MIT’s Technology Review has some interesting survey results in the article Tapping the Innovative Masses:

“We found that 6.2 percent—representing 2.9 million people, or two orders of magnitude more than are employed as product developers in the U.K.—created or modified consumer products over the past three years and spent 2.3 billion pounds per year, more than double what the U.K. firms spent on consumer-product R&D.”

A lot of this tinkering was quite sophisticated, such as adding new spin cycles to washing machines etc.  The question is how to tap into this huge volume of product ideas – some of them innovative.  In many cases, even if the ideas are not innovative, they can significantly cut down on development time.  However, the volume of ideas generated by such a process is so large, most companies will have trouble keeping up with them.  Also, since most tinkerers do not have quality control processes, building products on their developments is quite difficult as well.  Finally, as we have discussed in the past, collaborations with customers often tend to not be as value added as they could be.

Fortuitously, NY Times shares Microsoft’s approach to accessing innovations from the masses in the article Microsoft’s Effort to Build Apps and Reward Engineers:

“Because the platform is new, developers have to learn its ways before writing many of those apps. So to add them quickly, Microsoft has taken an unusual step. It has relaxed a strict rule and will let employees moonlight in their spare time and keep the resulting intellectual property and most of the revenue, as long as that second job is writing apps for Windows Phone 7-based devices.”

Clearly, Microsoft has not tapped the mass of people out there, but they are encouraging their employees to innovate and keep a larger fraction of the economic value they generate.  Their approach is quite attractive because:

• Innovations are coming from employees, hence, Microsoft can have some confidence in the quality
• Apps are separate from Microsoft products (Windows Phone 7), Microsoft has an easier time separating intellectual property and brand image
• Revenues from the apps can be tracked separately, it is possible for Microsoft to compute economic value (MS offers 70% to employees and keeps 30%)
• App development will help employees identify useful updates and upgrades to the OS, and guide innovation

“Engineers work all hours; they don’t punch a 9-to-5 clock,” Professor Cusumano said. “Normally, you want your employees to pour their passions into their jobs. If they do something else on the side, you don’t cheer them on.”

The second being bandwidth.  If employees are developing the OS full-time as part of the job and then developing apps during their free time, will they have enough energy left to be creative and innovative?  How much work load is too much?