Democratizing Innovation
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Users are unique in that they alone benefit directly from innovations. All others (here lumped under the term "manufacturers") must sell innovation-related products or services to users, indirectly or directly, in order to profit from innovations.
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users generally have a more accurate and more detailed model of their needs than manufacturers have, while manufacturers have a better model of the solution approach in which they specialize
Jeff
Good summary of the user/manufacturer split
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When information is sticky, innovators tend to rely largely on information they already have in stock. One consequence of the information asymmetry between users and manufacturers is that users tend to develop innovations that are functionally novel, requiring a great deal of user-need information and use-context information for their development. In contrast, manufacturers tend to develop innovations that are improvements on well-known needs and that require a rich understanding of solution information for their development. For example, firms that use inventory-management systems, such as ...more
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free revealing of product innovations has a history that began long before the advent of open source software. Allen, in his 1983 study of the eighteenth-century iron industry, was probably the first to consider the phenomon systematically.
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a product that a user-innovator develops and freely reveals might be perfectly suited to that user-innovator's requirements but less well suited to the requirements of free riders.