1. TAMPERE UNIVERSITY OF TECHNOLOGY
Tampere School of Business and Technology
MANUEL VELAZQUEZ VEGA
COMMUNITIES FOR INNOVATIONS: Integrating Communities to Create
Value.
Seminar Report

2. ii
ABSTRACT
Innovations and the means for their enhancement demand participation within
parties outside companies’ boundaries. The following paper presents how
communities can be integrated into the process of an innovation to mainstream
benefits and risks among different parties. The present paper clarifies the meaning
of and related practices between “innovation” and “communities”. There are many
examples in the literature that sustain that these two practices are strongly
interrelated and that the interactions among communities impact the realization of
innovations.
Yet this review just shows a different perspective of a knowledge exchange
dilemma that companies face when looking for value creation means out of their
boundaries. The dilemma between innovation and communities is based on the
practices of explicit knowledge sharing, and the risk of compromising exploitable
tacit knowledge resources within particular contexts. Today both practices are
addressed in a different way due to higher rates of integration of value networks
and open collaboration. This current integration founded in open science principles
attempts to increase organized community efforts to impact positively the
economy. Nevertheless, the development of these practices are at an early stage
awaiting to benefit the gross-industry sectors as many implicated parties are still
learning how to manage open innovation and build up a sustainable network
without compromising core knowledge assets.
In this sense, the reviewed literature presents communities as the backbone of new
innovations, stressing the need of external collaboration, knowledge exchange-
integration pro-retrieval, as well as discretional knowledge management practices.
A community calls for integration, knowledge sharing education, and trust
construction practices. Companies can obtain great benefits by processing and
integrating communities’ contributions into their knowledge infrastructure to get
access to actionable insight. Well managed communities can become the places
where companies can repeatedly ask the hard question about where to invest their
assets or how to improve their current operations in accordance to the needs of
their final customers. Communities can help to keep up a flux of ideas, facilitate
the creation of collaborative teams, provide the basis for further development and
research, and support commercialization and marketing activities.

3. iii
PREFACE
Innovation through communities encloses many of the issues that companies are
facing today to sustain their competitive aiming given the constantly changing
external environment. Through communities companies can find customers to
listen and ask what they want, but they can also conduct research and obtain
information about all the different phases of a product development process.
The inspiration for researching Communities and Open Innovation came from my
supervisor with who I had several fruitful discussions about the concepts and broad
ideas presented in this paper. Thus my special gratitude goes to Dr. Jouni Lyly-
Yrjänäinen for all those interesting debates we had.
Tampere, 10.10.2010
Manuel Velazquez Vega

4. iv
TABLE OF CONTENTS
ABSTRACT ______________________________________________________ ii
PREFACE _______________________________________________________ iii
1 INTRODUCTION ____________________________________________ 1
1.1 Background __________________________________________________ 1
1.2 Objective _____________________________________________________ 1
2 INNOVATION _______________________________________________ 3
2.1 What Is Innovation? ___________________________________________ 3
2.2 Acquiring Innovation __________________________________________ 4
2.3 Enhancing Innovation __________________________________________ 5
3 USER COMMUNITIES _______________________________________ 7
3.1 Why Communities? ____________________________________________ 7
3.2 Types of Communities __________________________________________ 7
3.3 Improving Quality and Attractiveness_____________________________ 9
4 INNOVATION & COMMUNITIES ____________________________ 11
4.1 Open Innovation _____________________________________________ 11
4.2 Communities for Open Innovation_______________________________ 12
4.3 Networking for Open Innovation ________________________________ 13
5 CONCLUSION & RECOMMENDATIONS ______________________ 14
REFERENCES __________________________________________________ 16

5. 1
1 INTRODUCTION
1.1 BACKGROUND
Traditionally companies lead their Research and Development (R&D) efforts in
great extent internally. Examples of this are the stage gate process, the product
development tunnel (Figure 1), and the chain link model (Schonberger et al. 1994,
p. 59-61). An open mode of collaboration has attracted attention especially in the
Information Technology (IT) sector for the development of software. This practice
has shown how the simple exchange of information within different parties can
enable the buildup of a final product out of the information flow itself (Chesbrough
2003, p.187-195).
A first Production
quick Build a Test and
business and full
investigation Validation
case Development launch
S S S S S Market
G
G
G
G
G
1 2 3 4 5
1
3
5
2
4
Approve
Initial Interim project Review of
Screen Approval Product
development
Release
result
Figure 1. Stage Gate Process and Product Development Tunnel.
In addition to software development, this collaboration approach is also becoming a
common practice within other industries. An open community project is described
by Watson et al. (2005, p. 125-142) with the Oxford English Dictionary. The
project took about 70 years to complete and was compiled primarily from
definitions submitted by thousands of volunteers fluent in English language.
Interestingly, Winchester (1998) reported that an insane American prisoner became
the most prolific contributor to the original compilation of the dictionary. This
example illustrates two things. Firstly, everyone is able to contribute regardless of
their personal circumstances in an open innovation scheme. Secondly, collaborative
efforts can create great value.
1.2 OBJECTIVE
Due to the integration of information and communication technology (ICT)
networks, the ability of combine people’s ideas has nowadays no limits. Still it
seems pretty challenging to lead projects for the commercialization of useful ideas,
enforce collaboration of people in groups within these networks, integrate their
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workflows, and create trust between external and internal units from different
entities.
The objective of this paper is to present how communities could help in
the realization of an innovation.
Chapter 2 presents the findings about innovation; definition, acquisition, and
enhancement. Chapter 3 introduces communities; usability, the different types,
and how they can be improved. Chapter 4 gives a short introduction to open
innovation, presents how communities can be narrowed and integrated for
open innovation, and sketches community networking influenced by open
innovation practices. In chapter 5 conclusions are drawn and the current picture of
open innovation management is given.
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2 INNOVATION
2.1 WHAT IS INNOVATION?
The concepts of invention and innovation are mistakenly often used
interchangeably. Since invention implies coming up with something new while it is
the bringing an invention to life what makes an invention to an innovation
(Gattorna 1977, p. 2; Davila 2006). Rubenstein (1989) defines innovation as the
process whereby new or improved products, processes, materials, and services are
developed and transferred to places where they are appropriate. These two
definitions together imply a process of finding, developing, and realizing a certain
invention in accordance to someone else’s needs for explicit trading purposes.
Thus, innovation is a successfully commercialized invention.
Innovations can take place in two forms. One way is the radical innovation, also
called disruptive innovation, in which an insight is able to substitute existent
products, processes, practices, and even concepts. The other way is the incremental
innovation, or continuous innovation, in which an innovation is gradually enhanced
with small improvements (White et al. 2007). Figure 2 illustrates both cases,
incremental innovation on the left and the disruptive case of innovation on the
right. Both cases lean on a time frame and imply a successful commercialization
phase to be able to advance in their performance.
Technology Limit 2
Performance Limit
Maturity 2
Maturity
Performance
Performance
Technology Limit 1
Incremental Maturity 1
Launching
Innovation 2
Disruptive
Innovation
Launching
Launching 1
Time Time
TIME FRAME
Figure 2. Technology Life Cycle (Foster 1986).
Radical innovations are more commonly related with field-experts, researchers and
entrepreneurs whereas gradual innovations are rather linked with traders, well
established companies, and end-users (Maidique 1980, p. 59-76; Dodgson et al.
2008). However, field-experts can be highly conceptualized to innovate radically
out of their fields of expertise and trouble shooters not necessarily need to be
experts in a specific field to overcome difficulties and find ways to get the things
done. Therefore, an expert’s or end-user’s conditions are not exclusive for
innovation in any case (Root-Bernstein 1989, p. 43-55), but rather complements.
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Consequently, an unspecialized perspective can provide as much value as a
specialized one. Nevertheless a pre understanding with respect to the subject under
discussion is required for a shared mindset setup (Newell 2002; Alvesson 2004).
2.2 ACQUIRING INNOVATION
Drucker (1985) affirms that diverse needs on demand for better results in certain
periods of time may boost or even give rise to innovation and, especially if these
needs are worthy business opportunities, people will try to realize them. The seven
driving sources of innovation defined by Drucker (1985) are:
1. Unexpected: What is, and what is not working in the actual business? Why
is this? How to change/reinforce it?
2. Incongruity: Is what we consider valuable also valuable for our
stakeholders? Can we give them what they want, and remain profitable?
3. Process Needs: What is needed to reach a better performance? Can we
realize it with what we have? If not, how can we obtain what we need?
4. Structural Changes: What is on demand? Integration or specialization?
5. Demographics: What will be the major changes of our target group? What
will these changes demand?
6. Changes in perception, mood, and meaning: What is appreciated today? Can
we respond in time?
7. New Knowledge/The idea: What is new? How to apply it to our current
operations? What are the risks, and the ROI?
According to Hippel (1988), from the company perspective there are basically two
main ways to realize an innovation. The first one is the traditional way that comes
from the internal efforts, more commonly from the R&D departments of a
company. The second way of innovations takes into account external people such
as customers, suppliers or independent entrepreneurs. Throughout this paper, the
internal people of a particular company will be represented with black dots and
external people with white dots as shown in Figure 3.
External
Internal
Figure 3. People for Innovation – Company Perspective.
Not surprisingly, bigger needs require greater collaborative efforts to innovate and,
given the competitive landscape and the constantly increasing market demands,
internal and external people tend to have closer collaborations when working on
innovations together. This kind of collaboration requires knowledge integration
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throughout networks and domains (Mitchell 2005, p. 518-522). This integration
attempts to make guided collaborative efforts to innovate with parties that are
different in nature including for example government and universities (White et al.
2007, p. 116-118; Dixon 2009). However, this integration does not narrow
participation in a business network. Someone participating in a business network
can be (1) an independent party, (2) an expert in certain field, (3) an active
customer and provider of many products, and also (4) a member of other networks.
Heterogeneity in a network might help to acknowledge more easily the drivers of
certain markets and react faster to them because the knowledge scope includes
different perspectives of a shared issue (Drucker 1985, p. 27-122; European
Commission 2004, p. 23; White et al. 2007, p. 21-29).
2.3 ENHANCING INNOVATION
The process towards innovation is very dynamic and knowledge intensive.
Managers with understanding of knowledge management practices and awareness
of the intangible nature of knowledge assets have better competences to innovate
collaboratively (Newell et al. 2002, p. 105/152-155; Alvesson 2004, p. 180). Some
of the best practices include:
 Obtaining knowledge on people related with the company activities
 Increasing availability, sharing and mediating company’s knowledge
 Identifying best practices and new ideas to add value to current operations
 Avoiding redundancies
The reviewed literature provides among others an internal-oriented style that
suggests a hierarchical management to innovate where managers have special skills
and perform determined tasks in order to achieve an innovation (Roberts 1969, p.
259; Kanter 1982, p. 87-93; Drucker 1985, p. 27-122; Rogers 1995, p. 519). In
such cases organizations focus their efforts on the selection, development, and
congruence of the top management as the success depends on their decisions on
how to use available internal resources (Twiss 1980). Innovation flourishes when
internal teams have overlapping areas of knowledge, members can contact each
other independent of their functions and ranks, managers are in open ended
positions, and rewards systems look to the future (Kanter 1982, p. 87-93). Even so,
an innovation requires external awareness; including the awareness of the channel
that needs to be used to increase the chances of external support, acceptance, and
adoption (Rogers 1995, p. 519).
Clearly companies have shifted their innovation practices towards a more external-
oriented style where a moderate and discretional innovation management is needed.
In the external case, the tasks and outflows cannot be managed but rather cultivated
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and refined according to the interactions of a group supporting the realization of a
new idea (Edosomwan 1989, p. 20-30; Newell et al. 2002, p. 141-164; Alvesson
2004, p.182/184-186). This style takes into account the issue that innovation can be
encouraged or discouraged by the actions of external people that cannot be
formally managed (Christensen 1997, p. 207-210). Internal people in charge of the
process of certain innovation should be as close as possible to end users in order to
create value based on real needs (Ruggles 1998, p. 80-88; Chesbrough 2003, p.
76/184). Consequently, innovations call for team work among internal and external
people in order to create a greater value. The mentioned drivers, practices, people
and parties can be easily grouped and differentiated in a community repository
(Figure 4).
Figure 4. Grouping Internal and External People – Entities.
In this sense, companies could actively nurture their innovations by including local
or worldwide perspectives from different external communities (Lesser et al. 2001,
p. 831-841). In this direction, communities seem to provide a guided pattern of
communication enabling the understanding and integration of organized
contributions into a knowledge domain for supporting an innovation (Pemberton et
al. 2007, p. 13/74-85).
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3 USER COMMUNITIES
3.1 WHY COMMUNITIES?
In most cases communities are seen as means for improvement (Appendix 1).
Community is a source of collective knowledge with the contribution of its
participants, also called collective intelligence (Wang et al. 2006, p. 524-526).
Community knowledge building is the knowledge derived from members’
interactions in a community (Lambropoulos 2006, p. 414-416). In order to facilitate
these interactions, networking is needed to support the efforts of any community
(Khine 2003, p. 22/335-397). To help network management, communities require
to be enclosed under oriented guidelines for distributive actions (Figure 5).
Figure 5. Community Enclosed under a Specific Function.
Oriented communities can help in the design, stability, implementation,
documentation and scalability of a product (Dixon 2009). In this sense,
communities shape the generation of knowledge flows with respect to specific
goals and issues, while having the freedom to achieve these goals and solve these
issues in the best possible way. This knowledge flow intends to streamline benefits
from previous understanding and different perspectives; as well as realize under
what perspective certain understanding is valid to either augment success’ chances
or lower risks of spilling out resources in a product development.
3.2 TYPES OF COMMUNITIES
Before dot-com, user communities had a very limited scope through magazines,
post letters, and social gatherings (Turban 2007, p. 393-397). Such communities
were built around the shared interest of improving products and acquiring insight
into how the best performance is obtained (Jin et al. 2007). Communities were seen
as informal, almost volunteer structures for solving problems within the web by
exchanging experiences (McDermott 2004, p. 2). The creation of a community can
be conceived in a spontaneous manner, but lately companies have realized the
importance of creating their own strategic communities (Rochlin 1997, p. 15-
34/45-46; McDermott 2001; McDermott 2004, p.10; Tzu 2004, p. 7). Spontaneous
communities do not include direct participation of the companies’ staff;
nevertheless spontaneous communities can still be closely monitored around
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specific companies’ purposes. Both cases (Figure 6) can provide insight into
companies in order to channel their efforts towards an innovation in a smarter way.
Strategic Spontaneous
Community Community
Figure 6. Creation of Communities.
Chesbrough (2003, p. 12-13/32-33/ 183) identifies three core activities to innovate
within a time frame: (1) time to research, (2) time to test, and (3) time to market.
These activities can be contained in communities, change or even become cyclical
over time, as for instance, outflows from a testing community may disclose further
research needs (Stoll 2007, p. 15/18/28/34; Owyang 2008a, p. 10). Under these
general functions (Figure 7), communities can help an innovation in (1) researching
improvements, economical solutions or new applications of/for a new or an
existing product, (2) testing a product under development that requires the previous
understanding or access to other products or technologies, (3) marketing
assessment, promotion, introduction and conceptualization of the product itself, and
(4) a partial combination of the three previous points.
RESEARCH TESTING MARKETING
Figure 7. Community – General Functions & Cycles.
First, research communities include gurus and users with the highest level of
expertise in a certain field. Research communities tend to link efforts of academics,
researchers or R&D units of entities deeply involved in a specific technology. In
this kind of community people should be able to easily access pre-selected
resources and peers in order to complement and share their findings. The role of the
company members is to deliver marketing and testing knowledge to the
community. One example is the collaboration between BP, the University of
California Berkeley, the University of Illinois and the Lawrence Berkeley National
Lab (2007) for the development of capabilities to put biofuels down the road.
Second, testing communities include users with a high level of expertise. These
people are either regular users or potential customers with a fair understanding of
the issue under development. The role of the company is to identify improvements
and further developments to enhance performance, as well as to assure contact with
the product under development. For example, at the moment at Tampere University
of Technology (TUT 2010) Nokia is realizing a project in which 250 mobiles were
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lent to engineering students for a two months trial period in order to identify
architectural defects and to find new applications.
Third, marketing communities include users or potential customers with no deep
understanding of the technology. Usually people in these communities are either
current customers who want to know more about the general use of certain product
or potential customers making explorations before the final purchasing decision.
The role of the company is to find out what is considered valuable in the market to
retain and expand its share. Polar (2010) has a practice where its customers can get
users’ tips and free of charge software updates for their products; while the
company can better understand customers’ needs and use that pool to launch new
products.
Communities may be enclosed inside other communities or overlapped with each
other (Appendix 2). Other general characteristics like language, geographical
proximity or market target can influence the interactions within a community. For
further considerations are the degree of certain qualities each participant requires in
accordance to the community function, and the fact that communities can go from
up-down involvement, or from researching to marketing approaches among groups
with pre-established interests (Appendix 3).
3.3 IMPROVING QUALITY AND ATTRACTIVENESS
Straight managerial practices for communities that depend on bottom-up
involvement are rather difficult to be applied as their success depends on
individuals’ commitment (Newell et al. 2002, p.120; Alvesson 2004, p.175). As
such, communities are not manageable but rather cultivable, meaning that
communities require a moderator instead of a manager (Rein et al. 2007, p. 50-61).
Still down-up communities, in the same manner as up-down communities, require
direction and administration to link their outflows with the company’s assets in
order to obtain an efficient development (Hippel 2002). In both cases, community
administration only supports, integrates, and communicates everybody’s opinions
(Tzu 2004, p.13-19). McDermott (2004, p. 10) and Renninger (2002, p. 253-261)
coincide that communities evolve to provide leverage by influencing organizational
decisions with their opinion. McDermott (2004, p.13) says that spontaneous
communities go from a practice of mere group discussions and idea exchange to a
direct and formal communication with the R&D units of a company. In the case of
strategic communities, the success can be seen when questions are answered by
people outside the company (Jin et al. 2007, Chapter 4.7; Renninger 2002, p. 151-
152). Here the role of the company should be upgraded to identify the people
responding to the community’s concerns.
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The constant growth of communities in some areas has shown the need of
designing tools to manage them as current staff levels cannot meet users’ demands
(Panel on Neutron Research 2007, p. 5-6). This growth has created positions like
“data managers” who incorporate feedback from users into data packages and
provide authoritative data sets to tackle more directly the development, re-analysis,
and research of a community (National Research Council 1995, p. 80; Committee
on Climate Data Records 2004, p. 63-80). Other technical issues encompass the
running of communities, like the use of Extensible Markup Language (CCIDGDC
2003, p. 16), the use of virtual private networks, or artificial intelligence for data
identification and processing (Vedral 1998, p. 28). Table 1 includes some
characteristics of successful communities.
Table 1. Characteristics of Successful Communities (Molm et al. 2000, p. 1396-
1426; McDermott 2002, 2004, p.11-12; Hess 2005, p.146/285/335; Sawhney 2000,
p. 24-54).
Hess McDermott Molm Sawhney
Clear function x
Active participation of moderator(s) x
Critical mass of engaged members x x
Accomplishment and Learning x x
High expectations x
Real time x
Trust x x x x
Reciprocity x x
Altruism x
Passion and Motivation x x
The lack of trust is a latent problem as potential participants might be unwilling to
collaborate truthfully with the perception that not everyone will contribute in the
same manner (Kramer 1999, p. 569-598; Andrews et al. 2000, p. 797-810; Empson
2001, p. 839-862; Dirks et al. 2001; Cabrera 2002, p. 687-710). Trust can be
increased if participants in a community can perceive reciprocity from other
participants (Molm et al. 2000, p. 1396 - 1426). Schulz (2001, p. 661-681) provides
evidence of the relation between sharing knowledge and reciprocity, indicating that
sharing knowledge stimulates a reciprocal flow of knowledge. At this point,
successful communities could be seen as the core of new innovations when
discussing open development (Onetti et al. 2005, p. 224-227) or, in other words,
user communities are “an innovative way to innovate”.
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4 INNOVATION & COMMUNITIES
4.1 OPEN INNOVATION
Today companies have realized the value of functioning as semipermeable
membranes able to embrace external contributions and combine them with their
internal assets and competences to develop business opportunities (Chesbrough
2008). This practice aims at avoiding technological and market uncertainties
(Chesbrough 2003, p. 11-13/130-133; 2008). Figure 8 illustrates the open
innovation scheme where R&D and commercialization of an idea can be carried
out in collaboration with external entities while the company internalizes,
incorporates, and shares outflows based on environmental needs and internal
competences.
Other Firm’s
Markets
New
Licence, spin Markets
Out, divest
Internal
technology Current
base Company 1
Market
Internal/external
venture handling
External
technology base External technology sourcing
Figure 8. Open Innovation (Chesbrough 2008; SCA).
Consistently with the definition of innovation, open innovation endorses
collaboration towards specific goals and mission oriented activities to demonstrate
project commercialization (Chesbrough 2008; Curtis et al. 2006, p. 368) either for
current or new markets. Additionally, open innovation takes into account the
capabilities of external potential network partners to realize an innovation. The
development of an innovation under participation of external parties with free
knowledge exchange requires risk management practices (Dixon 2009). It is
important to realize the implications of disclosing information, as it is difficult to
enforce custody over it (Braman 1989, p. 233-234; Newell et al. 2002, p 100-113).
It is also important to consider the fact that information needs to be processed and
validated (Alvesson 2004, p.122-124). Communities can be created under certain
conditions where some information flows are not disclosed until all interactions
have occurred (Chesbrough 2008). Communities can be founded under certain
restrictions, hold/share rights, description of responsibilities, and documents
outlining the sharing of benefits and risks. Agreements that include the particular
interests of each participant can help to create trusty environments for knowledge
sharing (National Research Council Staff 1999, p. 80-110, Chesbrough 2008;
Seppänen et al. 2007, p. 578-589; Jong 2008).
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4.2 COMMUNITIES FOR OPEN INNOVATIONS
Despite the risks, increased visibility inside the company could also improve
collaboration. Figure 9 switches the company structure into another community
where the funnel no longer represents the company but a sort of magnetic field
including the outflows from internal-external interactions, and the decisions
supported by internal members of the company.
Figure 9. Company as a Community.
Figure 10 integrates the new company structure with external communities. The
figure also presents the cyclical logic of the knowledge flows and how resources
can be allocated in accordance to each function within a time frame.
Figure 10. Communities for Innovations.
In today’s world, companies are focusing their efforts on identifying the most
relevant communities for achieving innovations. Some tasks of the company are (1)
to stimulate collaboration, (2) to grasp the outcome produced from communities’
interactions, (3) to follow further developments, and (4) to support
commercialization. From the open innovation perspective, communities can be
considered as cells of external knowledge resources, laboratories for
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experimentation, or a gate for straight contact with the different market places. The
“function”, the “monitoring methods”, and, in the case of a strategic community,
the “desired participants’ profiles” are elements that need to be delineated by the
company members.
4.3 NETWORKING FOR OPEN INNOVATION
When innovating openly, the company’s role is to pull and integrate market
oriented collaboration, enhance competitiveness, procure with solution providers,
and create value to its customers throughout the development of networking
(Timmers 2003, p. 121-140; Kuivalainen 2009, p. 2-4; Burris 2008, p. 2-8). The
management of network relationships has an important role in open development
businesses for integrating outflows and accomplishing the job on time (Dahlander
et al. 2005, p. 481-493). The main aim of networking is having access to external
key parties to keep sustainability even though, as at the user level, network partners
sometimes have contradictory intentions and expectations (Seppänen et al. 2007, p.
578-589; Chesbrough 2008; Dixon 2009; Welch 2009). Network communities for
innovations also include the participation of intermediaries, indirect partners, and
potential customers. Figure 11 is a snapshot of a network community with its
interactions for resources distribution.
Figure 11. Community Network for Innovations.
People in a community network can punctually replicate to value creation
opportunities, either by taking actions or bringing up insight in collaboration. Here
it is important to highlight the most relevant aspects from the company’s view
point, the less relevant research, or the most appropriate idea to be commercialized
under current market needs and company’s competences. On the other hand, if an
idea is not suitable for a company, the openness of the innovation process
facilitates another network partner to develop it using a different approach.
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5 CONCLUSION & RECOMMENDATIONS
In the past, companies have usually led their innovations internally in order to
protect their competitive advantage. Today companies have closer collaboration
with other parties sometimes including even competitors. The objective of this
paper was to present how communities can help in the realization of an innovation.
A great evolution towards a participative innovation process has taken place in the
last decade, mainly because of the integration of information and communication
technologies. Nevertheless, physical proximity with partners is still important to
carry out successful development processes.
The open sharing of findings with trusty parties could enhance and increase the
probabilities of achieving innovations. Networking is an essential part of open
innovation where companies require proactive search of potential partners and
solution providers for the creation of innovations. Innovation requires a close
monitoring of communities to anticipate changes in demand or technology. Figure
12 summarizes the different stages of an innovation based on its market coverage.
Integration with Commoditization
other Technologies Part of other innovation
Combination
Component
Acceptance 3 A B
Adequate Business Model
Commercial Success
Market
Invention 1 A B C D
2 A B C D Coverage
Product Substitute
Launch Disruptive
Other Users Innovation
More Apllications
Other Markets
Improved Process
TIME FRAME
(Number): Invention (number). Research, testing and marketing.
A: Successful product commercialization in the targeted market. The invention becomes an innovation.
B: Market diversification and changes according to users’ needs. Phase of incremental innovation.
C: The innovation helps in the realization of other innovations. Integral part of other innovations.
D: Commoditization of the technology until a substitute arises.
Figure 12. Innovation Development.
Knowledge assets are an important concern that companies should evaluate in
terms of their innovation processes, both internally and externally, in order to
perform low risk practices. Risk can be diminished with middleman communities.
A middleman community can orchestrate research, testing or marketing
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communities in order to achieve a balance between the different parties involved in
a development. Furthermore a middleman community can also create value
linkages between network partners for successful innovations. Successful
innovations help to create other innovations with the transmission of
knowledge within the network. The case of a disruptive innovation is still an issue
hard to foreseen. Nevertheless a network including the right partners might be able
to survive and evolve over the disruption. Figure 13 is a snapshot that shows the
dynamics of innovations where new ideas either create discontinuity or expand the
scope of an innovation.
Integrative
4 Innovation
Integrative
3 Innovation
Disruptive
1 Disruptive 5
Innovation
Innovation
2
Integrative
Innovation
TIME FRAME
Figure 13. Innovations’ Dynamics.
Finding partners for greater overall value and trust building practices to exchange
knowledge freely are important elements for innovations. The internationalization
of trade and the regulatory environment are issues that can also affect the
development of an innovation and call for reducing external boundaries. Further
research is needed for the specific case of developing technological innovations in
global markets.
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Appendix 1: Definitions of Communities
Virtual Social aggregations that emerge from the Net when enough Rheinglod
Community people carry on those public discussions long enough, with (1993, p.5)
sufficient human feeling, to form webs of personal
relationships in cyberspace.
Virtual Group of people with common interests and practices that Ridings et al.
Community communicate regularly and for some duration in an organized (2002, p. 273)
way over the Internet through a common location or
mechanism.
Online Interactive group of people joined together by a common Owyang
Community interest, where the most important feature is the interaction (2008a, p. 2)
among members.
Online Voluntary collaboration among members across time and Lucas (2008,
Community space independent of geographical barriers, with different p. 48-60)
rules from physical communities. They often exist around a
single idea or topic.
Knowledge Groups or organizations whose primary purpose is the Kramer (1999,
Community development and promulgation of collective knowledge. p. 50)
Knowledge A group of people providing information related to the same Huff (2002, p.
Community subject, and the information is interpreted in a different way 144-145)
in accordance to the previous experiences of people receiving
the information
Learning A learning community is a cohesive community that McConnell
Communities embodies a culture of learning. Members are involved in a (2006, p. 19)
collective effort of understanding. It attends issues of climate,
needs, resources, planning, action, and evaluation.
Communities A group of people who come together around common Vat (2005, p.
of Practice interests and expertise. They create, share, and apply 827-830)
knowledge within and across boundaries of teams, business
units, and even entire organizations - providing a concrete
path toward creating a true knowledge organization.
Communities A group of people in an organization who are (somehow) held Disterer
of Practice together by common interest in their work topic, purpose, and (2005, p.
activities. 1391-1396.)
Communities A group of individuals that may be co-located or distributed, Coakes &
of Practice are motivated by a common set of interests, and are willing to Clarke (2006,
develop and share tacit and explicit knowledge. p. 30-33)
Customer Organized system of customer contact, that allows regular O'Leary &
Communities interactions with customers, both in person and electronically. Sheehan
These interactions are for information sharing, feedback, and (2008, p.2)
exchange of ideas.
Community A community of practice where members mainly focus on the Paquette
of Creation sharing and generation of new knowledge for the purpose of (2006, p. 68-
creating new ideas, practices, and artifacts (or products). They 73)
can be legitimized through involvement in a company-
sponsored product development effort, or they may be
informal through various practitioners, with similar
experience and knowledge meeting where new innovations
arise from this interaction
Velazquez M.

26. Marketing
Online Community
ICT
Virtual
Community
Venture
Community of Community
22
Capital
Creation of Practice
Community
Appendix 2: Communities over communities.
Knowledge
Community
Face to Face Learning
Community Customer
Community
User Community
Research Testing
Velazquez M.

27. 23
Appendix 3: Some User Communities considerations in accordance with their
function.
ONLINE EXAMPLES
RESEARCH innocentive.com,
Up-down Build up
bootb.com, yet2.com,
yourencore.com,
F ninesigma.com
U
N
C
Down-up Build up
T nokia.com
I TESTING
O
N polar.com
MARKETING ebay.com, amazon.com
Down – Up Build up
Size The amount of people in the community; at the top tends to be “1 to 1”
organizational level, while at the bottom the interaction tends to be “n to N”.
Product How easy it is to obtain physical contact with the actual product; at the top are
located highly technological tangible products, in the middle non durable goods,
services and processed information, and at the bottom commodities.
Platform The importance of having a user friendly interface; analytical tools, easy
language, features, etc.
Social The openness of the community. The bottom tends to be public and spontaneous;
the top is strategic and private.
Homogeneous At the bottom participants are expected to have very similar profiles, while at the
top the group tends to be multidisciplinary.
Geography The level of geographic concentration of the participants. At the top participants
may come from many different countries, while at the bottom specific areas are
targeted.
Analysis The investment needed to process information.
Up – Down Build up
Expertise The level of previous experience the participants have in relation with the subject.
Incentives The investment (effort/time) that participants are willing to engage in the
collaboration.
Effectiveness The return in knowledge over the amount of participants.
Time The time that a participant is willing to invest in communication.
Control The degree of managerial control that can be exerted in the community. At the
top well determined schedules, profiling, selection, and goals; at the bottom the
community is uncontrolled and can be just cultivated as everyone is free to play.
Trust More levels of trust and reliability can be built around a well-managed
community rather that a public community.
Insight The level of involvement, understanding, and shared information per participant.
Velazquez M.