., & von Hippel, E. (1988). Lead User Analyses for the Development of New Industrial Products. Management Science, 34(5), 569-582 (PDF)

Abstract: Recently, a "lead user" concept has been proposed for new product development in fields subject to rapid change (von Hippel 1986). In this paper we integrate market research within this lead user methodology and report a test of it in the rapidly evolving field of computer-aided systems for the design of printed circuit boards (PC-CAD). In the test, lead users were successfully identified and proved to have unique and useful data regarding both new product needs and solutions responsive to those needs. New product concepts generated on the basis of lead user data were found to be strongly preferred by a representative sample of PC-CAD users. We discuss strengths and weaknesses of this first empirical test of the lead user methodology, and suggest directions for future research.

Herstatt, C., & von Hippel, E. (1992). From experience: Developing new product concepts via the lead user method: A case study in a "low-tech" field. Journal of Product Innovation Management, 9(3), 213-221. doi: 10.1016/0737-6782(92)90031-7 (PDF)

Abstract: Conventional market research methods do not work well in the instance of many industrial goods and services, and yet, accurate understanding of user need is essential for successful product innovation. Cornelius Herstatt and Eric von Hippel report on a successful field application of a "lead user" method for developing concepts for needed new products. This method is built around the idea that the richest understanding of needed new products is held by just a few users. It is possible to identify these "lead users" and then draw them into a process of joint development of new product concepts with manufacturer personnel. In the application described, the lead user method was found to be much faster than traditional ways of identifying promising new product concepts as well as less costly. It also was judged to provide better outcomes by the firm participating in the case. The article includes practical detail on the steps that were used to implement the method at Hilti AG, a leading manufacturer of products and materials used in construction.

Riggs, W., & von Hippel, E. (1994). The Impact of Scientific and
Commercial Values on the Sources of Scientific Instrument Innovation. Research Policy, 23(4), 459-469. doi: 10.1016/0048-7333(94)90008-6

Abstract: In this study we explore the relationship between the sources of innovation and incentives to innovate in a sample of 64 innovations related to Auger and Esca, two types of scientific instrument used to analyze the surface chemistry of solid materials. We find that innovations with high scientific importance tend to be developed by instrument users, while innovations having high commercial importance tend to be developed by instrument manufacturers. We also find that the ratio of user and manufacturer innovation affecting a given type of instrument can vary as a function of that instrument type's perceived scientific and commercial importance. Finally, we find that the scientific and commercial importance of innovations developed for Auger and Esca, and the frequency with which these have been developed, have varied significantly over time.

von Hippel, E., & Riggs, W. (1996). A lead user study of electronic home banking services : lessons from the learning curve. Sloan Working Paper, Sloan School of Management, Massachusetts Institute of Technology. Retrieved November 29, 2008, from

Abstract: The lead user method for identification of new product and service
concepts is built around the idea that the richest understanding of new product and service needs is held by "lead users." Such users can be systematicallyidentified, and the information they hold can be used for purposes ranging from new product and service development to the development of corporate strategy.

Product and service concept development methods that incorporate inputs from lead users are currently being adopted by a number of companies. In this article we report on the successful use of the lead user method in the field of electronic home banking services. Methods used in this case study are described in detail, and four general "lessons from the learning curve" with respect to lead user method practices are presented in a final discussion section: (1) the value of identifying lead users via a networking process rather than by surveys of likely user populations; (2) an "innovation first" approach to lead user identification; (3) the value of understanding lead user systems when developing new product and service concepts; (4) learning from vs. adopting lead user innovations.

von Hippel, E., Thomke, S., & Sonnack, M. (1999). Creating Breakthroughs at 3M. Harvard Business Review, 77(5), 47-57 (PDF)

Abstract: The article speculates that companies say they want breakthrough products, but most are far more adept at making incremental improvements to existing lines. The article asserts there are two primary reasons for this: companies face strong incentives to focus on the short term, and developers simply don't know how to achieve breakthroughs because there is usually no effective system in place to guide them and support their endeavors. Efforts at 3M Corporation found that many commercially important products are initially conceived by users, and these products tend to be developed by "lead users," companies, organizations, or individuals that are well ahead of market trends. By using the "lead user" method, companies can systematically find people and organizations on the cutting edge.

Morrison, P. D., Roberts, J. H., & Von Hippel, E. (2000). Determinants of User Innovation and Innovation Sharing in a Local Market. Management Science, 46(12), 1513 (PDF)

Abstract: It is known that end users of products and services sometimes innovate, and that innovations developed by users sometimes become the basis for important, new commercial products and services. It has also been argued and to some extent shown that such innovations will be found concentrated in a "lead user" segment of the user community. However, neither the characteristics of innovating users nor the scope of the community that they "lead" has been explored in depth. In this paper, we explore the characteristics of innovation, innovators, and innovation sharing by library users of OPAC information search systems in Australia. This market has capable users, but it is nonetheless dearly a "follower" with respect to worldwide technological advance. We find that 26% of users in this local market nonetheless do modify their OPACs in both major and minor ways, and that OPAC manufacturers judge many of these user modifications to be of commercial interest. We find that we can distinguish modifying from nonmodifying users on the basis of a number of factors, including theft "leading-edge status" and theft in-house technical capabilities. We find that many innovating users freely share their innovations with others, and find that we can distinguish users that share information about their modifications from users that do not. We conclude by considering some implications of our findings for idea generation practices in marketing.

Lilien, G. L., Morrison, P. D., Searls, K., Sonnack, M., & von Hippel, E. (2002). Performance Assessment of the Lead User Idea-Generation Process for New Product Development. Management Science, 48(8), 1042-1059 (PDF)

Abstract: Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The 'lead user process' takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities--and we find that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after five years--more than eight times higher than forecast sales for the average contemporaneously conducted 'traditional' project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.

Demonaco, H. J., Ali, A., & von Hippel, E. (2006). The major role of clinicians in the discovery of off-label drug therapies. Pharmacotherapy, 26(3), 323-32. doi: 10.1592/phco.26.3.323 (PDF)

Abstract: OBJECTIVE: To determine the role of clinicians in the discovery of off-label use of prescription drugs approved by the United States Food and Drug Administration (FDA). Data Sources. Micromedex Healthcare Series was used to identify new uses of new molecular entities approved by the FDA in 1998, literature from January 1999-December 2003 was accessed through MEDLINE, and relevant patents were identified through the U.S. Patent and Trademark Office. DATA SYNTHESIS AND MAIN FINDING: A survey of new therapeutic uses for new molecular entity drugs approved in 1998 was conducted for the subsequent 5 years of commercial availability. During that period, 143 new applications were identified in a computerized search of the literature for the 29 new drugs considered and approved in 1998. Literature and patent searches were conducted to identify the first report of each new application. Authors of the seminal articles were contacted through an electronic survey to determine whether they were in fact the originators of the new applications. If they were, examination of article content and author surveys were used to explore if each new application was discovered through clinical practice that was independent of pharmaceutical company or university research (field discovery) or if the discovery was made by or with the involvement of pharmaceutical company or university researchers (central discovery). Eighty-two (57%) of the 143 drug therapy innovations in our sample were discovered by practicing clinicians through field discovery. CONCLUSION: To our knowledge, the major role of clinicians in the discovery of new, off-label drug therapies has not been previously documented or explored. We propose that this finding has important regulatory and health policy implications.

Franke, N., von Hippel, E., & Schreier, M. (2006). Finding Commercially Attractive User Innovations: A Test of Lead-User Theory. Journal of Product Innovation Management, 23(4), 301-315. doi: 10.1111/j.1540-5885.2006.00203.x (PDF)

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 to guide these efforts. The present study empirically tests and confirms the basic tenets of lead-user theory. It also uncovers some new refinements and related practical applications. Using a sample of users and user-innovators drawn from the extreme sport of kite surfing, an analysis was made of the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead-user characteristics those users display. A first empirical analysis is provided of the independent effects of its two key component variables. In the empirical study of user modifications to kite-surfing equipment, it was found 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. It was concluded that the component variables in the lead-user definition are indeed independent dimensions, so neither can be dropped without loss of information--an important matter for lead-user theory. It also was found 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 reported here 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 percent 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. The implications of these findings for theory as well as for practical applications of the lead-user construct are discussed--that is, how variables used in lead-user studies can profitably be adapted to fit specific study contexts and purposes.

Oliveira, P. & von Hippel, E. A. (2009). Users as Service Innovators: The Case of Banking Services. Research Paper, MIT Sloan School of Management. Retrieved October 20, 2009, from (PDF)

Abstract: Many services can be self-provided. An individual user or a user firm can, for example, choose to do its own accounting – choose to self-provide that service - instead of hiring an accounting firm to provide it. Since users can ‘serve themselves’ in many cases, it is also possible for users to innovate with respect to the services they self-provide. In this paper, we explore the histories of 47 functionally novel and important commercial and retail banking services. We find that, in 85% of these cases, users self-provided the service before any bank offered it. Our empirical findings differ significantly from prevalent producer-centered views of service development. We speculate that the patterns we have observed in the banking industry will be found to be quite general. If so, this will be an important matter: perhaps 75% of GDP in advanced economies today is derived from services. We discuss the implications of our findings for research and practice in service development.