RENEWING AND NEW TYPES OF INNOVATION

Th is article assesses eff orts to develop “open innovation”. First, open innovation is put in the framework of knowledge society. It is shown that the term open innovation refers to such diff erent cases that it is better to assess them separately. Chesbrough’s “open innovation”, the “lead user” conception, the idea of “commons-based-peerproduction” and “interactive value pro duction” is shortly explored. “Incertitude” is overviewed as ba sic background that urges societal praxis to turn to open innova tion. At the end the article, referring to an expert material worked out for the EC DG Research, called with abbreviation TEKSS, turns interest to extending open innovation by integrating con cerned groups as innovation partners as engagement, i.e. as partners through the whole innovation process.

Technological innovation becomes perhaps the very central strategic factor for economic development in knowledge society.From the economic point of view, to renew technological innovation capability (say by utilizing synergies from converging technological development) becomes central to the worldwide competition for competitiveness.Th ere is a worldwide competition in fi nding new organizational forms, types of innovation too.Inventing new forms of innovation are central to this competition for competitiveness on the second level.Th is "innovation in innovation", "reinventing innovation" is the topic of our recent presentation, from the perspectives of corporate economics, including organization sociology and of socio-politics.
We enumerate several factors in knowledge society that are especially important in this context: 1. Th ere is a rapid change in the weight of service embodied, rendered possibly by new products with the turn of economy towards "service econ omy".2. Th ere is a progressing individualization (partly customization) of products.3. Production becomes knowledge mediated on qualitatively higher level in a self-reinforcing dynamic than in mass production and products be come knowledge-rich.With this, there is a shift in the role of the human agent among the production factors and a shift from the importance of the knowl edge pool to the (refl exive) learning, innovation capability.4. Knowledge is distributed and the worldwide distributed knowledge is potentially incomparably richer knowledge resource than the knowledge-pool inside the fi rm.Hence, in its tendency, knowledge and innovation capability outside the fi rm is becoming the main resource for innovation.
5. Innovation is made in a world of radical uncertainty and turbulence.So it is increasingly impossible to know in advance what sort of knowledge, where will be needed in the dynamics of the innovation process and who will be able to really contribute to innovation.Hence the importance of fl exible networking in an open space for innovation aims grows in an accelerated way.6. Th ere is a decisive challenge in developing clever relation to future, actually to the open structure of any future in a radical information uncertainty and turbulent environment.Th is means that to be able to be successful, refl ex ive, adaptive, and anticipatory, the structuration is needed in order to realize co-evolutionary relation to the actors' radically uncertain and turbulent envi ronment.In terms of cognitive tools that turn can be expressed as a decisive turn from prognostic eff orts to foresight-based road-mapping.7. Th ere is an emerging turn from producer dominated innovation inside the fi rms to open it to innovation in networks and further new forms as an an swer to the challenge to meet the distributed knowledge potential and the growing consumer awareness and power under conditions of turbulence and uncertainty.8. To raise fi rms' adaptive accommodation there is a shift to integrate fl exible organizational forms into the working of fi rms like projecttype or ganization within the fi rms and with the innovation system there is a shift in the weight of SMEs in realizing innovation.9.A user (whether a fi rm, organization, a group, a community or individuals) is becoming essential value producer as co-producer of innovation.
Th ese phenomena indicate the growing complexity of the societal and economic dynamic.Th is may lead to one sort of defi nition of globalization.Globalization, from this respect, realizes a "densely interactive" systems dy namic through co-evolution of its constituents.

Chesbrough on open innovation
It is worthwhile to begin this overview of some emerging new types of innovation with Chesbrough's fi rst very successful and most popular book on "open innovation". 1 Starting point for Chesbrough was the stylized fact of "closed innovation".Th is is the "fact" that industry based on mass production concentrated innovation to the R&D labs of big fi rms.Each big fi rm realized solutions for its innovation needs by its own research lab.Innovation got institutionalized into the hierarchical mechanism of the fi rm.Innovation competition was ex pected to win by extending the R&D capacities within the fi rm.Th e preserva tion of this autonomous working was identifi ed as the criteria of the success.Extended intellectual property right (IPR) institution provided for securing this autonomous functioning.
Chesbrough shows how this mechanism got challenged toward the end of the 20th century and gave place to an open innovation.Chesbrough points to two diff erent issues.Th e fi rst is that we call the systematic and unavoidable production of early evolutionary variants in any innovation process, the pro duction of evolutionary excess.It "opened" the "closed" type of innovation through release of excess ideas for the utilization of them outside the (mother) fi rm.Th is way the evolutionary excess turns from loss into economic gain.
Th e second issue is the opening of the walls of the fi rm for utilization of the innovation potential outside, by stepping in connection with other fi rms.Th is makes part of the networking tendencies among fi rms.As experience quickly showed, relying on exploitation of outer innovation potential became decisive advantage in diff erent sectors of industry because it grew the effi ciency so much.Working of this innovation commerce is based on securing IPR.Utilization of the innovation potential outside has 1 Henry CHESBROUGH, Open Innovation.Boston, MA: Harward Business School Press 2000.
Imre Hronszky, Ágnes Fésüs a necessary restructur ing eff ect on the working of the R&D lab inside the fi rm.Th e most important is that the lab got an innovation brokering function, that connects the fi rms outside and its (mother)fi rm.
As Chesbrough concludes, this opening has been leading to constructing a worldwide market for innovations.Th is process led to stable innovation networks among fi rms.With Reichwald and Piller we can say that this type of cooperation in networks subsumed cooperation as a tool and a technique to making the fi rm's individual way to raise eff ectiveness and effi ciency of "manufacturer dominated" innovation. 2 With this two obviously very diff erent cases we feel necessary to put the question already if the new term open innovation is not more than a collector term, based on the common indicator that every case gathered and subsumed under that term has the common feature that it is diff erent from the "closed" type of innovation but not much more in common.Th at means, in case we do not want to get trapped in an approach to an open innovation that will mostly lead to unsubstantial generalizations only, there is a very impor tant preliminary methodological work fi rst to clearly make the needed diff er entiations among those forms of innovation that are usually referred to by lit erature as cases for "open innovation".Th is would need to develop several systems of characteristics that we are unable to realize it in this presentation.But we enumerated and diff erentiated already intuitively between two types of open innovation.Th ese are, fi rst, utilizing evolutionary excess, and second, engaging in looking for outer innovation resources for the mother fi rm.We shall continue this enumeration by pointing to a further open innovation type realized by user/consumer integration into the innovation dynamic.
On "lead users"3 Perhaps uniquely important pioneer researcher of this phenome non was von Hippel.According to von Hippel, "lead users" are those users who are being ahead of the majority of users in their population with respect to an important market trend and expect whatever sort of high benefi t from some sort of innovation. 4 Th is is a useful defi nition but we think it should be modifi ed in respect to requirements of a (more consequent) evolutionary per spective.It seems the role of variation production and selection is valid for the working of "lead users", too.Seen this way, lead users realize the potential able to initiate something that may crystallize into a new trend.So, many lead users won't be followed by masses to realize some virtuous circle as a trend, they will fail.Th en, lead users are special agents having a specifi c role in ini tiation of new trends that may be more complicated than it is shown by von Hippel.New dominant populations may really emerge in close relation to some of them realizing an exemplar and paradigm bounded relation by the fol lowers but we think that masses typically realize something diff erent from the lead users' perspective.Typically, they do not simply realize the same extreme needs.Instead, they add their variants to the story.Th ey mostly change ex treme models into forms that may serve for establishing trends while the pio neering models may not.Nevertheless, they may systematically realize inno vative integration of users with the producers.Von Hippel seems to have envisioned a division of users into an active and a passive group and too much copying relation in his model of user integration.
It seems that some basic stylized, general observation is valid.According to this wide masses of users-both fi rms and individual consumers-are able to innovate for their own needs.Based on diff erent examples where customers participate quite naturally in innovation it is possible that coopera tion may become typical in the diff erent "sequences" of innovation that not only include involvement in design but perhaps even making new product ideas too.Many new types of informal and formal cooperation and new types of fi rms emerge that specialize on utilizing innovative ideas of possible customers.
Th ere is an "information asymmetry" between producers and us ers.Explanation for the rapidly growing user involvement into product and service innovation has to give an account of the economic, more widely the societal reasons that make worthwhile to solve the "information asymmetry" challenge for the agents, the users and the producers by user involvement in innovation.Th e "information asymmetry" challenge is to be seen together with the problem of "stickiness" of the sorts of information users may have.("Stickiness" comes partly from the "tacitness" of the knowledge needed for innovation.)Overcoming this information asymmetry and stickiness by user involvement may lead to classical eff ects in terms of raising cost effi ciency for the fi rms but fi rst of all to new eff ects in terms of effi cacy, i.e. enhanced ap propriateness of products for (individualized) users.Von Hippel demonstrates: a new type of division of labour is emerging.Th is is based in partitioning into need-information-intensive and solution-information-intensive subtasks. 5As Reichwald and Piller explicate the user integration, even possible dominance by users seems especially important in the innovation phase while dominance of producers remains for the production phase.With this integration, a new mechanism of the working of industry and a new business model is needed. 6sers have been developing innovation communities in the cases inves tigated.Th ese innovation communities may unify users as well as institution alize user-producer interactions.Th ese communities give an informal institu tional background to the new form of innovation.Access to innovations may occur through the "free revealing" by the innovators, providing for a new commons this way.Von Hippel recognizes that users' ability to innovate is improving radically and rapidly.Th e explanation he gives refers to technicali ties: rapidly improving quality of computer soft ware and hardware, improved access to easy-to-use tools, access to innovation commons that continuously get richer.We think that the quickly developing, accelerating, diversifying collective learning process through emerging user and innovation communi ties has the same explanatory importance.Concerning the assessment of this recent learning process it is to take into account that user integration does not proceed in vacuum but in an arena where ideology of the necessarily passive user (contrasted to the expert producer), legacy of a diff erent division of la bour, legal and political regulations non-favorable for user integration domi nate.Nevertheless, old, established big fi rms frequently give way to user inte gration into the product innovation and brand new fi rms make quick career by specializing in serving for user initiated innovations.According to von Hippel there are diff erent possibilities for producers in supporting user innovations: 1. Manufacturers can realize the production of user-developed innovations for general commercial scale.2. Manufacturers can develop and sell kits of product-design tools useful for user innovators and/or can provide for "product platforms" to ease us ers' innovations.3. Manufacturers can develop and sell complementary products or services to user-developed innovations.7 Von Hippel gives the somewhat bombastic name "democratiza tion of innovation" to the emerging process.It is to be seen that the "democratization" of the innovation process von Hippel speaks of is a rapidly growing, scarcely known but more and more needed economic potential.It is "democra tization" because, this way, "consumers get what they really need according to their individualized needs."8Further, consumer integration into the innovation process rebalances the earlier one sided producer dominance.New organiza tional forms, innovation communities realized by integration of producers and consumers provide for a sustained dialogue of equals.Von Hippel claims that democratization occurs because mass availability is the tendency concerning ICT tools and this easy availability will mobilize capabilities in masses.Inno vation will be, he thinks, also easier because competent use of ICT, that is needed, will require less and less skill and training.We have to confront this claim with actual experiences that the needed eff orts to make people skilled in competent use of new ICT generations show a diff erent tendency.It should be a conscious task to turn this tendency.

Commons-based-peer-production, interactive value creation
Let us shortly comment on the creation of new commons by "free revealing".While networked production by fi rms is some sort of market and intellectual property right (IPR) based on a new innovation mode, open source soft ware utilization may be made this way as well as in a diff erent way, by "free revealing".Th e diff erence in legal regulation refers to what is called "commons-based-peer-production". 9 We can recognize a quickly growing process in which "commons-based-peer-production" gets importance in the economy."Commons-based-peer-production" is the utilization of a special sort of cooperation by joining a dynamic community committed to use value production without the mediating role of market relations among the members.It leads to a common knowledgebase and a cooperative working form for its members.ICT potential serves as essential enabling technology to its devel opment.Engaged in this sort of cooperation one can freely use the commons as resource but commits itself to simultaneously make free his own modifi ca tions for the commons, contributing this way to enriching of the commons.Th is specifi city is reinforced by its "irregular", informal "legal" regulation.Instead of realization of informal collective property rights (IPR), creation of some General Public License (GPL or copy-left ) is expected to regulate inven tive cooperation.Economic advantage may be coming from the sinking "information opportunity costs", the advantage to fi nd the best person in a (per haps world-wide) sample or from scale-eff ects by specialization.It may also come from a special type of labour realized by it."Commons-basedpeer-production" may provide for the decisive advantage for innovative thinking and cooperation among the agents who realize it.Because it unifi es collabora tors that freely join the community it may be advantageous for creative prob lem handlings that start with "problem-posing" (we consciously use the term introduced by the radical educator Paulo Freire) and do not necessarily start from problems given.If "commons-basedpeer-production" realizes a coop eration of agents having rather diff erent knowledge bases then fi nding radical reformulations of problems or radical solutions to them may become more probable.
For the classical tenet on the essential outer regulation of the in teraction of selfi sh agents, "commons-based-peer-production" seems para doxical in terms of organization, both the motivation and coordination forms, in its informal legal regulation of the access to the knowledge base and in a number of further points.Benkler especially emphasizes the advantage of freedom in problem identifi cation and problem solution as a motivating factor.Among diff erent motivation eff orts are furthermore the possibility to fi nd best solutions for the agents' individual needs, the satisfaction that the joining a creative community may bring with itself, the freedom of entering and leav ing a community. 10One "paradox" of "commons-based-peer-production" is its readiness for "freely-revealing".As von Hippel assesses, this may be the best for the innovator, or the only available option in an inimical, on individual possession based competitive environment.Beside these motivations, that ex press instrumental rationality, the most important motivation may be the con sciousness of joining a free self-organizing community.Another "paradox" with the "commons-based-peerproduction" is that this organization form seems, for the classical observer, somewhat or even very much chaotic".Un derstanding of the advantages of this "somewhat anarchistic" way of organiza tion is to fi nd through the self-organization perspective, how this type of or ganization may work as a refl exively realized unifi cation of variation and selection production that results both in fl exibility and robustness.Th ere are some essential preconditions for the working of commons-based-peer-production".Th ese are, as Reischwald and Piller enumerate, appropriate num ber of actors, modularity, granularity, low transaction costs. 11learly, we are witnessing a radically new form of organization of innovative activities here.It is but natural that some authors express a great enthusiasm for the economic possibilities of "commons-based-peerproduction" and add great socio-political expectations to it, too.Th ey concen trate on the promises.In this respect it is likely that "commonsbased-peer-production" will go through several expectation cycles.It is evident that "commons-based-peer-production" has its, at least recently, economic limits and weaknesses.Th ey reside partly in its own construction specifi cities, partly in the friction problems with the market-based, dominant economic environ ment.One of these friction problems is the possible enduring undersupply of the production mode in time.Th at means that there is always a possibility that some only take out of but do not feed back into the commons and provide with this a vicious circle.It seems that an accompanying SWOT assessment may help to make more balanced assessment even when expectation cycles are im possible to fully put an end because they have their essential function.
According to recent estimations, "commons-based-peer-production" seems to have the potential to complement the recent, dominant modes of innovation.It is unable to supersede them but forms of coexistence multiply.Th is has organizational science and corporate economics reasons.But "commons-based-peer-production" as new form of innovation based on enabling ICT basis is still just emerging.It is quite rational to anticipate that it may bring numerous surprises in its further development.
Reichwald and Piller introduce the term "interactive value creation" (In teraktive Wertschöpfung) through value-creation partnership for this new type of innovation.In contrast to mass production based on stability of the "solu tion space" value-creation partnership is partnership for opening the "solution space". 12ome words seem unavoidable on ICT and WEB as enabling technology and their relation to "open source" innovation.ICT and WEB can give technological basis, provide for tools and medium for diff erent sorts of innovative communities.Th ere is interaction between the technological basis and the type of innovation to realize on that basis."Commonsbased-peer-production" overlaps very strongly with "open source innovation".Recently Web 2.0 (the term coined by Tim O'Reilly in 2004) refers to a second genera tion of web-based communities and hosted services aiming to facilitate col laboration and sharing between users.It focuses on end-users considering them as co-developers in a process characterized by open communication and decentralization of authority leading to the understanding of the web as par ticipation platform, the "participatory Web".

What sort of uncertainty do we face in the emerging societal and eco nomic dynamics?
Th ere is a clear historical shift and multiplication of innovation forms.Th is shift and multiplication is essentially to be seen as an experimental answer to the new uncertainty that surrounds innovation in the emerging world of "dense interaction", of complexity.Th ere is a challenge for understanding and action in this emerging world in terms of (self)refl exivity.Th is means that the accomplished question entails a double feed-back and is curiosity about what the human agent intends to be in a "densely interacting", complex dynamic of which himself is a part of.(Th ere are diff erent types of uncer tainty, see below please.Th eoretically all of them have an essential role for decisions.Th ey were recognized by some economists nearly a century ago.Th ey "only" work in the recent economy incomparably stronger.When they were identifi ed a century ago they were not refl exively framed.Th is way they seemed to be problems in the outer world surrounding us, problems to answer by the homo economicus.)It is worthwhile to give a short overview of this multitude of uncertainties.One can say that the so called "quadrate of sui cide", where we have simultaneous uncertainty of technological and economic requirements for new products or services becomes many dimensional by in cluding uncertainty of the social, cultural, legal dimensions and the interaction of all of them.(NB! Th is overall uncertainty caused "dense interaction" and the changing self-refl ection of the human agent is simultaneously potential for value creation and destruction.)Environmentalist Andy Stirling summarizes the new uncertainty situation as follows: 13 instead of well calculable risks, in the new historical situation, one is typically confronted with "incertitude"."Incertitude" is a summarizing name for calculable risk, unknown, incalcula ble probability of possible events, of ambiguity and ignorance together.Am biguity means that we identify the possible coming events in contradictory ways by diff erent observers.It is less the problem of uncertainty about the fu ture existence of these events but much more the eff ect of "contradictory cer tainty" that makes the essence of democratic societies, based on essential value-plurality.Ignorance (possibility of eff ects of which I do not know that I do not know), that was identifi ed a category relevant for economy already nearly a century ago becomes unavoidable under conditions of "dense interac tion".It leads to "genuine, non-predictable surprises".Emergence and quick recent development of research tools such as "horizon scanning" show that the importance of scanning ignorance is becoming conscious."Incertitude" in real situations typically may be some combination of these ideal-typical cases.See them in graphic representation below: Complexity, non-linearity has been becoming essential, enduring factors.Th e multiplicity of uncertainty problems, the full content of "incertitude" is be coming the typical case.Adaptive accommodation, developing co-evolutionary relation to the evolutionary nature of the dynamics of which we are a part of is the challenge that only leaves place for the prognosis, planning and control mechanism in more exceptional cases.Networking is becoming essential but mostly for providing for new, earlier non-expected innovation possibilities.Flexible networking as basic organization form gets weight in an accelerated manner to provide for systematically opening space for "genuine surprises" to realize them as innovations.Experimenting with systematically opening space for processes and results that realize in the fi eld of non-calculable probability and of ignorance become typical actions.It is to expect that these experiments systematically become critical topics for assessments from diff erent value perspectives.Th is latest means that these new phenom ena, including such sorts of innovations will be systematically becoming ob jects of critical refl ection from many types of value commitments, say in reli gious terms or generational diff erences.It is most important to mention that precaution gets its necessary place with these experimentations.

New types of innovation and socio-political expectations
New innovation forms redistribute agency and knowledge.From the sociopolitical perspective they redistribute power too.By narrowing in terest to the economic perspective a "boundary work" is made that way that sociopolitical characteristics of the "economic" phenomena won't be taken into account.Now we go back to these characteristics.It is important to do this for understanding the possible connections to, implications on new innovation forms and the socio-political dimension of the complex, economic and societal dynamics.
As we saw, von Hippel calls the dynamics "democratization of innovation".What does this have in common with some sort of political de mocracy?Th e answer seems rather simple.Doing innovation in a "democra tized" form has similar "logic", structure as the participative political democ racy.Th is structure is constructing and reinforcing a participative dialogue as the medium for living together.Th is may seem rather unimportant for "purely" economic considerations.But working in diff erent sectors of society based on the same logic can and will mutually reinforce each other in the measure of growing density of interaction.Th is is the background behind such recognitions and guesses that formulate correlation between political practices, such as the more participative democracy in some Nordic countries and their innovation potential.Th ese recognitions belong to the topic of innovation sys tems if they are widely taken, together with the whole social milieu that serves for embedding for economy.

Interactive value-production with concerned people
"Open innovation" considerations mostly have a special focus.Th ey look fi rst of all for new ways to accelerate the innovation process."Commonsbased-peer-production" approaches may be conscientious about looking for new directions for the innovation process, satisfaction with the working and the use value aimed at are on the highest place.What about the possible role of "concerned people"?(Environmentalists are a case for "con cernedness".)Innovation in the industrial society typically followed the so called "two-track" way.Producers innovated and innovations were attacked by "concerned" people.Constructive technology assessment in Th e Nether lands and Denmark showed in a pioneering way how important and fruitful is to realize systematic co-operation between innovators and their critics in inter est of a sustainable development.Systematic inclusion of "concerned people" in innovation already from idea generation makes innovation socially robust.Trusted by the DG Research of the EC an expert group recently wrote an im portant manifesto on turning to a Regime of Collective Experimentation. 14reativity was subsumed under discipline in the historical period of dominance of mass production mechanism.Th e non-equilibrium character istic of Innovation society may enforce ongoing strive for innovation that needs ongoing eff orts on liberating creativity and develop-ing that sort of dis cipline that can appropriately serve for this.It seems recognition of this need is much behind the challenge the pressure of the globalizing dynamic already realizes.Th is is unfortunately especially true with the still typical education with its concentration on acquiring a "big bulk of reliable knowledge" learned in a disciplined way through ramming in techniques that mostly prepares to life as if we still lived in society of mass production.

Summary
Th e article enumerates some decisive features of knowledge society and assesses eff orts to develop an "open innovation".First it argues that the term open innovation does refer to such diff erent cases that it is better to assess them separately.It assesses Chesbrough's cases for open innovation, the "lead user" conception and uncovers some of its weaknesses.Further it assesses the "commons-based-peer-production".It argues that the tasks to develop new types of innovation is to be assessed by relating this task to the "incertitude" that becomes manifest in societal praxis.It closes by referring to the recent material of an expert group on Taking Knowledge Society Seriously that sug gest "reinventing" innovation by integrating "concerned groups" as innovation partners.

Imre Hronszky is professor at the Department of Innovation Studies and
History of Technology at Budapest University of Technology and Economics.He teaches on various topics concerning philosophy and history of science, technology politics and policy, technology assessment and forecasting.Among his many international engagements, he was guest professor at the Department of Philosophy at University of Karlsruhe and at University of Oviedo.
Imre Hronszky, Ágnes Fésüs Starting point may be, in ideal typical, stylized terms, the dominance of stable, gradually and relatively slowly changing relations.Producers know what users need (cum grano salis: users' needs have always been somewhat sticky info and typically they co-evolve with their possible solution) and know what and how to produce to meet needs in large market segments ("economy of scale and scope").Quantitative risk calculation may be satisfying for prac tical purposes.Processes with unknown probability, emergence of unexpected events, especially ignorance may be typically omitted from rationally account ing for the uncertainty.(As examples for exception one has to think of sudden, unexpected bankruptcies or incalculable natural disasters.)When exceptions occurred, it was reasonable to expect the return to long, non-disturbed dy namic.Prognosis, planning and control worked quite well and corrections on them could be appropriately made on them."A few sizes fi t all" strategy could be followed.Radical innovations were rather rare in comparison to the recent dynamic.