Non-market solutions

There are ways to work within the framework of the free innovation paradigm to increase the amount of diffusion of generally valuable free innovations. Two general approaches are: increase the strength of selfrewards that increase with diffusion, and/or lower the costs of creating and diffusing generally valuable innovations.

Interventions to increase self-rewards associated with diffusion generally alleviate all three manifestations of the diffusion market failure that are present in the free innovation paradigm today. This is because interest in creating a generally useful product is likely to be linked with interest in designing it well, and also in promoting widespread diffusion.

How can free innovators' self-rewards for investment in diffusion be increased? "Gamification” is one generally useful approach. It is known that games played without any practical output being obtained, like solitaire, are self-motivating activities (Fullerton 2008; Schell 2008; Gee 2003). Practical methods to manipulate and enhance such self-rewards are called gamification (Zicherman and Cunningham 2011).

Gamification strategies used to promote diffusion will vary by motive type. For example, one might increase levels of altruism-related selfrewards experienced by free innovators by providing them with better information on the number of adopters who would benefit by their investment in diffusion. An example of this strategy is the non-profit site Patient-Innovation.com (2016), which, among other activities, is working on collecting data on the most important needs of underserved medical patients with rare diseases (Oliveira, Zejnilovic, Canhao, and von Hippel 2015). The goal of the site's managers is to guide engineering classes and others seeking to contribute to projects valuable to these medical patients towards especially impactful opportunities. For free innovators motivated by reputation-related self-rewards, different gam- ification strategies would be useful. One might, for example, increase the likelihood of reputational gains for these individuals by publicly posting information about the admirable investments they have made to diffuse socially important free innovations.

With respect to lowering the costs of free innovation and diffusion, many specific costs seem reducible in many specific ways. For example, free innovators' costs of access to design and production tools can be reduced by support for "makerspace" communities, where access to costly tools is shared, and so rendered less expensive for individuals (Svensson and Hartmann 2016). Increased emphasis on open standards for design tools can lower the costs of acquiring and learning these tools, and also lower the cost of sharing design information created on a range of tools. Open sites for posting digital designs and design information can lessen the costs of diffusion for many—and so forth.

Diffusion of free innovations can also be increased by emphasizing support for collaborative free innovation projects over those carried out by single innovators. Available evidence shows that collaboratively developed designs diffuse much more frequently than designs created by single individuals. Thus, Ogawa and Pongtanalert (2013), who studied Japanese household sector product developers, found a rate of adoption by peers of 48.5 percent when the developers belonged to collaborative communities. When the developers did not belong to such communities, the adoption rate was sharply lower at 13.3 percent. Similarly, de Jong (2013) found, in a study of Canadian household sector innovators, that for collaborative projects the probability of peer-to-peer diffusion and adoption was 38 percent, whereas for singleinnovator projects it was 20 percent.

I think there are two likely reasons for this effect. First, the needs addressed by collaborative projects are likely to be more general—after all, at least several collaborators are interested. Second, the information available to free adopters from collaborative innovation projects is likely to be much richer than that from single innovator projects. This is because participants in a collaborative project must document their activities to coordinate their work, something that single innovators need not do. This richer information, created for internal project use, can then costlessly spill over to the benefit of free adopters.

 
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