Spending on Innovation Projects

In the household sector, individual projects typically were developed using relatively modest, "person-sized” expenditures. As can be seen in table 2.4, spending by individual innovators on their most recent projects in the six countries averaged from a few hundred dollars to a little

Table 2.2

Scope of product development by household sector users in various innovation categories.

UKa

Japanb

USb

Finlandc

Canadad S. Koreae

Craft and shop tools

23.0%

8.4%

12.3%

20%

22%

16.4%

Sports and hobby

20.0%

7.2%

14.9%

17%

18%

17.9%

Dwelling-related

16.0%

45.8%

25.4%

20%

19%

17.9%

Gardening-related

11.0%

6.0%

4.4%

naf

na

na

Child-related

10.0%

6.0%

6.1%

4%

10%

10.9%

Vehicle-related

8.0%

9.6%

7.0%

11%

10%

6.5%

Pet-related

3.0%

2.4%

7.0%

na

na

na

Medical

2.0%

2.4%

7.9%

7%

8%

5.5%

Computer software

na

na

na

6%

11%

na

Food and clothes

na

na

na

12%

na

na

Other

7.0%

12.0%

14.9%

3%

3%

23.9%

a. Source: von Hippel, de Jong, and Flowers 2012

b. Source: von Hippel, Ogawa, and de Jong 2011

c. Source: de Jong, von Hippel, Gault, Kuusisto, and Raasch 2015

d. Source: de Jong 2013

e. Source: Kim 2015

more than a thousand dollars in time and materials combined. (In these calculations, time was converted to a money equivalent by using the average per-hour wage rate in each nation surveyed.) The range of project expenditures by respondents was wide, varying from almost nothing—projects accomplished very quickly using only materials on hand—to levels much higher than average. Other research on other innovation samples finds that individuals who spent significantly more than average are likely to be lead users—individuals at the leading edge of important market trends having a strong need for their creations. Lead users are also more likely than average users to develop products with potential commercial value (von Hippel 1986; Urban and von Hippel 1988; Franke, von Hippel, and Schreier 2006; Hienerth, von Hippel, and Jensen 2014, table 3).

Table 2.3

Examples of household sector product innovations in various categories.

Craft and shop tools

I created a jig to make arrows. The jig holds the arrow in place and turns at the same time, so I can paint according to my own markings. Jigs available on the market do not rotate.

Sports and hobbies

I developed luminous paduk (go) stones, so that you can play the game in the dark. Compressed glossy material on the surface of the stones looks identical to normal ones, and the feeling is also similar.

Dwelling

related

Due to the weather, I wanted my washing machine to spin only. I modified it by changing the way the timer worked to give a spin-only option. I bridged one of the circuits and inserted a switch.

I used a GPS system that can be operated by computer and small tags to create a mechanism for immediately finding objects that have become lost in the house.

I used a microwave oven to create a half-pressure rice cooker. I drilled holes in a plastic container and used a large rubber band and small board to adjust pressure within the container so that the resulting rice tasted as good as that cooked with other sources of heat.

Gardening

related

I made a device for trimming the tops of trees. It's a fishing rod with a large metal hook at the end. This enables me to reach the top of the trees, bend them down, and cut them.

Child

related

I colored the two halves of a clock dial with different colors, so a child can easily see which side is past the hour and which before the hour. I used it to teach my kids to tell the time.

I created a cloth expansion panel to enable me to fasten my Winter coat while wearing a baby carrier underneath. Helps keep me and my baby warm. Adapts to all my conventional zippers.

Vehicle

related

I installed a display on my car key remote controller for parking location positioning. When unable to remember where I parked in a large parking lot or a parking lot with several floors, it can help save time and the effort in finding my car.

Pet-related

My dog was having trouble eating. I used a flat piece of laminated wood and put an edge around it like a tray to stop her bowl from moving around the kitchen. It is a successful innovation.

Medical

My mother had a stroke and became unable to use her limbs. I created a coat that was easy for her to put on and take off while in a wheelchair. The areas under the sleeves were cut open so that the sleeves could be opened and closed with special tape.

Computer

software

related

I am colorblind. I developed an iPhone camera app that identifies the colors of objects in a scene, and codes them for easy recognition.

Small expenditures on individual projects add up to quite large amounts in aggregate, simply because so many householders innovate. In the case of the United Kingdom, the United States, and Japan surveys, my colleagues and I were able to estimate total annual expenditures on product development in the household sector. In those three countries only, the national surveys included a question asking respondents how many projects they had carried out per year. That information, together with the data we had on the costs of innovators' most recent projects and the total number of innovators in each nation, enabled us to make the calculations.

Table 2.4

Individual expenditures on most recent user innovation project

UK

US

Japan

Finland

Canada

S. Korea

Time spent on most recent project (person-days)

4.8

14.7

7.3

2.6

6.7

5.9

Average materials expenditure on most recent project

?101

$1,065

$397

207€

$58

(Canadian)

$368

Source: von Hippel, Ogawa, and de Jong 2011, table 1. Total expenditures include out-of-pocket expenditures for the specific project plus time investment calculated at average wage rate for each country.

As can be seen in table 2.5, multiple billions of dollars are spent annually by household sector innovators in the United Kingdom, the United States, and Japan in aggregate. Interestingly, as can also be seen in table 2.5, this level of expenditure is not so different from annual expenditures by consumer goods firms on developing products for consumers in those countries (von Hippel, Ogawa, and de Jong 2011). Again, this is an indicator that product development by householders is an activity of substantial scale.

Table 2.5

Total individual innovation expenditures per year on products for own use.

UK

US

Japan

Average number of projects per year

2.7

1.9

2.6

Estimated total expendituresa by consumer innovators on consumer product development per year

$5.2

billion

$20.2

billion

$5.8

billion

Estimated consumer product R&D expenditures funded by producers per yearb

$3.6

billion

$62.0

billion

$43.4

billion

a. Total expenditures include out-of-pocket expenditures for the specific project plus time investment calculated at average wage rate for each nation.

b. Calculated from national input-output tables.

Source: von Hippel, Ogawa and de Jong 2011, table 1.

 
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