The free innovation paradigm
The free innovation paradigm is represented by the broad arrow shown in the top half of figure 1.1. At the left side of the arrow, we see consumers in the household sector spending their unpaid discretionary time developing new products and services. Discretionary time can be seen as "time spent free of obligation and necessity” (OECD 2009, 20), time devoted to activities that "we do not really have to do at all if we do not wish to” (Burda, Hamermesh, and Weil 2007, 1). Scholars have noted the potential value obtainable by producers and society when consumers increase the portion of discretionary time devoted to a range of productive uses (Von Ahn and Dabbish 2008; Shirky 2010). Innovation is clearly among such productive uses, as we will see in detail later.
As is implied by the position of the free innovation arrow in figure 1.1, which starts further to the left than the producer arrow, individuals or groups of innovators who have a personal use for an innovation with a novel function generally begin development work earlier than producers do—they are pioneers. This is because the extent of general demand for really novel products and services is initially often quite unclear. General demand is irrelevant to individual free innovators, who care only about their own needs and other forms of private selfreward that they understand firsthand. Producers, in contrast, care greatly about the extent and nature of potential markets and, as the rightward positioning of the producer arrow indicates, often wait for market information to emerge before beginning their own development efforts (Baldwin, Hienerth, and von Hippel 2006).
If there is interest in an innovation beyond the initial developer, some or many other individuals may contribute improvements to the initial design, as is shown at the center of the free innovation paradigm arrow. This pattern is visible in the Nightscout example presented earlier and is familiar in open source software development projects as well (Raymond 1999). Thus, in the Nightscout case, many individuals with an interest in helping children with Type 1 diabetes came forward to join the efforts of the project's initiators (Nightscout project 2016).
Finally, free diffusion of unprotected design information via peer-to- peer transfer to free riders may occur, as is shown at the right end of the free innovation paradigm arrow. (Free riders are those who benefit from an innovation but do not contribute to developing it. In that sense they get a "free ride.”) Again, a pattern of diffusion to free riders is clearly visible in the Nightscout project.
Note that what is generally being revealed free for the taking by free innovators is design information, not free copies of physical products. In the case of products or services that themselves consist of information, such as software, a design for an innovation can be identical to the usable product itself. In the case of a physical product, such as a wrench or a car, what is being revealed is a design "recipe” that must be converted into a physical form before it can be used. In free peer-to-peer diffusion, this conversion is generally done by individual adopters—each adopter creates a physical implementation of a free design at private expense in order to use it. However, this is not a firm rule. Sometimes free innovators, motivated by altruism or other forms of self-reward, do create free physical copies of free designs to give to free riders. As an example, consider the worldwide e-Nable network. Founders of this network developed open source designs for inexpensive, 3D-printed artificial hands for children and adults who lack hands. Network members who own 3D printers donate their time to tailor the freely available hand designs to individual needs, and also donate the use of their personal printers to produce copies for free (Owen 2015).