Innovation through consumerism

The video below is from a talk that Charles Leadbeater gave at a TED conference.
Running Time: 20 minutes
Source: Charles Leadbeater: The rise of the amateur professional

In this video, Charles Leadbeater talks about the rise of "pro-ams" or passionate amateurs who act like professionals, making breakthrough innovation in many fields from software development through to astronomy.
The main issues highlighted are:

1. New creativity

• You do not need big organizations to organize and create new innovative products.
• Ideas and new technology (radical innovation) that affects a lot of people and carries with it a lot of uncertainty, are now coming from consumers. Take for example the SMS messaging service provided by telecommunication companies. These companies were not sure how exactly this service would be used, until it got into the hands of teenage users!
• This is because consumers are ahead of producers.
• Generally patents are taken out based on the idea that the innovator knows how people will use their new invention. However, with radical innovation it is not until consumers use it that the inventor will realize what their product can do and how it will be used. Therefore, creativity is a collaborative and interactive process.
• Big corporations due to their structure are slower to take up new innovation as they have inbuilt tendency of past success (eg: they will be hesitant to promote a completely new radical innovation as they will not be able to project it's sales target and revenue; rather they are more likely to promote a new product that has similarities of an existing product where it's sales/cost projections are measurable).

2. Open Innovation

• There is a predominant scenario currently happening. Big companies (who are known to be more traditional and closed source) versas "Open source". There is a concern that big corporations try to stifle "Open source" by using a lot of copyright and patents. This in turn prevents innovation from taking place.
• The argument made is that "Open source" and consumer driven innovation is to help prevent big companies from taking a monopoly of specific areas.
• Take for example, big companies thought bloggers wanted to be journalists or publishers. But bloggers just want to have a voice - to be able to have an open dialogue/conversation where they can express themselves.
• The question is raised as to how we can sustain the open movement. What is the role of public policy and funding?
• Charles Leadbeater believes that closed organisations will start moving to open source.
• He also provides an example where companies can build on communities. There is a software game company in China that have 250 million on line users. Imagine if they take 1% of these users as co-developers of the software. Let's apply this to our education or healthcare systems. If we took 1% of students or patients as co-developers on our education/health policies and directions, it would multiply our productive capacity. In effect, this will turn users into producers and consumers into designers.