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User innovation is a common activity in Canadian manufacturing plants

This paper uses business data where users are the people in a firm carrying out various activities In 2007, one in five (20.7%) manufacturing plants that had introduced advanced technologies were technology modifiers and an equal proportion (21.8%) were technology developers. Taken together, this provides an indicator for user-innovation with four in ten (42.5%) manufacturing plants that introduced advanced technologies having carried out user-innovation in 2007.

The first survey of user innovation has successfully shown that respondents are able and willing to complete questions on user innovation activities and has resulted in some metrics on this activity.

User innovation is more likely to be carried out continuously when there is a formal program of technology adoption

Almost half (48.0%) of user innovators indicated that they developed new technologies or modified an existing technology occasionally and as part of an informal program of technology adoption. User innovators that carried out user innovation as part of a formal program of technology adoption were twice as likely to carry out these activities continuously rather than occasionally. Both technology developers and technology modifiers that develop or modify technologies as part of a formal program of technology adoption were more likely to carry out user innovation continuously. Those with informal programs of technology adoption were more likely to carry out user innovation on an occasional basis. This suggests that a formal program of technology adoption may promote continuous innovation.

Internal funding is the primary source of funding for user innovation

The vast majority (98.4%) of user innovators fund their user innovation projects internally. Further, three of every four user innovators (76.4%) rely exclusively on internal sources of funding for their user innovation projects.

Technology modifiers are more likely than technology developers to exclusively fund user innovation internally. Almost seven in ten (69.3%) technology developers only indicated internal funding for their user innovation compared to more than eight in ten technology modifiers (83.3%). This suggests that technology developers have more linkages in the innovation system than technology modifiers.

Technology developers are twice as likely as technology modifiers to have multiple sources of funding and are more likely than technology modifiers to have external sources of funding for their user innovation projects.

Cooperation on user innovation projects is common, more so than for innovation in general

Six in ten (60.2%) user innovator respondents cooperated with other plants, firms or institutions to develop new or modify existing technologies, three times the rate of cooperation among innovators in general (21.5%). Cooperation on user innovation projects is more likely among technology developers than modifiers. Technology developers are likely to have a larger number of types of cooperation partners than technology modifiers.

Cooperation creates linkages between user innovators and other actors in the innovation system

More than four out of five technology developers and modifiers cooperated with suppliers, making them the most likely partner for both types of plants and creating linkages in the innovation process.

User innovations are being shared, most commonly at no charge

About one in five (18.0%) user innovators shared their user innovations with other firms or institutions with more than half (53.7%) of these plants choosing to share in order to allow a supplier to build a more suitable final product. The most common way to share for both technology modifiers and technology developers is at no charge.

User innovations are being diffused in the Canadian economy

One in four (26.3%) user innovators indicated that their user innovations were adopted by another manufacturing firm to produce and supply the new or modified technology and one in four (25.3%) indicated their user innovations were adopted by other firms. This evidence of innovation diffusion makes user innovators an important actor in the innovation system.

Use of intellectual property protection appears to increase the likelihood of sharing

More than half (53.3%) of user innovators used some method to protect the intellectual property resulting from their user innovations. Technology developers were more likely to protect the intellectual property, with six in ten (60.3%) respondents indicating they protected the intellectual property resulting from their user innovations compared to less than half (46.4%) of technology modifiers. Technology developers and technology modifiers who shared their user innovations were more likely than plants that did not share to protect their intellectual property. What is not known is whether the user innovation that was shared was protected.

User innovation is more costly for technology developers than for technology modifiers

Information on the most recent user innovation indicates that most user innovation projects took form 2 months to 2 years to complete. Technology developers are more likely than technology modifiers to take upwards of 6 months in elapsed time to complete their most recent project compared to technology modifiers who were more likely than technology developers to take 6 months or less. Further, the average total cost of user innovation (including labour and machinery, equipment, and materials) was 59.7% higher for technology developers compared to technology modifiers.