Eric von Hippel (von Hippel 1986) of MIT and others observed that many products and services are actually developed or at least refined, by users, at the site of implementation and use. These ideas are then moved back into the supply network. 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 innovators will share their ideas with manufacturers in hopes of having them produce the product, a process called free revealing.
Based on research on the evolution of Internet technologies and open source software Ilkka Tuomi (Tuomi 2002) further highlighted the point that users are fundamentally social. User innovation, therefore, is also socially and socio-technically distributed innovation. According to Tuomi, key uses are often unintended uses invented by user communities that reinterpret and reinvent the meaning of emerging technological opportunities.
The existence of user innovation, or example, by users of industrial robots, rather than the manufacturers of robots (Fleck 1988) is a core part of the argument against the Linear Innovation Model (Williams 1996) i.e. innovation comes from research and development, is then marketed and 'diffuses' to end-users. Instead innovation is a non-linear process involving innovations at all stages
User innovation has a number of degrees: innovation of use, innovation in services, innovation in configuration of technologies, and finally the innovation of novel technologies themselves. While most user innovation is concentrated in use and configuration of existing products and technologies, and is a normal part of long term innovation, new technologies that are easier for end-users to change and innovate with, and new channels of communication are making it much easier for user innovation to occur and have an impact.
Recent research has focused on Web-based forums that facilitate user (or customer) innovation - referred to as virtual customer environment, these forums help companies partner with their customers in various phases of product development as well as in other value creation activities. For example, Threadless, a T-shirt manufacturing company, relies on the contribution of online community members in the design process. The community includes a group of volunteer designers who submit designs and vote on the designs of others. In addition to free exposure, designers are provided monetary incentives including a $2,500 base award as well as a percentage of T-shirt sales. These incentives allow Threadless to encourage continual user contribution 
See also 
- Open Design
- Creativity techniques
- Virtual customer environment
- List of emerging technologies
- Participatory design
- Professional amateurs
- Toolkits for User Innovation
- Domestication theory
- Science and technology studies
- Bogers, M.; Afuah, A.; Bastian, B. (2010), "Users as innovators: A review, critique, and future research directions", Journal of Management, 36 (4): 857–875.
- Tuomi, I: Networks of Innovation, chapter 2. Oxford University Press, 2002.
- Magee,Joe. "The Contribution Revolution: Letting Volunteers Build Your Business", Harvard Business Review, October 2008.
- Bilgram, V.; Brem, A.; Voigt, K.-I.: User-Centric Innovations in New Product Development; Systematic Identification of Lead User Harnessing Interactive and Collaborative Online-Tools, in: International Journal of Innovation Management, Vol. 12 (2008), No. 3, pp. 419–458.
- Bogers, Marcel; Afuah, Allan; Bastian, Bettina (2010), "Users as innovators: A review, critique, and future research directions", Journal of Management 36 (4): 857–875, doi:10.1177/0149206309353944
- Braun, Viktor R.G. (2007): Barriers to user-innovation & the paradigm of licensing to innovate, Doctoral dissertation: Hamburg University of Technology
- Fleck, James (1988), "Innofusion or Diffusation? The nature of technological development in robotics", Edinburgh PICT Working Paper No. 7
- Nambisan, Satish; Nambisan, Priya (2008), "How to Profit from a better Virtual Customer Environment", MIT Sloan Management Review: 53–61
- Tuomi, Ilkka (2002), Networks of Innovation, Oxford University Press, ISBN 978-0-19-925698-3
- von Hippel, Eric (2005), Democratizing Innovation, MIT Press
- von Hippel, Eric (1986), "Lead users: a source of novel product concepts", Management Science 32 (7): 791–805, doi:10.1287/mnsc.32.7.791
- Williams, R; David Edge (1996), "The Social Shaping of Technology", Research Policy 25: 856–899
- New York Times on User Innovation (2007)
- New York Times on User Innovation (2005)
- Eric Von Hippel's books on user innovation, available under the creative commons license.
- The Contribution Revolution wiki collects information about user contribution systems in the business world. It is based on the *Harvard Business Review article of the same name by Scott Cook
- Threadless, a t-shirt company completely driven by user innovation