Following up on Igor's post about user-centered innovation:

Clear Ink's Kiwini Oe participated in a focus group conducted by Avaty's Rein Spire, a grad student from Innsbruck researching innovation management in virtual worlds.

Rein Spire introduces the topic to the group:

"Companies now start to integrate their customers into their development process of new products, because they strive to develop and produce exactly what customers want. Compared to traditional market research, toolkits that draw on ideas of innovative customers exist. Examples for Open Innovation projects are platforms where customers can develop their own products and bring in their own ideas. I guess not only to me, Second Life offers enormous potential for the development of innovative real life products."

The transcripts are available here.

Remember user generated content? That was yesterday. The new cool thing is user generated innovation. Tap into the minds of the crowds.
"In an array of industries, producer centered innovation is being eclipsed by user-centered innovation-the dreaming up, development prototyping, and even production of new products by consumers." writes Eric von Hippel in a February issue of Harvard Business Review. Internet, with its inherent ability to herd like-minded people, has accelerated this phenomenon.

CrowdSpirit has taken the lead in letting others take the lead. You can invent, design and manufacture future electronic products with other like-minded spirits.

Here is the idea in their own words:
"1. Submit an idea of a new innovative electronic product.
2. Vote, define specification, or even invest money on products.
3. Once finalized, test and recommend products to retailers."
and finally " Based on your contribution to the project, earn a share of the product revenue."

At another site, Cambrian House, you can submit your business ideas for any project under the moon - or maybe even beyond.

These initiatives are fresh, so the verdict about their potential is still out. But before we will be looking at massive layoffs at R&D facilities around the world, listening to end users, tapping into their opinions and ideas, could tremendously benefit every manufacturer or service provider today.