The book opens by telling the story of Goldcorp Inc., a mining company that was on a downward slope due to strikes, lingering debts, and an exceedingly high cost of production. The company’s fifty year old mine in Ontario was presumed to be nearly exhausted. Goldcorp CEO Rob McEwen, a newcomer to the mining sector, approved $10M of investment in additional exploration. Results were positive, with test drilling suggesting large new deposits of gold, but pinpointing the exact locations of the gold was proving to be an insurmountable challenge for Goldcorp’s employees. By coincidence, McEwen attended a conference where the subject of Linux, the open source computer operating system, came up for discussion. McEwen had an epiphany – why not adopt the open source model for Goldcorp’s mining activities? This is exactly what he did. In March 2000, the “Goldcorp Challenge” was launched with $575,000 in prize money. All of Goldcorp’s geological data was published on the company website, with an invitation for anyone to contribute their knowledge on how the gold might be located within the 55,000 acre property.

By the time the process was completed, entries arrived from geologists, graduate students, consultants, mathematicians and military officers. The contestants had identified 110 possible targets on the property, of which over 80% proved correct. Since the challenge was inititated, eight million ounces of new gold deposits have been found, and Goldcorp has moved from being a $100M company to being a $9Bn company.

Goldcorp is perhaps one of the best examples of how a business can benefit from breaking down the walls which exist between it and the outside world. The traditional thinking has always been that research is secret, and only trusted employees should be involved. However, the success of community-based activity for non-commercial projects like Linux and Mozilla has presented new possibilities and a new outlook for many companies, who are re-thinking their traditional viewpoints on how they interact with customers, competitors, and the world at large.

Don Tapscott and Anthony D. Williams, the authors of Wikinomics, build a convincing case for the benefits of breaking down barriers between business and potential outside sources of competitive advantage. They highlight the growth of new movements that are both a cause and a reflection of this new thinking. Firstly, the Peer Pioneers, most typically associated with free software projects such as Linux, but who have applied open source principles to create a multitude of products made of bits – in other words, information products. These include the many millions of contributors to open encyclopedia Wikipedia, and collaborative projects in many different areas of software development and scientific research.

Another development gathering pace is the ‘Ideagora’ – a marketplace for ideas, where questions can find solutions and solutions can find questions. Williams and Tapscott suggest that it is comparable to a classifieds site like craigslist.com, except rather than job ads and personals it posts a list of ideas and inventions that are ‘for sale’ or ‘wanted’. Examples of ideagoras are Yet2.com (which was new to me) and Fellowforce.com (featured on this site here recently (and again).

The next trend highlighted in Wikinomics is the growth of ‘Prosumers’. This term will be familiar to anyone who has studied mass customization. Originally the term was coined by Alvin Toffler in his book ‘The First Wave’, and referred to the ‘producer and consumer acting in concert’. It was sometimes used to label those customers who sought out mass customized products. However, Williams and Tapscott use the term differently, to describe the growing number of customers who are prepared to ‘hack’ products and adapt them in ways never envisaged by the producers. Wikinomics notes that the idea of amateur innovation goes back many years.  A perfect example is the story of how hot-rodding of cars developed in the late 1940′s and 1950′s.  Today’s amateur innovators have the advantage of the web where, instead of just sharing an idea with their neighbour, they can share it with thousands of fellow product hackers through online communities.

Examples of prosumerism today include communities that have grown around platforms such as Lego Mindstorms, the Apple iPod, and the Toyota Prius.  In many cases, after initial reluctance, the producer has engaged with these communities and involved them in the official innovation process.

Next up in this gallery of trends are a group of people called ‘The New Alexandrians’.  The original Great Library of Alexandria is reputed to have contained volumes on all the scientific knowledge then known.  Now, in the period of the fastest and broadest accumulation of human knowledge ever known, there is a new generation of Alexandrians who are again collating all the knowledge that exists.  These Alexandrians range from Google to librarians at institutions such as Harvard, Oxford and Stanford, who are scanning thousands of books and turning them into bits.  Along with media of all varieties, these digitized books will be sewn together into a universal library of knowledge and human culture.

This Alexandrian culture is also giving rise to a new age of collaborative science.  As Tapscott and Williams state:

“The emergence of open-access publishing and new Web services will place infinite reams of knowledge in the hands of individuals and help weave globally distributed communities of peers.  The rise of large-scale collaborations in domains such as earth sciences and biology, meanwhile, will help scientific communities launch an uprecedented attack on problems such as global warming and HIV/AIDS.  All considered, leading scientific observers expect more change in the next fifty years of science than in the last four hundred years of enquiry.”

Many different examples of scientific collaboration projects are described in the book.  Projects like the Human Genome Project, and Bioinformatics.org all use collaborative open source techniques to advance biological and medical research.  In  documenting this trend for a wider audience, Tapscott and Williams are providing a very effective rebuttal to those who have suggested that participants in open source initiatives are only interested in electronic gadgets.

Wikinomics also examines the ‘Platforms for Participation’ – the technical environments that have been developed to facilitate user innovation and interaction.  In many cases, these are application programming interfaces (API’s), developed by the likes of Google, Amazon and eBay, that enable small businesses and individuals to build innovative applications never envisaged by the companies themselves.  Such platforms do not just exist in the commercial sector.  Many not-for-profit organisations have built systems that examine publicly available data (in the U.S. at least) on pollution, crime and social cohesion.

The book also looks at what the authors call ‘The Global Plant Floor’.  This examines the possibilities for digital fabrication.  It also examines the possibilities for open architectures (i.e. an open basic design to which components of various kinds can be added, such as that used in personal computers) to be used in many other industries.  The book profiles the Lifan motorcycle company, that uses an open basic architecture on its motorcycles, which means that components from many different sources can be used without changing the basic design.  Tapscott and Williams use the example of Lifan to dismiss the idea that peer production is only suited to creating information-based goods.  They note that if physical products are designed to be modular, then, theoretically at least, large numbers of lightly co-ordinated supplies can engage in designing and building components for the product, much like the thousands of Wikipedians add to and modify Wikipedia’s entries.

The book rounds off with an examination of the ‘Wiki Workplace’.  This, as you can imagine, is a working environment which places far greater levels of reliance on staff to contribute towards organisational development and innovation in business process.  It is very hard to argue with the ideas put forward, especially when one reads the the account of how Geek Squad, an IT home-assistance service, has applied them to its business.

Personally, I have found books that deal with the trend towards peer production and open collaboration models to be interesting, but sometimes lacking in flow and not always easy to read.  Wikinomics is both informative and entertaining – it’s actually enjoyable to read.  I must admit that I got a little bit of satisfaction from the account of Lifan’s use of open architectures on motorcycles, as I had suggested something similar for the auto industry a few months ago.  Of course, few would believe me when I say I hadn’t read the book first.

Business books tend to go out of date quickly.  However, I expect that Wikinomics will be read for generations to come as a chronicle of how many of the existing assumptions about business fell away to be replaced by a new, distributed and collaborative approach  in the early 21st Century.
The authors and publishers of Wikinomics have adopted the open collaborative strategy themselves:  An addition to the book, called the Wikinomics Playbook, has been compiled using peer production techniques and is expected to be published shortly.

However, this does not mean that its effect on market based enterprises is neutral. A newly effective form of social behaviour, coupled with a cultural shift in tastes as well as the development of new technological and social solutions spaces to problems that were once solved through market-based firms, exercises a significant force on the shape and conditions of market action. The Wealth of Nations is an in-depth examination of the forces that are bringing about this change, and the efforts of existing industrial media providers, particularly in the United States, to restrict this change by lobbying for stricter laws in relation to copyright and patents.

Benkler cites many examples of social production that have come about through the web, such as Wikipedia, Linux and Folding@Home (which utilises un-used computing cycles to carry out protein research). He views the new collaborative models as something to be encouraged and assisted, on the basis that the pursuit of knowledge, unfettered by excessive restrictions of intellectual property, benefits individual freedom and the common good. The book shows how the way information and knowledge are made available can either limit or enlarge the ways people create and express themselves.

In truth, it is quite difficult to summarise this book. It is 473 pages of incredibly in-depth research and analysis on the development of social production and the challenges which it faces from the ‘industrial media’ sector. You will not read this on one train journey or one transcontinenatal flight. It is important reading for anyone with an interest in the future of the internet and the social co-operation that it has enabled in many diverse areas of research, artistic expression and knowledge sharing.

If you happen to have read Lawrence Lessig’s ‘The Future of Ideas’, you will see a certain amount of overlap with the arguments put forward by Benkler in The Wealth of Nations. This is not to criticise either book or writer; they have both contributed greatly to our understanding of the battle between those who would enable the spread of new ideas and those who would restrict them out of self-interest. However, both books cover similar ground in relation to copyright laws.
In 1776, Adam Smith wrote The Wealth of Nations, which is viewed by some as the blueprint for the capitalist system. The Wealth of Networks, in its title, implies that it contains a blueprint for a new economic system. This is not strictly correct – the networked economy which Benkler sees emerging generates wealth largely in a social sense rather than in a monetary sense. But it is inaccurate to label the book as anti-capitalist – to put it simply, Benkler argues for a reasoned and balanced approach between the commercial and the social aspects of the internet.

Surprisingly, The Wealth of Networks focuses almost entirely on social production of digital products – software, media and scientific data. It does not refer to how social production might impact manufacturing or durable goods. The reader can, however, take the arguments put forward and envision how they might apply to the developing field of digital manufacturing. Could present day extensions to copyright laws inhibit the future development of a digital manufacturing economy? Time will tell.

Benkler, Yochai; The Wealth of Networks; Yale University Press 2006. ISBN 0-300-11056-1.

Previously, I wrote about how the Danish government has become the first in the world to establish as a national priority, in the words of a government policy statement, “strengthening user-centered innovation”.  Part of the initiative is the Danish User-Centered Innovation Lab, hosted by Copenhagen Business School and staffed by professors from both CBS and the Aarhus School of Business. The goal of the Danish User-Centered Innovation Lab is to help bring Danish firms to the world forefront with respect to the profitable exploitation of leading-edge user-centered methods for product and service development.

Earlier this year, the Nordic Innovation Centre (NICe) launched User Driven Innovation as a new theme within its Nordic Innovation Policies’ focus area. The NICe invited Nordic actors from national and regional public bodies, business sector, trade and industry federations, innovation institutes, research institutions, and other relevant organizations to submit project proposals aimed at policy development in support of user-driven innovation.

Under this initiative, NICe will be investing up to NOK 12 million (1.4 million Euro) to support a portfolio of projects focusing on activities in support of user-driven innovation. It is expected that the portfolio will be comprised of 5-10 projects, each with a duration of 6-36 months.

The NICe is the Nordic Council of Ministers single most important instrument for promoting an innovative and knowledge-intensive Nordic business sector.

The Nordic Council is the forum for inter-parliamentary co-operation involving five Nordic countries and three autonomous territories.

In a separate development, a network of companies, designers, researchers and organisations In Denmark are joining forces to write a script covering user-driven innovation. The purpose is that in the future, other players may utilize the pilot project’s experiences. The trade organisation Dansk Erhverv (Danish Chamber of Commerce) will carry out the pilot project together with i.a. Danske Designere, Dansk Design Center , Odgaard Consult, Gemba Innovation and the Capital Region of Denmark.

Nordic countries have generally scored highly in various measures of innovation, and these developments suggest that they may already be ahead in the area of user-centred innovation also.

Note:  Some of the items above were brought to my attention via the excellent ‘Putting People First‘ blog, which is a ‘non-commercial experience design gateway’, developed as a public service to all those interested in the broader field of experience design and user-centred design.  Putting People First is maintained by Mark Vanderbeeken of the Italy-based experience design company Experientia with the support of his business partners and his readers.

This article on BNet explains and analyses the idea of Crowdsourcing ;

and this post by Michel Bauwens on the Peer Producers blog explains the difference between Crowdsourcing and Peer Production.

Nowandnext.com and Future Exploration Network have collaborated in producing a map of major trends for 2007 and beyond, across ten segments: society & culture, government & politics, media & communications, science & technology, food & drink, medicine & well-being, financial services, retail & leisure, and transport & automotive.

The map is modeled in the style of a city metro railway network. It shows how particular issues occur in a number of different trend lines.

Personalization features as a major ‘station’ on the map, influencing the direction of several areas: medicine and wellbeing, society and culture, financial services, work and business, science and technology, and retail and leisure. If you thought the diagram in my recent customerism article was complex, it’s nothing compared to the Trend Map.

It occurred to me that, while there has been extensive analysis of these various concepts, there has not been as much examination of how they have influenced and interacted with each other. To a certain degree, individual conceptual ideas overlap with each other, which may sometimes lead to a degree of confusion among those who are developing their understanding of mass customization and related business strategies. I hope that this article will shed some light on the origins of various concepts that have developed. It is probably fair to say that the terminology can come across as “management-speak” to many people, so it may be a good idea to come up with a more accessible description which can apply to them as a group.

An essential component in the evolution of these customer-centric business strategies from concept to reality has been the development of the web, firstly in the form of the world wide web itself, and more recently the ‘social internet’, sometimes referred to as “Web 2.0″. The role of information systems in the growth of the customer-centred business models will also be explained.

As is often the case when explaining something like this, a diagram helps. I have, to the best of my ability, mapped the evolution of mass customization and its ‘cousins’, such as user innovation and customer innovation. Towards the end, I’ll show a cumulative diagram which displays how all the different trends fit into the ‘big picture’.

From the first mention of the ‘prosumer’ in Alvin Toffler’s 1970 book ‘Future Shock’, right through to the current use of customer-driven innovation processes, there have been a great many significant events, which may at first appear unrelated to each other, but all of which have played a role in getting us to where we are today.

The ‘history’ of Mass Customization (it may seem strange to use the word history for something that is still developing) is likely to be familiar to readers of this website, but to quickly recap, the concept is generally traced back to Alvin Toffler’s 1970 book ‘Future Shock’ which referred to the producer and consumer working in concert. (It has recently come to light that an un-named lecturer at IBM’s System Research Institute outlined the mass customization idea as far back as 1963). Toffler used the term ‘prosumer’ to describe this type of interaction. The first use of the term mass customization occurred in Stan Davis’ 1987 book, ‘Future Perfect’, which was followed in 1993 by Joseph Pine’s landmark book ‘Mass Customization – The New Frontier in Business Competition’, which set out how this new strategy could be deployed in an enterprise.

Developments in supply chain management during the 1980′s and 1990′s, such as Just-in-Time delivery, made it feasible to dispense with large inventories of parts, and instead order frequent smaller deliveries to match demand. This made it more feasible to offer products built to order, as part order quantities could be based on actual customer orders.

The major impediment to widespread adoption of mass customization in the early 1990′s was the absence of an efficient communication channel for customers to describe their requirements. Telephone ordering existed, but it was not an efficient method for taking large numbers of orders for a customized product. However, two separate strands of information systems research were about to combine supply the right tool: the Product Configurator.

I’m open to correction on this, but my research suggests that the earliest work on what would be considered a product configurator was carried out by Ron Brachman at Harvard University in 1977. At that time, the term used was ‘knowledge representation’. In the mid-1980′s, Brachman worked at the Artificial Intelligence Principles Research Department at American Telephone and Telegraph (ATT) which developed the PROSE product configuration system for use in the telecoms industry. A few years later, unrelated research by Tim Berners-Lee would produce the first web-browser. By 1996, Dell had combined these two technological innovations into the first web-based product configuration system, that would allow anyone to specify their requirements when purchasing a computer. The idea of allowing customers to configure products on a website and then purchase the product was now no longer just a theoretical idea, but a reality.

Technological developments continued through the late 1990′s, with product configurators being developed by many different IT companies, but the general business concept of mass customization was largely unchanged during this period: companies would offer a basic product that could be configured in numerous ways by the customer at the time of purchase. The first two examples of how mass customization could be the catalyst for new business models came about at the turn of the Century. These can be summarised under the headings of Manufacturing Service Provider and Micro Manufacturing.

A manufacturing service provider is one who manufactures mass customized products, and also provides software to allow other brands to sell these customized products under their own name. The term ‘Manufacturing Service Provider’ is a variation on the well-known phrase ‘Application Service Provider’ which describes companies that provide business software as a service on the internet. The manufacturing service provider is simply offering custom manufacturing as a service to other companies through the internet. The best known exponent of this business model is Bivolino, a Belgium-based manufacturer of custom-made shirts. Customers can design and purchase made-to-measure shirts on Bivolino’s own website. However, Bivolino also provide other retailers with their expertise in custom shirt making, through an associated company, Shirtsdotnet. Retailers can set up their own website with their ‘branded’ version of the shirtsdotnet product configurator installed. They can also install a Shirtsdotnet kiosk in their stores, which their customers can use to configure a shirt while they are in the shop. Like on the retailers website, the retailer’s own branding appears on the kiosk version of the product configurator. The completed order is then manufactured and delivered by Shirtsdotnet/Bivolino, but under the brand name of the retailer.

The second of these business models, micro manufacturing, is exemplified by two companies: Zazzle and CafePress. Both of these companies offered conventional personalization of everyday products – you could upload your picture and they would print it on items like t-shirts and mouse mats. However, the most important aspect of their business was that they were also ‘micro-manufacturers’. Micro-manufacturing works like this: You have a website and you would like to earn money from it by selling merchandise. You have some interesting logo, photos or artwork that you want to put on t-shirts or other everyday items, but you have no factory, employees, suppliers or budget. No problem – sign up with a micro manufacturer. Upload your artwork to their website, then fill in a few details and copy some code to your own website. You are an instant retailer of your own collection. Manufacturing, distribution and payment are all dealt with entirely by the micro-manufacturer. All you have to do is run your site and wait for your share of the revenue to arrive from the micro-manufacturer. The idea has been a huge success, with Zazzle and Cafepress both having signed up hundreds of thousands of webmasters as members.

The growth of these companies was important in that it showed how the mass customization idea could be adapted to create completely new business models.

In conventional mass customization, the customer had, as yet, no role beyond specifying their requirements and making the purchase. However, it was obvious from the success of micro-manufacturing that there were a great many people who wanted to jump across from being customers to being developers of products themselves.

Ideas about involving the customer in the innovation process had been around since the late 1980′s. This area of research has a number of slightly different strands that have gradually come closer to each other over the years. User Innovation is the earliest of these concepts, devised by Eric Von Hippel at the Massachusetts Institute of Technology (MIT). Von Hippel discovered that most products and services are actually developed by users, who then give ideas to manufacturers. This is because products are developed to meet the widest possible need; when individual users face problems that the majority of consumers do not, they have no choice but to develop their own modifications to existing products, or entirely new products, to solve their issues. Often, user innovations will share their ideas with manufacturers in hopes of having them produce the product, a process called free revealing.

In 1986, Von Hippel introduced the Lead User method that can be used to systematically learn about user innovation in order to apply it in new product development. A Lead User is someone who faces needs that will be general in a marketplace – but faces them months or years before the bulk of that marketplace encounters them. Lead users are also positioned to benefit significantly by obtaining a solution to those needs. So user innovation can be combined with mass customization so that the customer is directly involved in the lifecycle of the product, from the design stage through to the configuration and purchasing stage.

Later, the idea of Open Innovation was devised by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at Berkeley. The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license ideas (i.e. patents) from other companies. In addition, internal ideas not being used in a firm’s business should be taken outside the company (e.g., through licensing, joint ventures, spin offs). While Open Innovation encourages greater openness in a company’s research and development, it doesn’t specifically encourage interaction with end-customers. Therefore it is quite different in this respect to User Innovation.

Another approach to this area is referred to as ‘co-creation’. This originated in the 1994 book ‘Designing Interactive Strategy – From Value Chain to Value Constellation’ by Richard Normann and Rafael Ramírez. They they proposed a model of ‘co-production’ between ‘actors’ in the business environment, coming together in a ‘value constellation’. The co-creation idea was later expanded upon by management writer C K Prahalad, who argues value is increasingly being co-created by the firm and the customer, rather than being created entirely inside the firm. Co-creation is at the heart of the open source software movement, where users have full access to the source code and are empowered to make their own changes and improvements to it. Open source software is the inspiration for other new business models, which I will come back to later.

Most recently, Patricia Seybold has updated the User Innovation idea in her book ‘Outside Innovation‘. This recent book brings right up-to-date the idea of customer involvement in the innovation process, and some of the concepts described in this article are explored in detail in ‘Outside Innovation’. Therefore, I would strongly recommend Outside Innovation as reading for anyone interested in exploring these ideas further.

Just as the first generation world wide web had allowed businesses to sell customized products to consumers, Web 2.0, or the social internet, enables new methods of interaction between business and customers. (The correct usage of the term Web 2.0 is sometimes subject to a certain amount of debate and argument about particular technologies. Therefore for this article I will stick with the more generic term of ‘social internet’).

The social internet is the name given to web-based activities that involve two-way conversations, where the consumer of information (the website reader) can also become a contributor of information to that same site. Examples of the social internet include blogging, where the reader can leave comments on an article, and wikis, where the reader can join a community and contribute to authoritative content on a particular topic. In the world of mass customization, the social internet has been adopted by some businesses to integrate their customers into proposing designs for products. In the business-to-consumer sector, companies like Threadless and Innertee have adopted this strategy, referred to as ‘Crowdsourcing’.

Crowdsourcing involves the use of discussion and debate among participants to arrive at a solution which satisfies the requirement. In some cases, such as Threadless, there is a formal ‘voting’ process. Designs submitted by members are voted upon and the most popular are then marketed by the business. In a crowdsourcing model, the designers whose ideas have been selected sometimes receive a commission on each example of their design that is subsequently sold.

An alternative approach in crowdsourcing for deciding the correct solution is a process of discussion and review. This is generally moderated by people within the enterprise who eventually decide what solution will be used based on a consensus among the contributors.

While crowdsourcing, to date, has been used mostly in the area of visual design, it could easily be adapted to issues of technical design also. Who is to say that an electronic equipment company could not use crowdsourcing to develop new products? There could be thousands of engineers itching to submit designs for new devices or contribute to the design of a new product. Indeed, Patricia Seybold’s Outside Innovation describes just such a case, that of National Semiconductor, which empowers design engineers to reach their desired outcomes with a comprehensive software toolkit.

Crowdsourcing can generally be described as commercial organisations encouraging customers or users to contribute knowledge or ideas, that it can then use to its own benefit, and the contributors may or may not share financially in the benefits. However, the possibility of using crowdsourcing for technical development inevitably hits a stumbling block due to the traditional concerns regarding the protection of intellectual property rights. Very few CEO’s would be willing to have their intellectual property and product designs discussed openly. However, the same viewpoint has been significantly challenged in the publishing sector, with the growth of the Open Source software movement. If open source can be accepted in relation to copyright, it might also be more accepted in other forms of intellectual property.

The general view among publishers of all kinds (including software) for many years was that it was essential to maintain copyright over the work to protect the financial benefits for the author and publisher. However, the growth of open source software changed attitudes to copyright, and it was only a matter of time before similar open distribution models would appear in other areas of activity. The first very significant development in this regard was Creative Commons licensing. This concept was devised by Lawrence Lessig in 2001, and it enables copyright holders to grant some of their rights to the public while retaining others through a variety of licensing and contract schemes, including dedication to the public domain or open content licensing terms. Creative Commons was adopted by many websites as a means of allowing the content to be distributed while giving a degree of recognition to the original publisher.

If you combine creative commons with user innovation, the result closely resembles another concept, Peer Production. Commons-based peer production is a term coined by Yale’s Law professor Yochai Benkler to describe a new model of economic production in which the creative energy of large numbers of people is coordinated (usually with the aid of the internet) into large, meaningful projects, mostly without traditional hierarchical organization or financial compensation. He compares this to firm production (where a centralized decision process decides what has to be done and by whom) and market-based production (when tagging different prices to different jobs serves as an attractor to anyone interested in doing the job). Peer production to date has been limited mostly to information technology projects, a good example of which is the open source Mozilla Firefox web browser.

The Outside Innovation book describes how this project is run on a non-profit basis, but has generated significant financial surpluses due to sponsorship arrangements with other technology companies. The Mozilla organisation is reported in Outside Innovation as looking at ways of distributing part of its surplus back to those who took part in its development. This gives rise to an interesting question – just as today’s public companies are listed on the stock market, distributing surpluses to shareholders in the form of dividends, might there in the future be a ‘stakemarket’ where peer production projects are listed and distribute surpluses to stakeholders who have contributed to them intellectually? Exploring this question is probably one for another day.

Getting back to our discussion, if you combine crowdsourcing with a type of creative commons intellectual property arrangement, you could have a business model where products are developed by users under creative commons licensing, which would in turn allow other businesses to use the intellectual property subject to conditions (financial or otherwise). This presents the potential to massively advance countless areas of technology, by opening them up to faster development by sheer weight of numbers.

Another part of our jigsaw is digital manufacturing (or digital fabrication – ‘fabbing’). This originated with CNC milling machines and the like in the 1980’s, but took a step forward technologically with the development of additive fabrication during the 1990’s. Without going into too much technical detail, additive fabrication is three-dimensional printing. Design data is read from a file, and a three-dimensional object is created by depositing materials in successive layers to create the shape contained in the design.

A company called eMachineShop combined digital manufacturing with the world wide web to create an ‘online factory’ which can make almost anything from a designs submitted by customers. Customers download eMachineShop’s own design software, an easy-to-learn CAD application. They then use this software on their own computers to compose their design, before uploading it to the eMachineShop website and place the order for it to be manufactured by the company.

eMachineShop’s design software is a type of ‘user toolkit’- the name given to software that assists users to design new products for manufacture by the company concerned. Although eMachineShop customers mostly design and purchase items for themselves, user toolkits are most often associated with open innovation, where they are used to contribute design knowledge to a project. User toolkits are to open innovation what product configurators are to mass customization. Of course, a user toolkit may exist as a web application or a software download.

It is also possible to combine one or more of these business concepts with digital manufacturing. There is already one example of Creative Commons and digital manufacturing being combined for the purpose of allowing customers to ‘download designs’ for products. Ronen Kadushin, a lecturer in furniture design at the Shenkar School of Engineering and Design in Israel, has published a collection of lighting and accessories, where the product designs available for download under the principles of ‘Open Design’.

In explaining many of these concepts, it is difficult to state definitively if a particular project belongs to one or the other concept, as it may display attributes taken from many or all of them. So, while all of these ideas and concepts for new ways of doing business were devised separately, they do overlap to a signficant extent. Patricia Seybold has devised a ‘continuum of customization’, showing many of these ideas on a scale of customer involvement, beginning with the most basic level of product customization and moving towards ever increasing involvement of customers as stakeholders in the business, through their contribution to product design and development.

Looking to the future, in the event that hardware manufacturers were to produce an affordable digital manufacturing system for home use, the popularity of downloading designs would grow exponentially. Chris Anderson discussed this idea in the final chapter of his recent book ‘The Long Tail‘ .

Combining user-friendly digital manufacturing with mass customization and the other concepts described above would enable a host of new business models to gain popularity, from the Creative Commons distribution example used by Ronen Kadushin, to ‘shareware’ style examples (get a basic product design for free, pay a fee for a more advanced version), through to standard commercial agreements. And, of course, any of these business models for digital products could be combined with all of the other ideas discussed above, for example:

• User innovation – users contribute to the design of a digital product design which is then made available for download by other customers;
• Crowdsourcing – users upload designs of their own for peer review and possible resale by a digital manufacturing business;
• Custom marketplaces – webmasters upload three dimensional product designs to a custom digital manufacturing marketplace (a sort of combination of eMachineShop with Zazzle or Cafepress).

One other technology development that may yet be a significant factor in the development of customerism is digital identity management. Inputting personal details, and especially personal measurements or other preferences, is a chore for most people. What if you could store all of your personal details in a manner where they could be retrieved instantly, to be used whenever you are purchasing a customized product, contributing to an open innovation process, or just about anything else? An open source project currently underway, called the Higgins Project, may be the path towards having a single overall digital identity for every web user. This project is still at the development stage, but could be a major leap forward in the way that personal data is accessed on the web. While its impact cannot be predicted with certainty, if successful it could make filling out detailed order forms on the web look quaint in years to come.

This is the overall diagram (set your browser to full-screen view for best results) which shows how the various events and trends described above have interacted with each other. In the diagram , the event flows sometimes originate at a great distance from each other, not so much in the geographic sense, but rather in their field of research or activity. However, each new development feeds off everything that has gone before, and differences between the concepts tend to be eroded as ideas become adapted to real-world applications.

This is where we are now then: a collection of separate business concepts and enabling technologies, that encourage user/customer participation, whose attributes overlap with one another to a significant extent. I have given some thought as to whether they can be labelled collectively as a group. While there is no single word that can take in all of them (‘masspeercustomizationcommonsmarketplace’ doesn’t roll off the tongue!), my personal opinion is that there is one word to describe a series of ideas that empower the customer with a greater level of participation in deciding how products are designed and how they are produced. It has been used before in a couple of places, more so to describe the general growth of consumer power, rather than in the context I am describing here. However, “..isms” generally refer to a collection of ideas, so it seems appropriate to use it for this purpose.

It’s called ‘Customerism’.

Note: Some information for this article, particularly the definitions of some concepts, was sourced on Wikipedia. Logos of companies are shown in diagrams to illustrate an event or trend only.

It might be appropriate to namecheck those people who have used the term ‘customerism’ in other contexts previously. Firstly, Dan Gillmor wrote an article in SiliconValley.com some years ago which used the term (unfortunately this article seems to be no longer available online), and more recently, Jeff Jarvis titled a posting “The Age of Customerism and Producerism”. This article discussed at length the merits of the blogging approach to communication with customers.

However, if you look a little closer, many of the tried and trusted examples of mass customization are very labour intensive. All of the customized shoes currently available from major brands are still manufactured by people sitting at a workbench, most likely in East Asia. So the boundary between craft-based customization and mass customization is not always as clear-cut as one might expect.

A perfect example of this is the snowboarding sector. Most of the suppliers in this market offer their customers some degree of customization, either in the decorative or functional aspects of the snowboard. However, the manufacturing process is still very much an art form as it is a science. A recent article about Ascension Snowboards Inc. in the Spokane Journal of Business.

The article describes how John L. Minor, CEO of Ascension:

“..decided to produce custom-made boards partly because consumers in general are starting to prefer customized products, such as computers. The snowboard market in particular is very graphically driven, and customers want the opportunity to express their own ideas and personalities on their snowboards, he says. Also, as a father, Minor says he couldn’t find snowboards for his children that met his expectations.”

The article gives a good description of the actual manufacturing process, which involves building up the various ‘layers’ of the board. Interestingly, Ascension makes its own materials, which allows it to accelerate the production process, so that customers can receive their snowboards within days, rather than the typical wait of several weeks for a custom board. Once the company starts selling its snowboards online shortly, it will add a real-time counter feature on its Web site, which will tell customers how many days it will take for a snowboard to arrive at their doors.

This vertical integration (making its own materials) is an interesting alternative strategy for achieving fast turnaround times. While this was not the only reason why Ascension choose this approach, it does raise the question:

If an order for a customized product can be turned around within days, does it matter if the actual manufacturing was done in a craft environment rather than an industrial one?

De-facto mass customization could be used to describe a situation where traditional methods are used to manufacture a customized product, but innovative processes are applied to other aspects of the business such as supply chain management, so that the customer gets the finished product at mass produced speed.