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There are trends, and then there are transformations.
In the open innovation space, one regularly leads to the other. Read these three in-depth industry reports to find out the new rules of the collaborative economy, why the United States is leading the way in turning customer feedback into innovative products, and what challenges are soon to crop up in crowdsourcing.
The New Rules of the Collaborative Economy
Never before has it been easier (or more important) for leading brands to take advantage of the collaborative economy. This burgeoning movement reflects a fundamental change in the relationship between businesses and consumers, and an ever-growing population of people who have gone from just customers to hands-on participants in the innovation processes of the brands they support. More than advocates, these 105+ million sharers are inventors, sellers, and product distributors.
From the report:
Sharers gravitate to well-known brands, whether those are traditional companies or trend-setting startups. The best way for companies to build their brand in their collaborative economy is to enable a platform that brings customers closer to the innovation process, and enable makers, crowdfunders, and others to co-innovate with your brand.
MSU STUDY: U.S. Companies Leverage Open Innovation Better than China
Global competition is the driving force behind business innovation, whether between companies vying for market share, or countries fighting for economic prowess. But there’s good news, at least, for companies in the U.S. that are taking innovation initiatives to heart. In a new study from MSU, researchers found that when compared to Chinese firms, U.S. companies are often better at converting customers’ wants and needs into innovative products. From the report:
A company being market-oriented – or how well it identifies and meets the wants and needs of its customer – is the first step toward reaching and satisfying customers. But success depends on the value that a company creates using its market knowledge competence – its ability to innovate.
“Customers will engage only if and when they see the company being innovative, not when a company says it will be innovative.”
The Biggest Challenge to the Future of Crowdsourcing in Business
New approaches to innovation will always face unique challenges. But when it comes to business crowdsourcing, the benefits prove mightier than the risks time and time again.
Professor Karim Lakhani has been investigating crowdsourcing for several years in an effort to understand what it is that motivates people to contribute to open innovation projects. His findings reflect patterns found in the two main crowdsourcing models: contests and communities. From the latest findings:
Throughout his research, Professor Lakhani has found that crowdsourcing projects are completed successfully at a rate approaching 90% — a number most organizations would move heaven and earth to achieve internally. The key is finding the right set of people, making the work meaningful for them, and successfully crafting the incentives so that they will continue to do the work as more projects are submitted.
But correctly crafting a challenge for the crowd isn’t the biggest obstacle for crowd platforms. Instead, their biggest issue is one of supply: being able to host enough challenges to sustain the platform over time. In Professor Lakhani’s opinion, the reason for this constraint is a fundamental discomfort on the part of the sponsor organizations. Working on a “crowd basis,” in the form of modular projects with neatly divided tasks and, perhaps most substantially, without control over who is submitting the work, is so foreign to most organizations that few are actually willing to let the crowd model work for them.