Innovation development, production, distribution and consumption networks can be built up horizontally -with actors consisting only of innovation users (more precisely, "user/self-manufacturers"). Some open source software projects are examples of such networks, and examples can be found in the case of physical products as well. In this paper we discuss three conditions under which user innovation networks can function entirely independently of manufacturers. We then explore related empirical evidence and conclude that conditions favorable to horizontal user innovation networks are often present in the economy.

Innovation development, production, distribution and consumption networks can be built up horizontally -with actors consisting only of innovation users (more precisely, "user/self-manufacturers"). "Free" and "open source" software projects are examples of such networks, and examples can be found in the case of physical products as well.User innovation networks can function entirely independently of manufacturers when (1) at least some users have sufficient incentive to innovate, (2) at least some users have an incentive to voluntarily reveal their innovations, and (3) diffusion of innovations by users is low cost and can compete with commercial production and distribution. When only the first two conditions hold, a pattern of user innovation and trial and improvement will occur within user networks, followed by commercial manufacture and distribution of innovations that prove to be of general interest. In this paper we explore the empirical evidence related to each of these matters and conclude that conditions favorable to user innovation networks are often present in the economy.

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