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10th Anniversary Essays

Consumer Rising: From Consumption to Production to Design

One of 16 special essays on how the field of social innovation has evolved and what challenges remain ahead.

 

In 1909, Henry Ford famously told his management team, “Any customer can have a car painted any color that he wants so long as it is black.” The joke is rich in irony, for the precise reason that it’s not at all a joke.

Until recently, the process of product design has followed a similar non-trajectory. Product design changed little over the twentieth century, despite the wealth of choices that now confront consumers. Products are conceived, designed, and tested within a black box of corporate secrecy before being carefully “launched” to the public. Under this model, there is one channel for the consumer’s input: her money. She might vote with her wallet, but she had no opportunity to influence the ticket. But the advent of digital and communications technologies is allowing consumers to encroach on this process. Working backward from marketing to production to design, a few examples will illustrate our meaning:

  • The rise of social media has made marketing a largely collaborative process, in which consumers are enlisted via various platforms not only to promulgate a message, but to tweak it as well. Indeed, some advertising agencies specialize in crowdsourced campaigns, in which consumers actually conceive and execute the campaign itself, with nominal management from the client and agency.
  • The last five years have seen an explosive interest in home fabrication, as everything from beer to electronic hardware to open source software projects is produced by individuals or small teams—a dynamic that harkens back to a pre-industrial economy, in which cottage industries were the norm.
  • Consumers are playing an increasingly crucial role in the very design of products. As early as 1986, the MIT economist Eric von Hippel showed that innovations within the integrated circuit board industry were driven not by a firm’s engineers but by the consumers of the chips—who were innovating before the firms could respond—as well as by the ability of the firms to customize the standard chips. The firms capitalized on this phenomenon by integrating these innovations into subsequent product releases. Von Hippel calls this “lead user innovation.”

The last five years have seen an explosive interest in home fabrication, as everything from beer to electronic hardware to open source software projects is produced by individuals or small teams.

It is this final development—in which users design their own products—that could trigger the most disruption. Von Hippel focused on “lead users” for the simple reason that, as of even five years ago, only a small percentage of customers possessed the knowledge and capital (in the form of expensive design software) to design innovations.

This is no longer the case. At 10 percent of the price, Google SketchUp can perform many of the same functions as a $4,500 AutoCAD system. Prototypes can be made with increasingly affordable 3D printers, then publicized via social media and funded by Kickstarter campaigns. None of this will threaten existing manufacturing or design firms in the near term, but in the long or even medium term, it points to a decentralization and de-capitalization of manufacturing, a de-professionalization of design, and a radical democratization of the way products are created, bought, and sold.

 
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COMMENTS

  • Bobby Mora's avatar

    BY Bobby Mora

    ON February 21, 2013 12:20 PM

    In the long run, I think that the advent of a decentralized production design will change how we organize corporations. They may become more like co-operatives and less like institutions. Their sole value being the exchange of ideas, design, and services. They will emphasize a more fluid environment, where specialists across different fields will be in fluid contact with each other. The main focus will be on improving equity and not increasing capital.
    I am know to economics but I think I phrased that correctly.

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