Vol. 8, No. 2, 15-39 doi:10.17708/DRMJ.2019.v08n02a02 INTERNAL AND EXTERNAL PERSPECTIVES ON USER INNOVATION: WHAT WAS LEFT BEHIND? A REVIEW OF CURRENT LITERATURE Khatereh Ghasemzadeh University of Udine, Udine, Italy ghasemzadeh.khatereh@spes.uniud.it - Abstract - This paper carries out a systematic and up-to-date literature review in the domain of user innovation (UI). Unlike previous reviews, this paper scrutinizes the "locus" of UI, meaning it distinguishes between studies focusing on external-to-the-firm conditions of UI (user's types, users' roles, enabling platforms, etc.) and papers focusing on internal-to-the-firm conditions of UI, such as strategies, capabilities, and organizational routines that trigger and support UI processes. This review shows that internal-to-the firm conditions represent a clearly neglected subject in the domain of UI studies. Thus, this paper encourages more research - both theoretical and empirical - to be carried out on the strategic, organizational, and managerial sides of UI. Keywords: user innovation, user-driven innovation, user involvement, customer-driven innovation, co-creation, co-development 1. INTRODUCTION The theme of user innovation (UI) has gained considerable attention in innovation studies and practices in recent decades (Hyysalo, Repo, Timo-nen, Hakkarainen, and Heiskanen 2016:18). Users have been renowned for a long time as vital sources to enhance innovation performance and increase competitiveness, regardless of the type and size of the company (Keinz, Hienerth, & Lettl, 2012; von Hippel, 1986). Users' contributions to develop new products and services result in the enhancement of efficiency and effectiveness of the innovation process (Goduscheit & Jorgensen, 2013). Notably, collaboration with external stakeholders, and more specifically with users, has challenged the so-called "closed innovation" model through which innovation is the result of large laboratories inside firms (Pustovrh & Jaklic, 2018). This research stream is nowadays characterized by a certain maturity as well as an internal structuring into multiple subtopics, such as the role of communities of users and crowdsourcing (Fuller, Matzler, & Hoppe, 2008; Poetz & Schreier, 2012), ways and toolkits for involving users (von Hippel, 2001) and enabling them to experiment and innovate (Jeppesen & Frederiksen, 2006), not to mention a copious research stream on the different typologies of users to be involved, such as lead users (Luthje & Herstatt, 2004; von Hippel, 1986). Although an expansion in the number of papers published and an extension in the focus of UI studies is undeniable, the literature by far has paid abundant attention to the preconditions and the consequences of the process of users' involvement (Bogers, Afuah, & Bastian, 2010; Greer & Lei, 2012). However, the literature has overlooked some aspects of the process itself, mainly planning, organizing, and managing UI processes inside firms. This review takes a different angle by investigating the locus of UI studies. We aim to understand to what extent the existing literature has been looking at external-to-the-firm conditions of UI - such as the use of platforms, the characteristics of users, the impact of different industries and ecosystems - and in-ternal-to-the-firm conditions. The latter refers to the Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 15 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature strategic, organizational, and managerial conditions that support the deployment of Ul-related activities. Therefore, based on the derived concept itself and its existing streams of research as well as the theoretical foundations, a future research agenda in the domain of Ul specifically pertinent to internal-to-the-firm conditions is suggested. To derive a better understanding of the phenomenon, this paper is divided into five parts. First, we outline the concept of Ul as offered by the literature, followed by a snapshot of the historical evolution of the literature. Section 3 provides the methodological details of our research, and Section 4 presents the descriptive results and examines precisely papers in different streams. Section 5 provides a discussion of theoretical contributions and managerial implications as well as a future agenda. 2. THEORETICAL BACKGROUND 2.1 A snapshot of the evolution of UI literature It is a common belief that studies of user innovation have their roots in the pioneering work done by von Hippel (1976), who examined the role of manufacturers and users in scientific-instrument innovation and subsequently found that such innovations derived from users' ideas. The results showed that users test and prototype the instruments and innovation does not belong merely to the commercializing firm. Since then, the literature has developed in long waves. Each wave was characterized by a specific research theme becoming prevalent1. In particular, we identified • a "user characteristics" wave (from 1976 to 1995) • a "tools for collaboration" wave (from 1996 to 2005) • a "value co-creation" wave (from 2006 to 2017) The main - and somehow only - interest of scholars during this first period (1976-1995) was in the "lead-user" concept and the active role that users started to play in many industries within the processes of new product development (NPD) of firms. Studies of lead users, a category first introduced by von Hippel (1986), started new research 1 We used text analysis in VOSviewer software to provide a better view of predominant topics of each wave. from scratch in this period. von Hippel indicated that lead users are those users who have real-world experience to solve a problem in the market. Subsequently, the success of the method was also put under empirical scrutiny. Urban and von Hippel (1988) characterized the lead-user method in terms of three components: 1) users with higher experience of a need are more capable of giving information, 2) users differ based on the benefit they gain through participating in idea generating, and 3) sometimes users lead regarding the trend of the market. The lead-user method was introduced as a much faster and less costly way of acquiring new ideas for products and consequently creating promising outcomes for the firms (Herstatt & von Hippel, 1992). Further studies within this wave focused on developing products implementing UI in various firms. The promising examples of industries integrating users in the process of innovation are the computer-related systems industry (Urban & von Hippel, 1988), the low-tech sector (Herstatt & von Hippel, 1992), scientific-instrument factories (von Hippel, 1976), industrial products (von Hippel, 1978), and the electronics sector (von Hippel, 1977). Between 1996 and 2005, the pace of expansion of the literature moderated. Research on UI remained mainly confined to the lead-user research field, and the search for the best methods for fostering collaboration between firms and users became more and more central. The increase of the heterogeneity of users' needs (Franke & von Hippel, 2003) triggered firms to create new toolkits to fine-tune older ones in order to better and more accurately understand users (von Hippel, 2001) and to allow customers to more effectively create their own designs and products (Franke & von Hippel, 2003; Jeppesen, 2005). Furthermore, the enhancement of the internet and internet-based technologies led to creating new areas of research into open-source software, virtual integration, and deeper ways to involve users. Open-source software gained considerable attention among scholars as a way to reveal and share innovations freely within a community of users (Lakhani & von Hippel, 2003; von Hippel & von Krogh, 2003). In addition, among the topics that started to be investigated by scholars we found an 16 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 increasing interest in the role of other-than-lead users, such as everyday users (Kristensson, Gustafs-son, & Archer, 2004; Magnusson, 2003). However, in the last decade (2006-2017), the number of studies of UI increased exponentially. Regarding the growing speed of social media and internet-based communication, more studies during the third wave focused on finding newer ways to collaborate with users. Online platforms and contest communities are the most implemented ways through which users can contribute to different innovation processes (Fuller, Hutter, Hautz, & Matzler, 2014; Hienerth, von Hippel, & Jensen, 2014). Simultaneously, more tools for integrating customers' efforts started to emerge, such as living labs (Guzman, del Carpio, Colomo-Palacios, & de Diego, 2013) avatar-based innovation (Kohler, Fu-eller, Stieger, & Matzler, 2011; Kohler, Matzler, & Fuller, 2009), and brand communities (Brodie, Ilic, Juric, & Hollebeek, 2013; Fuller et al., 2008). Furthermore, several new topics also started to emerge and to be addressed by scholars, such as the theme of co-creation and value-creation in the context of customer involvement, which to a large extent deal with marketing issues. The research started to investigate the involvement process of users and customers in creating new products and most recently in the service sector (Alves, 2013; Gustafsson, Kristensson, & Witell, 2012). A high number of firms integrate users in the process of innovation in order to decrease market risks (Enkel, Perez-Freije, & Gassmann, 2005). A review of the co-creation and co-production literature revealed that these processes are considered as value themselves, and are used to attain more efficiency and more customer satisfaction (Voorberg, Bekkers, & Tummers, 2015). Bharti, Agrawal, and Sharma (2015) developed a systematic literature review of value co-creation and stressed that the aforementioned process started to gain attention especially after Prahalad and Ramaswamy (2004) introduced co-creation as a way to satisfy customers' needs. The review showed that co-creation gradually became used as a way to maintain long-term relations, diminish ethical conflicts, create customer loyalty, and build intellectual property rights. In the same line, Gronroos and Voima (2013) specified the roles of customers and firms in the process of value and co-creation, indicating a joint value sphere of direct interactions between customers. Similar concepts which overlap with co-creation studies are co-creation design (Frow, Nenonen, Payne, & Storbacka, 2015) and co-innovation (Lee, Olson, & Trimi, 2012; Romero & Molina, 2011). Figure 1 shows the graphical maps of the three waves. 2.2 Defining UI The paradigm of UI was brought to the literature during the 1970s by von Hippel, who, in a pioneering study, introduced the concept of the "customer-active" paradigm (CAP) through which "the would-be customer develops the idea for a new product; selects a supplier capable of making the product; and takes the initiative to send a request to the selected supplier" (von Hippel, 1978: 40). Subsequently, von Hippel (1998) provided a complementary definition of the phenomenon by indicating that users do not manufacture an innovation but integrate it into the assembly of a finished product or process. Hence, in accordance with early definitions, users are the key inputs for the innovation processes and they are also the ones who benefit exclusively from the process by using the innovation and sometimes also trying to commercialize their innovations (de Jong & von Hippel, 2009; Gault & von Hippel, 2009). More recently, Bogers and West (2012:13) defined user innovation "conditions under which users innovate and how users can be supported to be more innovative" which bring utility for the user rather than any pecuniary benefit for the firm. Although the literature does not provide accurate differences between existing overlapping concepts related to UI, we determined and grouped the already existing concepts in the literature. A body of studies addressed the phenomenon of user-driven innovation (UDI); however, there is no complete convergence in the literature regarding its definitions. Hjalager and Nordin (2011:290) defined UDI as "the phenomenon by which new products, services, concepts, processes, distribution systems, marketing methods, etc. are inspired by or are the results of needs, ideas and opinions derived from external purchasers or users." Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 17 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature Within the same period, Gault (2012) showed that users can act as sources of information for firms, for example, by providing feedback to firms through the use of appropriate platforms and/or social media through user-driven innovation and user-centered innovation (UCI) processes. Gault (2012) differentiated UDI from UI, indicating that in the process of UDI it is the firm that mainly benefits from the innovations produced by users. In other studies, such as a Hyysalo et al. (2016), UDI is a broad concept consisting of various modes including UI, which varies from slight integration of users to deep collaboration. De Moor et al. (2010:53), who investigated the role of UDI in future technology, defined UDI as "the process of collecting a particular type of information about the user: it deals with insights both at an observable and a more latent level that are quite difficult to grasp." Affected by the necessity to comprehend the new ways of collaboration between users or customers and firms, most recent definitions focused on the concepts of co-creation and value-creation. Unlike UI studies which highlight the main role of users and their characteristics and motives, these group of studies regard users as collaborators or the inspiration for the innovation process to produce new or meaningfully improved products, services, and processes. Taking a similar point of view, Greer and Lei (2012:64) defined the process of engaging customers as the "process of engaging in the creation of new products or services in collaboration with customers or users." Considering the role of users and customers in product development, Hoyer, Chandy, Dorotic, Krafft, and Singh (2010:283) defined the co-creation process as "a collaborative new product development (NPD) activity in which consumers actively contribute and select various elements of a new product offering." Bogers and West (2012) noted that co-creation is also a means to create value more generally beyond creating product innovation. Value co-creation refers to a joint problem-solving collaborative involving suppliers' and customers' resources (Aarikka-Stenroos & Jaakkola, 2012). Further studies expanded the concepts of customer-centered innovation or customer-driven innovation, indicating that "customers may lead to innovations, not only be attracted or retained through innovations" (Oberg, 2010:992). Desouza et al. (2008) emphasized that in customer-driven innovation processes, customers have the main role in innovation and the involvement of the organization is limited, in contrast to older concepts such as customer-focused innovation in which customers had fringe roles and innovation was done by the organization. Meanwhile, other similar concepts such as "participatory innovation" and in particular "participatory design" gained incredible attention; these are processes through which end-users are invited to contribute and participate in developing products and systems as co-designers (Buur & Matthews, 2008; Sleeswijk Visser, Van der Lugt, & Stappers, 2007). 3. METHODOLOGY We carried out a systematic review of the literature. To do so, we defined a search strategy, set explicit criteria for inclusion and exclusion of papers, and carried out a deep analysis of the results (Crossan & Apaydin, 2010). A systematic literature review provides transparency (Rousseau, Manning, & Denyer, 2008) and yields an accumulated knowledge of various research fields (Tranfield, Denyer, & Smart, 2003). To carry out this review, the Web of Science database was chosen and searched using user innovation, user-innovation, and free innovation as the main keywords, which provided 206 results. Further studies resulted from combinations of 14 different but related keywords. The first step was combining the first group of keywords, namely user driven, user-driven, customer driven, customer-driven, user involvement, and customer involvement, with the second group of keywords, which were innovation and innovate. Subsequently, a few more keywords were added to a first group, including user collaboration and customer collaboration, and co-creation, co-development, new product development and new service development were added to the second group. Two Boolean search strings were used including all 14 keywords with distinct combinations. For example, (user-driven *AND innovation), (customer driven *OR customer-driven), AND (co-creation *OR co-development) in Web of Science. Only articles published in scientific journals were considered, whereas book chapters and conference papers were not included. The total number of entries using the 18 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 Figure 1: Evolution waves of UI literature Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 19 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature keywords was nearly 700. We reviewed titles, journals, and abstracts in order to exclude completely unrelated papers. In the first filtering process, 355 papers were excluded because they were purely in technical (e.g., information and communication technologies) and healthcare areas and were published in journals providing no contribution to the managerial and organizational literature. We eliminated papers that dealt not with user innovation specifically but with innovation in general. Through this filtering process, we narrowed our database to 345 articles. After retrieving the papers, bibliographic data (title, author, journal, year of publication, and abstract) were exported to an Excel table. In the next step, the whole contents of the remaining articles were scrutinized in terms of their conceptual, theoretical, and empirical development and were graded from 1 to 5 in order to determine how close each article was to the UI topic, where 1 denoted the papers least related to UI and 5 denoted the highest closeness. For this filtering, precise exclusion criteria were applied to isolate just the articles precisely focusing on UI. These criteria were chosen empirically based on an analysis of the papers remaining in the dataset. No prior criteria were applied in this phase. The most important reasons for excluding further papers were the following: 1) the paper focused on innovation practices not strictly related to UI; 2) the paper was grounded in the open innovation theoretical framework but did not deal specifically with UI; 3) the paper dealt with user experience and not with the direct involvement of the user; 4) the paper was related to the role of users as innovators in computer science and healthcare, but had little contribution to the managerial literature on UI overall; and 5) the paper was about buyer-supplier collaboration in a B2B context and typically during a new product development phase. The articles were graded separately, and the articles not reaching a threshold of 3 out of 5 were excluded from the review. As a result of the second filtering process, the number of articles decreased to 275. All the papers were read in full and sorted out. In order to identify the main streams of research within the UI literature, papers were coded based on 10 criteria: 1) Article type: The studies were sorted into three main kinds, empirical, con- ceptual, and review papers. 2) Methodology: Empirical papers were conducted in qualitative and quantitative ways. 3) Method: Various methods were used in sample empirical articles, including case study, survey, interview, ethnography, netnography, experimental design, mixed methods, etc. 4) Innovation type: Because collaborating with users leads to numerous innovations in products, services, and processes, the papers were divided into incremental and radical innovation types. 5) User type: Users who collaborated on innovation activities within these articles were separated into lead users and ordinary or everyday users. 6) Collaboration type: User engagement is possible in two main types, individual engagement and collaborating in the community of users. 7) Industry type: Generally, industries in which UI practices have been conducted include manufacturing and service industries. 8) Industry activity: More specifically, papers were sorted based on activities of each industry type in order to discover in which sectors UI has been carried out. 9) Firms' age: Sample firms comprised startups and established firms. 10) Incentive type: Due to the importance of incentives which motivate users to participate in innovation activities, we classified studies dealing with incentives in terms of extrinsic and intrinsic motivations. 4. RESULTS 4.1 Descriptive results Notwithstanding its long history, UI is a phenomenon that started collecting considerable attention in the literature only in 2008 (this research analyzed papers to the end of 2017). Descriptive results show that empirical papers represent almost four out of five papers (75%), whereas theoretical papers were fewer (19%). The remainder are reviews of previous literature. Regarding the methodologies used in the (empirical) articles, qualitative research is the most popular (43.9%), and quantitative methods hold the second position. Among the methods of analysis used, case studies (39.1%) and surveys (30.4%) are the most widespread methods. During recent years, the use of mixed methods has grown significantly, and currently accounts for more than 20% of research studies. Other methods of collecting data (such as ethnography, netnography, in- 20 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 terview, experimental design, focus group, action research, and secondary data) are used less frequently in the papers analyzed. For the types of innovations involved in the study, the majority of papers (70%) deal with cases of radical innovation (RI), whereas a smaller percentage focus on both radical and incremental innovation. Lead users are at the center of at least half of all the articles. Not surprisingly, just 22.3% of studies focus on the everyday user as the only sources of innovation. Collaborating with firms and users is done extensively within communities (61.4%), and individual collaboration is less common (25.7%). UI practices have been implemented in different types of industries since their emergence. A large number of studies, especially during the last few years, conducted UI studies in service firms (38.4%). To better understanding the implementation of UI, we classified the specific activities of both service and manufacturing firms for all sample articles. The results showed that most of firms within these industries were incumbent firms (83%) and startups were studied only in few papers (6.4%). When considering incentives of collaboration, a wide variety of studies consider a combination of extrinsic and intrinsic incentives to motivate users (61%), whereas extrinsic incentives alone (26.8%) and intrinsic motives alone (12.2%) are used less frequently. Intrinsic incentives include aspects such as fun, altruism, sense of efficiency, etc., whereas extrinsic incentives refer to monetary rewards, career prospect, using free services and products, etc. Table 1 summarizes the descriptive characteristics of the papers considered in this review, the list of journals with the most published articles, and the distribution of industries with higher repetition among papers. 4.2 UI research streams On the basis of our literature review and coding procedure, we categorized the existing literature on UI into two general streams of research: (1) papers dealing with external-to-the firm conditions, accounting for 94% (258) of the papers included in this review, and (2) papers dealing with internal-to-the firm conditions, corresponding to the remaining 6% (17). We further categorized the papers within each stream and identified three categories in each. For the papers dealing with external conditions we distinguished between: a) Innovation-related papers. These papers deal mainly with the types of innovation (such as radical or incremental) or the type of products (goods, services, or mixed) involved in the innovation process. We found 93 papers dealing with this topic, corresponding to 34% of the total. b) Users-related papers. These papers deal mainly with the different characteristics of users (lead users and everyday users); the role of users in the process of UI, both individually or on web-based platforms facilitating such processes; and incentive systems. In total, we found 158 papers, 57% of the literature. c) Context-related papers. These papers deal with the sectoral and the contextual conditions (location or ecosystem) that trigger, support, or hamper the deployment of UI strategies. Only approximately 3% of the papers were in this category. For the papers dealing with internal conditions, despite their limited number (17 papers), it seemed reasonable to divide them into the following categories: d) Strategy-related papers. These papers deal with the strategic aspects of UI, such as business modeling, customer interaction as a strategy, or the relationship between UI and performance. We assigned two papers to this category. e) Organization-related papers. We grouped under this category all the papers dealing with organizational aspects (such as routines, organizational structures, and processes) that represent preconditions to the effective deployment of a UI strategy. We attributed eight papers to this category. f) Management-related papers. We included in this third group all the papers dealing with the management of the process itself of UI, the resources, and the capabilities needed to manage in an effective way the process of UI. We found seven papers belonging to this third category. Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 21 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature Table 1: Descriptive results of sample articles Classification variable Values N % 1. Paper type Empirical 207 75 Conceptual 51 19 Review 17 6 2. Methodology Qualitative 91 43.9 Quantitative 75 36.2 Mixed 41 19.8 3. Method (the most common) Case study 81 39.1 Survey 63 30.4 Mixed 47 22.7 Interview 7 3.4 4. Innovation type Radical 28 70 Mixed 12 30 5. User type Lead user 60 49.6 Mixed 33 27.3 Everyday user 27 22.3 6. Collaboration type Community 86 61.4 Individual 36 25.7 Mixed 18 12.9 7. Good type Service 84 38.4 Mixed 63 28.8 Manufacture 55 25.1 8. Industry (most frequent) Sporting goods 12 5.5 Telecommunication 10 4.6 Information technology firms 10 4.6 Software 9 4.1 Computer game industry 8 3.7 9. Firm age Incumbent 78 83 Mixed 10 10.6 Start-up 6 6.4 10. Incentive type Mixed 25 61 Extrinsic 11 26.8 Intrinsic 5 12.2 11. Journal (most publications) Journal of Product Innovation Management 29 10.5 Research Policy 14 5.1 Management Science 10 3.6 Creativity and Innovation Management 9 3.3 4.2.1 External-to-the-firm conditions Research stream 1: Innovation-related theme Papers in the first research stream - innovation-related - specifically focus on innovation itself. Thus, the role of users as innovators is mainly related to the type of innovation involved, whether it be radical, incremental, disruptive, or other. A common theme within this stream is related to innovation type: radical or incremental. There are not many studies in the literature which explore the degree of innovativeness of user-generated innovations. Radicalness of innovations and finding new solutions have always been a critical topic for UI scholars. Various scholars proposed definitions for radical innovation, which in general refers to creating new products that offer long-term sale po- 22 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 tential rather than just improving the product (Skiba & Herstatt, 2009). On the other hand, radical innovations are also connected with service innovation in a way that separates previous practices and results in fundamental changes in organizational activities (Perks, Gruber, & Edvardsson, 2012). Incremental innovations alone are not sufficient for firms in developing and quickly changing technology, and one important factor is choosing the right user at the right time and in the best form (Lettl, 2007). The characteristic of users is a determinant element which contributes to the development of radical innovation (Lettl, Herstatt, & Gemuenden, 2005). Accordingly, due to differences between the profiles of users who contribute to RI and of others involved in conventional marketing research, firms seeking RI need to apply different marketing inquiry approaches. Exploring the techniques of providing radical changes, the lead-user method (von Hippel, 1986) and user toolkits (Herstatt & von Hippel, 1992; Oliveira & von Hippel, 2011) have been proposed as the most widespread techniques. Candi, van den Ende, and Gemser (2016) made a distinction between utilitarian radicalness, which refers to innovation in technology and functionality, and he-donic radicalness, which delivers new meanings and values to products and services. Because radical and incremental innovation are complementary concepts, a high percentage of studies compared the two types of innovation with each other. The results of a study of a motor insurance company as a financial sector revealed that the sequence of micro-level activities related to incremental innovation in the co-creation process results in radical innovation, which indeed requires more managerial attention (Perks et al., 2012). Online and offline collaboration are two modes of involving users; online collaboration increases the probability of introducing incremental innovations, whereas offline collaboration increases the probability of introducing radical innovations in an ICT sector (Ryzhkova, 2012). Incremental innovation is considered as more frequent and customary innovation, through which both business and individual users develop upon the work of producers and other groups of users (Bogers & West, 2012). Fuller and Matzler (2007) found that listening to customers closely will end up creating some incremental innovations, but virtual customer integration provides an opportunity to come up with really new products in order to satisfy customer needs. Notably, the type of innovation is a key factor in selecting the co-creation and communication process. Gustafsson et al. (2012) concluded that frequency, direction, and content of co-creation have the same positive effect on the product and market success in incremental innovation, whereas in radical innovation, project frequency has a positive effect and content has a negative significant effect on product success. In a study of the kayak industry, innovation moved from radical to more incremental and customer-oriented innovation by adapting the equipment to general customers and amateurs. As a result, the manufacturer could sell new products and designs to more customers every year and improved the commercialization process (Hienerth, 2006). Studies of this stream demonstrate that design, products, and product concepts that are created together with users fit user needs' better (Pals, Steen, Langley, & Kort, 2008); these studies also outline the positive effect of UI on service sectors, such as the positive direct effect on technical quality and innovation speed (Carbonell, Rodriguez-Escudero, & Pu-jari, 2009). Recently, scholars have determined the important role of users in sustainable product and service innovation in addition to radical and incremental attributes (Nielsen, Reisch, & Thogersen, 2016; Parmentier & Gandia, 2013). Research stream 2: User-related theme Papers belonging to the second research stream - users-related papers - are the most consistent in number. Along with this stream, three sub-themes of research were identified. The first sub-theme deals with different types of users: lead users and ordinary or everyday users. Studies dealing with lead-users and their characteristics prevail in absolute terms. A lead user has been defined as a user "(1) who has needs in a particular area before the rest of the market and (2) gain benefits from obtaining a solution and try to innovate" (von Hippel, 1986:796). The primary studies focused on the role of lead users in marketing activities and new prod- Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 23 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature uct development such as testing the impact of lead-user participation in the development of industrial products (Urban & von Hippel, 1988). Similarly, Herstatt and von Hippel (1992) showed that the lead-user method could bring positive results in a low-tech industry despite having users without technical training. A large body of literature has investigated the lead-user concept within consumer products. As an example, lead users considerably contribute to the innovation process of sport equipment; for example, in the case of kitesurfing equipment, it has been proven that two main characteristics of lead users, being ahead of the trend in the market and having high expectations of benefits, result in appealing commercial innovations (Franke, von Hippel, & Schreier, 2006). The search for antecedents and consequences of consumer lead users explained that antecedents of the process are consumer knowledge, using experience, the locus of control, and in-novativeness as requirements to identify users. Investigation of the consequences of the lead-user method revealed that lead users do not only participate in the idea generation process, but they also adopt new products more heavily and more quickly (Schreier & Prugl, 2008). User expertise and motivation, extreme user needs, opinion leadership, and commitment have been proposed as other characteristics of lead users in addition to being ahead of the market and having high expectations of benefits (Brem & Bilgram, 2015). Moreover, studies indicate that lead users exhibit some new behaviors, such as participating in online communities, according to the cultural changes triggered by social media. Consequently, lead users were assigned to problem-solving stages of developing new products, including three phases of problem detection, analysis, and removal. Inventive users have some common characteristics with lead users but have a definition beyond the traditional lead user. Lettl et al. (2005) characterized inventive users as those who 1) have high motivation for the development of new solutions, and 2) face the need with extremely high precision. Surprisingly, the outcomes of a study of the role of lead users in the different stages of problem-solving of new product development demonstrated that the interference of lead users in each stage of the innovation problem-solving process decreased productivity in spite of providing desirable products (Colazo, 2014). On the other hand, some empirical and conceptual articles studied general and everyday users' characteristics and their input in generating new ideas. Ordinary students who were in charge of designing watches using toolkits could bring heterogeneous designs to market and increased significantly user willingness to pay high prices for them (Franke & Piller, 2004). According to Magnusson, Matthing, and Kristensson (2003), ordinary users created more original ideas than did professional users during service innovation development due to a higher level of creativity. Kristensson et al. (2004) claimed that professional developers and advanced users generated more realizable ideas, and ordinary users provided the most valuable ideas. Given the increasing role of users in service development, Magnusson (2003) studied ordinary users and professionals in the service innovation process and showed that ordinary users provided more creative and novel suggestions than did professionals, but professionals made easier ideas to produce. Despite the originality and value of ordinary users' ideas, users could not be expected to come up with ideas that immediately go to the production phase, but basically they are sources of inspiration and information of users' needs (Magnusson, 2009). The second sub-theme sheds light on the types of collaboration between firms and users and holds a significant position within studies of individual and community-based collaboration. According to Baldwin and von Hippel (2011:9) "a single user innovator is a single firm or individual that creates innovation in order to use it." Individual users have been identified as drivers of many developments in sports products (Hienerth, 2006) and consumer products (Flowers, von Hippel, de Jong, & Sinozic, 2010). In a single case study, Hennala and Melkas (2016) emphasized the importance of formulating a collective voice of individual users and a deeper understanding of users' experiences to foster service innovation. Involving few users mostly has been common in the lead-user method, through extremely advanced users eager to create novel and radical innovations which are quite practical for projects with a limited time domain (Keinz et al., 2012). 24 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 Despite the critical role of individual users, it has proven that the group of users can be much more efficient than specialized producer innovators (Hienerth et al., 2014). Communities are no longer a place just for lead-user activities; the presence of potential and the expertise of multiple users also are necessary for the innovation process (van Oost, Verhaegh, & Oudshoorn, 2009). The internet allows less costly collaboration with a large number of customers through virtual customer integration (VCI) and making use of customers' know-how, creativity, and judgment (Bartl, Fuller, Muhlbacher, & Ernst, 2012). Therefore, user communities and platforms (normally online) have been identified as a promising approach that provides the opportunity to exchange ideas among users and generate innovative ideas around a specific theme or topic (Harhoff, Henkel, & von Hippel, 2003; von Hippel, 2007). Platforms are defined as "the nexus for the aggregation and integration of different members (individuals and companies) in an innovation community, permitting access to a large pool of experts and contributors, benefiting from proximity to customers and user innovations and avoiding a local search bias in innovation" (Battistella & Nonino, 2012:2). Exploring the "propellerhead" community as a case study, Jeppesen and Frederiksen (2006) investigated the motivation and characteristics of users who participate in such communities and found that the motives lie in three groups: 1) being a hobbyist, 2) a response to firm recognition, and 3) trying to be a lead user. Promising examples of such communities include mystarbucksidea.com (Lee & Suh, 2016; Sigala, 2012), the Dell IdeaStorm community (Bayus, 2013), and salesforce.com (Li, Kankanhalli, & Kim, 2016), which aim at improving the effectiveness of new service and product development. Interaction among participants, information exchange, mutual support, community building, and cooperation among users in online contest communities lead to better and more innovations (Fuller et al., 2014). Another type of such communities is virtual brand communities, in which consumers manifest loyalty, satisfaction, empowerment, connection, emotional bonding, trust, and commitment (Brodie et al., 2013). Furthermore, user toolkits became widespread, which are defined as tools that "allow manufacturers to actually abandon their attempts to understand user needs in detail in favor of transferring need-related aspects of product and service development to users along with an appropriate toolkit" (von Hippel, 2001:247). Such user-friendly tools let users design their own preferred products and services (von Hippel & Katz, 2002). User toolkits have been applied not only by end users (Jeppesen, 2005; von Hippel, 2001; von Hippel & Katz, 2002); such toolkits are also aimed at various general users (Franke, Keinz, & Schreier, 2008; Franke, Keinz, & Steger, 2009; Goduscheit & Jorgensen, 2013). Toolkits for user innovations are considered also as a powerful marketing tool (Franke & Piller, 2004) to achieve mass customization and, in contrast to the lead-user method and user communities, do not focus only on radical new ideas (Keinz et al., 2012). One further sub-theme of papers in this stream focuses on the process of stimulating users using different types of incentives. Generally, the literature shows that motivations for participating in the UI process fall into two groups, extrinsic and intrinsic incentives. Fuller (2010) proposed that users' decisions to engage in innovation activities are based on a combination of intrinsic (fun and altruism), internalized extrinsic motives (learning and reputation), and entirely extrinsic motives (payment and career prospects). In a study exploring the motivations to take part in platforms, drivers were categorized as intrinsic-individual motivation, intrinsic-social driven motivation, extrinsic economic motivation, extrinsic professional motivation, and extrinsic social motivation (Battistella & Nonino, 2012). Nambisan and Baron (2009) further detailed users' incentives and motives by proposing four groups of them: cognitive or learning benefits (product-related learning), social integrative benefits (sense of belongingness and social identity), personal integrative benefits (reputation or status and the sense of self-efficacy), and hedonic benefits (pleasure and enjoyment). In contrast, Luthje (2004) underlined the importance of non-financial rewards. Luthje specified that financial motives cannot distinguish between innovating and non-innovating users, and there are fulfilled needs in the market that stimulate users to innovate. Based on the results of Luthje's research in the case of the outdoor industry, having more fun or being Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 25 Khatereh Ghasemzadeh: Internal and External Perspectives on User Innovation: What Was Left Behind? A Review of Current Literature faster and safer during sports activities are the main motives. Similar results showed that the engagement of customers in virtual product development is not motivated by monetary compensation or reputation. Instead, users participate for the possibilities of product development (Fuller, Faullant, & Matzler, 2010). Research stream 3: Context-related theme Studies focusing on the contextual elements of UI are still rare. Research within this stream has focused on the environmental and contextual dimensions covering the conditions of various sectors and industries, technological and scientific changes, marketplace fluctuations, policy making, competitors, etc. These elements are not usually the only effective factors in UI, but provide a complementary role. Context factors impact the roles of users and innovation activities in different direct and indirect ways which mostly are out of control of the firms. Addressing the uncertainty in an environment involving the unavailability of resources, instability, and unpredictability of markets, changing government regulations is of significant importance in user involvement (Gales & Mansour-Cole, 1995). Carbonell et al. (2009) investigated the impact of technological uncertainty on customer engagement and found that technological novelty and technological turbulence affect the process of involving the customer in a positive way. Different sectors have diverse conditions and prerequisites for UI practices. Specifically, Alves (2013) identified that co-creation of value in the public sector fosters radical and discontinuous innovation through integrating citizen potential and knowledge; however, this specific sector suffers from some weaknesses such as resource limitation and citizen contests that effect the process in a negative way. Correspondingly, some other sectors, such as the electricity sector, are characterized by slow-moving and challenging attributes for UI activities; however, users have inspired innovation even within this sector (Heiskanen & Matschoss, 2016). Heiskanen and Repo (2007) indicated that, in general, micro-sociological processes, market power, and the competitive environment affect user innovations both positively and negatively. Van Doorn et al. (2010) studied the antecedents and consequences of the customer engagement behavior process, and revealed some interesting results about context-level factors. The most affecting context-level factors include the political and legal environment which encourage or prevent the information flow, natural events, media attention, and competitive marketing atmosphere. UI has been affected by technological improvements in a positive way by, for instance, providing an opportunity for even older people to design new products and services (Ostlund, Olander, Jonsson, & Frennert, 2015). Furthermore, modern technologies such as wikis and the mobile environment let users collaborate with firms easily (Wagner & Majchrzak, 2006; Wong, Peko, Sundaram, & Piramuthu, 2016). Technologies shift the business process to consumers, who can communicate, collaborate, and make decisions with the help of new technologies such as Web 2.0 (Nambisan & Nambisan, 2009). Most papers (57%) studied the user stream, and papers within the innovation stream held the second position (34%). As mentioned previously, papers dealing with the context level consider contextual factors as complementary conditions to apply UI practices. Papers solely contributing to this stream comprised only 3% of all papers, but in approximately 15% of papers, context-level factors were studied along with other streams. The contributions of the most relevant papers of external-to-the-firm studies are provided in Table 2. 4.2.2 Internal-to-the-firm conditions Studies focusing on internal-to-the firm conditions are much fewer than studies focusing on external dimensions, and started to gain attention very recently. We divided this stream of studies into three sub-streams. Research stream 4: Strategy-related theme Among studies dealing with internal issues of organizations, less present are papers dealing with strategy-related issues (fourth stream). In particular, we found only two papers dealing with strategic aspects of UI. The first contribution, by Kristensson, Matthing, and Johansson (2008), proposed a conceptual framework and defined key strategies to pur- 26 Dynamic Relationships Management Journal, Vol. 8, No. 2, November 2019 sue the successful involvement of users in the process of new product development. They suggested that firms ought to provide an opportunity for users to understand their latent needs and play various roles, consider different users' situations, use analytical tools and benefits, escape from brainstorming, and provide heterogeneity. A second contribution, by Baldassarre, Calabretta, Bocken, and Jaskiewicz (2017), consists of a theoretical contribution coupled to a qualitative study and deals with business models and UI. In particular, they suggested that the creation of sustainable value propositions through products and services takes place in a repetitive and long process of talking, thinking, and testing. Table 2: Articles reviewing external-to-the-firm conditions Categories Author Contribution Lettl (2007) - Provides insights into the interaction dimension of user involvement competence for radical innovations. - Contributes to the development of a more taxonomic approach to the firm and integrates qualified users in the radical innovation process » Skiba and Herstatt (2009) - Highlights the impact of radical innovation on the service industry - Proposes that service providers should focus their efforts on integration of the right users early in their innovation process a p ■c e t TO o c c Perks et al. (2012) - Mentions that co-creation develops an interactional process of inducing and visualizing innovative behavior of the actors - Proposes that in order to achieve radical innovation, a sequence of incremental innovations is required and advances knowledge of the way co-creation occurs in radical service innovation Candi et al. (2016) - Introduces two different kinds of radicalness: 1) hedonic, which refers to the degree to which an innovation is novel in terms of technology and functionality; and 2) utilitarian, which concerns sensorial, emotional, or symbolic aspects - Emphasizes that collaborating with users is moderated positively by utilitarian radicalness, but hedonic radicalness moderates the co-creation process negatively Magnusson (2003) - Stresses that users engaging in a service innovation process offer more original and valuable proposals than do professional developers - Outlines that the technical abilities of professional developers limit them in developing creative ideas s r e p a p Lüthje (2004) - Summarizes the characteristics that distinguish innovating from non-innovating users - Argues that the benefits which the users expect from using their innovations and their level of expertise discriminate between users - Identifies that new needs, dissatisfaction with existing products, financial reward, fun, experience, and product-related knowledge determine the participation of users e t TO _