The velocity of creative consumer activity, producer stances and the intellectual property landscape

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  • 2. INTRODUCTION • Why do we need to rethink strategies when the consumer creates the value? – The innovation landscape has changed • Who should do the rethinking? – Creative consumers? – Policy makers/legislators? – Firms/producers? • Draws upon and adds to work by McCarthy et al (2010), Berthon et al (2007), Fisher (2014), Fauchart & Hippel (2008) and Strandburg (2008) • I am not a law scholar or a law professional. • Legal and innovation context is US centric
  • 3. INDUSTRY DYNAMICS: VELOCITY • Speed is central to industry change (dynamism) and performance. • High velocity industries (environments): – “those in which there is a rapid and discontinuous change in demand, competitors, technology and/or regulation” (Bourgeois and Eisenhardt 1988: 816) – “market boundaries are blurred, successful business models are unclear, and market players (i.e. buyers, suppliers, competitors, complementers) are ambiguous and shifting”. (Eisenhardt and Martin 2000: 1111) • Velocity is the rate (speed) and direction of change
  • 4. PRODUCT VELOCITY 2005 2010 Continuous and 6 new models Discontinuous 4 From: McCarthy I. P., Lawrence T. B., Wixted B., & Gordon B. R. 2010. A multidimensional conceptualization of environmental velocity. Academy of Management Review, 35(4): 604-626
  • 5. REGULATORY VELOCITY August 9, 2001 Discontinuous: Increased to over 1000 lines Mar 9, 2009 Discontinuous: Restricted to 21 lines From: McCarthy I. P., Lawrence T. B., Wixted B., & Gordon B. R. 2010. A multidimensional conceptualization of environmental velocity. Academy of Management Review, 35(4): 604-626 5
  • 6. VELOCITY FRAMEWORK Discontinuous The velocity of: (i) creative consumer activity, Direction of Change (ii) producer stances (iii) intellectual property landscape Continuous Low 6 Rate of Change High
  • 7. USER INNOVATION AND CREATIVE CONSUMERS • User innovators are “individuals or firms that create novel things to use, rather than wait for manufacturers to identify, create, and deliver these things to satisfy the need or desired use” (Hippel, 2007). • I am focused on: – Individuals, not firms. – individuals who modify existing products, as opposed to those who design completely new products • These individuals are called ‘creative consumers’ (Berthon et al 2007)
  • 8. DAVE HURBAN – BODY MODIFIER Click to watch video
  • 9. THE LASSI WASHING MACHINE Click to watch video
  • 10. CREATIVE CONSUMER ACTIVITY (CCA) Torrance & von Hippel 2013 Rate of change = high Direction of change = continuous
  • 11. PRODUCER RESPONSES (PR) Berthon et al 2007 Active RESIST Actively restrain the innovation e.g., block all, integration ENABLE Actively facilitate the innovation DISCOURAGE Defacto ignore or tolerate the innovation e.g., acquiesce ENCOURAGE Happy to allow but don’t help the innovation Producer action to CC innovation Passive -ve 11 Firms attitude to CC innovation +ve Berthon P. R., Pitt, L. F., McCarthy I. P., & Kates S. M. 2007. When Customers Get Clever: Managerial Approaches to Dealing with Creative Consumers, Business Horizons, 50(1): 39-47
  • 12. PRODUCER RESPONSES (PR) Block all, block some, block none (Fisher 2014) Block all by restricting Block all by integration
  • 13. PRODUCER REPONSES (PS) Block some: do no harm Click to watch video Block none: acquiesce Click to watch video
  • 14. PRODUCER REPONSES (PS) Block none: appropriate Block none: competitions and tool kits Rate of change = high Direction of change = discontinuous
  • 15. THE LEGAL LANDSCAPE • Producers – Copyright, patent protection and trademarks. – Digital Millennium Copyright Act (DMCA) – Forces: compensation, labour-desert theory and personality theory (Strandburg 2008) • Creative consumers – Fair use doctrine – First Amendment for freedom of expression – Forces: market failures, distributive justice, human flourishing (Strandburg 2008) – Norms-based IP systems (Fauchart and von Hippel 2008) Rate of change = low Direction of change = continuous
  • 16. Stances of producers Discontinuous Continuous Direction of change VELOCITY REGIME A conflicted velocity regime: “diverse, coupled and contradictory velocities” McCarthy et al (2010) Normsbased IP systems Legal landscape Low Creative consumer activity High Rate of change
  • 17. CONCLUSIONS • Conflicted velocity regimes present costs to society: – Misfit costs – Costs of delays and missed opportunities • IP Response should consider different innovation contexts: cultural innovations vs. artifact innovations; medical innovations • Norms based IP systems. • A lot of creative consumer activity is hidden and more protected than is assumed.