Communities of Creation: Managing Distributed Innovation in Turbulent Markets

Abstract

We describe a new model for managing distributed innovation, called the community of creation. The community of creation is a governance mechanism for managing innovation that lies between the hierarchy-based (closed) mechanism and the market-based (open) mechanism for innovation management. The community-centric model shifts the locus of innovation beyond the boundaries of the firm, to a community of individuals and firms that collaborate to create joint intellectual property. A community of creation requires an identified sponsor, a set of ground rules for participation, and a system for managing intellectual property rights. We argue that the community of creation model allows innovation to proceed in a complex environment by striking a balance between order and chaos. We draw upon several theoretical domains to define and develop the community of creation model. We present detailed case studies from the computer industry to highlight the differences among the different approaches to innovation management. We also discuss the opportunities and the unresolved issues of the community of creation model for practitioners as well as for academics.