The Broad Scope of Free Innovation (Chapter 8)

In chapter 8, I document that free innovation extends well beyond product innovation—the type of innovation focused upon by almost all studies of household sector innovation to date. I do this by reviewing field-specific empirical studies by a number of colleagues that find significant levels of free innovation are present in services, processes, marketing methods, and new organizational methods.

The broad scope of free innovation development should not be a surprise. After all, the test for whether innovation opportunities are viable for free innovators has nothing to do with the specific nature of those opportunities. All that is required for opportunity viability is that free innovators' expected benefits exceed their costs.

Personality Traits of Successful Free Innovators (Chapter 9)

Nationally representative surveys find that from 1.5 percent to 6.1 percent of members of the household sector in six countries engage in product innovation. That is a lot of people: tens of millions. At the same time, it also means that at least 94 percent of householders are not engaging in product development. Since household sector innovation increases social welfare, and also generally increases producers' profits, it becomes useful to inquire about differences between householders who successfully innovate and those who do not. To that end, Stock, von Hippel, and Gillert (2016) explore personality traits significantly associated with successful household sector innovation at each of three major innovation process stages: having an idea for a new product or product improvement, developing a prototype implementing the idea, and diffusing the innovation to others. My colleagues and I find that successful completion of each successive innovation process stage is importantly affected by different factors. Building upon that information, we propose ways to increase innovation success rates in the household sector.