Measuring user innovation The Finnish Community Innovation Survey 2010 (CIS 2010)

10th International Open and User Innovation Workshop July 30-August 1, 2012 Harvard Business School Boston, MA, USA Mervi Niemi, Statistics Finland Jari Kuusisto, University of Vaasa

User innovation and the Finnish CIS 2010 method

Target population covered more than 8,000 enterprises, around half of these businesses are in service industries For the first time official CIS survey addressed user innovation Census for enterprises with 250+ employees, simple random sampling for enterprises with 10 to 249 employees Census + sample covered total of 3,163 enterprises Response rate around 70 % -> data from almost 2,200 enterprises User innovation questions were presented only to enterprises engaged in innovation activities (product innovations, process innovations, projects related to

product or process innovations, marketing innovations or organisational innovation)

Mervi Niemi & Jari Kuusisto

7/30/12

During the three years 2008 to 2010, which means and measures did your enterprise use to include customer and user orientation in your enterprise's innovation activities and in the production of your innovative products and how significant the means and measures used were?

Mervi Niemi & Jari Kuusisto

7/30/12

During the three years 2008 to 2010, which means and measures did your enterprise use to include customer and user orientation in your enterprise's innovation activities and in the production of your innovative products and how significant the means and measures used were?

Importance Methods used in involving customers / user into innovation activities, level of customer / user involvement in the development of novel goods and services Users modified existing products, and your enterprise further developed and commercialised it. Users developed a new product and your enterprise further developed and commercialised it.
Very important Somewhat important Not important Not used at all

Utilization and commercialization of products developed or modified by users

Mervi Niemi & Jari Kuusisto

7/30/12

Survey implications
For the first time user innovation is measured in official CIS survey by national statistical agency Statistics make user innovation much more visible and place the topic firmly on the policy-makers agenda New data shows the importance of user innovation in b2b context CIS-survey and questions worked well, but It still gives a conservative estimate of user innovation activities Evaluating real effects of user innovation activities necessitates further research and longitudinal data More countries are encouraged to carry out CIS survey with user innovation questions Cross country comparative analysis is needed and it is important in assessing user innovation activities

Mervi Niemi & Jari Kuusisto

7/30/12

User innovation CIS 2010

Initial results from Finland

MN

7/30/12

Importance of user innovations by firm size (personnel) 2008-2010*

27-30 % of respondents indicate that utilization and commercialization of products modified by users are highly or fairly important for them
(!" '!" &!" ," %!" $!" #!" !" #!)&*" '!)$&*" $'!+" -./01234"5/06780"9:"148.4;" </="65>/.3?@28" -./01234"5/06780"9:"148.4;" 580615"65>/.3?@28" -./01234"5/06780"9:"148.4;" A6BA"65>/.3?@28"

* among firms engaged in innovation activities during 2008-2010

MN 7/30/12 7

Importance of user innovations by firm size (personnel) 2008-2010*

13 % of respondents indicate that utilization and commercialization of new products developed by users are highly or fairly important for them
(!" '!" &!" ," %!" $!" #!" !" #!)&*" '!)$&*" $'!+"
MN 7/30/12 8

-./01234"05657/850"9:"145.4;" 7/<"=>8/.3?@25" -./01234"05657/850"9:"145.4;" >50=1>"=>8/.3?@25" -./01234"05657/850"9:"145.4;" A=BA"=>8/.3?@25"

Novelty of user innovations

User innovations tend to be new to the market innovations

)!" (!" '!" C" &!" %!" $!" #!" !" *+,-./0" *+,-./0" 122,345,267" 122,345,267" ,289"2:;"0,"0<:" 2:;"0,"0<:" =+>" :20:+?+16:@6" >4+A:0" B,"?+,-./0" 122,345,26" *+,-./06">,-1=:-"D9".6:+67" 8,;"1>?,+042/:" *+,-./06">,-1=:-"D9".6:+67" >:-1.>"1>?,+042/:" *+,-./06">,-1=:-"D9".6:+67" <1E<"1>?,+042/:"

)!" (!" '!" &!" %!" $!" #!" !" *+,-./0" *+,-./0" 122,345,267",289"122,345,267"2:;" 2:;"0,"0<:"=+>" 0,"0<:" :20:+?+16:@6" >4+A:0" B,"?+,-./0" 122,345,26" *+,-./06"-:3:8,?:-"C9".6:+67" 8,;"1>?,+042/:" *+,-./06"-:3:8,?:-"C9".6:+67" >:-1.>"1>?,+042/:" *+,-./06"-:3:8,?:-"C9".6:+67" <1D<"1>?,+042/:"

MN

7/30/12

Firms that are active in R&D&I are also making more use of user innovations

(!" '!" &!" %!" $!" #!" !" )**+,-.+*"-/.,0.12" )**+,-.+*"-/.,0.12" @+"0**+,-.+*"-/.,0.12" 314-.*5"6+"73+89/62"-*8" 314-.*5"6+"73+89/62"-*8" 314-.*5"6+"73+89/62"-*8" 73+/12212:"-*8"0*;<+921" 73+/12212:"-*8"*+"0*; 73+/12212:"-*8"*+"0*; =>?" <+921"=>?" <+921"=>?" A3+89/62"81,14+718"BC"92132:"4+D" 0E7+36-*/1" A3+89/62"81,14+718"BC"92132:"E1809E" 0E7+36-*/1" A3+89/62"81,14+718"BC"92132:"<05<" 0E7+36-*/1"

The case of user modified products

MN

7/30/12

10

Comparing user innovation in manufactured goods and services

User innovation is reported slightly more important in manufacturing than in services

User modifications User developed new goods / services
&#" &!" %#"

(!" '!" &!" %!" $!" #!" !" )*+,-*./,01+2" 34051.46" 789:8;" 789749" 789<12<"

%!" $#" $!" #" !" '()*+(,-*./)0" 12.3/,24"

523678" 523925" 523:/0:"

MN

7/30/12

11

CIS results show that user innovation matters

Both small and large enterprises make use of user innovations Around half of innovating firms commercialised user innovations Utilization and commercialization of user innovations was more common in manufacturing than services Involvement of users and utilization of user innovations was most common among enterprises that developed (radical) new to the market product innovations 80 per cent of innovating firms incorporated user information or users in their innovation activity during the survey period Integration of user information and joint development became more common as enterprise size grows Exploitation of user information and joint development were slightly more common among service enterprises than in manufacturing enterprises

Mervi Niemi & Jari Kuusisto 7/30/12 12