The Journal of Technology Transfer

, Volume 30, Issue 1, pp 73–87

Welfare Implications of User Innovation

  • Joachim Henkel
  • Eric von Hippel

DOI: 10.1007/s10961-004-4359-6

Cite this article as:
Henkel, J. & Hippel, E.. The Journal of Technology Transfer (2004) 30: 73. doi:10.1007/s10961-004-4359-6


Innovation by users is now understood to be an important part of innovative activity in the economy. In this paper we explore the implications of adding innovation by users to existing models of social welfare that currently assume innovation by manufacturers only. We find this addition removes several inefficiencies, and that social welfare is likely to be increased by the presence of user innovation. Implications for policies that can impact users' freedom to innovate are discussed.

user innovation product diversity social welfare inefficiencies 

Copyright information

© Springer Science+Business Media, Inc. 2004

Authors and Affiliations

  • Joachim Henkel
    • 1
  • Eric von Hippel
    • 2
  1. 1.Institute for Innovation Research, Technology Management and EntrepreneurshipUniversity of MunichMunichGermany
  2. 2.MIT Sloan School of ManagentCambridgeUSA