Eric von Hippel (born August 27, 1941) is an American economist and a professor at the MIT Sloan School of Management, specializing in the nature and economics of distributed and open innovation.

After pursuing several inventions post undergraduate, Eric returned to school for his Masters in Mechanical Engineering at MIT.

From there, he went on to start his own company, worked at management consultant McKinsey and Co., and eventually studied at Carnegie Mellon University for his Ph.D. in Innovation.

For example, products developed and sold by producers are typically intended to profitably serve the average needs of a wide range of people, and therefore may fit the needs of specific customers only approximately.

In contrast, producers must wait for evidence that there is a general and profitable market to be served before they can justify investing in a new type of innovation.

For example, a study of 500 patients with chronic diseases found that 8% of these individuals or their informal family caregivers had developed solutions that were both valuable to themselves, and novel to medical practice.

For example, in a study of the sources of important retail and commercial banking services, it was found that about half were first developed by users.

It centrally involves a systematic networking process in which a searcher sequentially contacts and interviews experts who may know of lead users who have developed valuable innovations.

[11] More recently, artificial intelligence methods have been developed to economically screen massive amounts of user-generated content posted on the internet to identify valuable user-developed innovations.

[12] Eric von Hippel and his colleagues have conducted a series of national surveys to identify the amount and importance of innovation being developed by consumers for their own use.

An important, top-level finding from these studies is that the level of household sector innovation development by consumers, thought in Schumpeterian economics to be minimal, is in fact massive in scale.

In aggregate across the 10 nations surveyed to date, 65 million citizen innovators - consumers - have been documented to be spending tens of billions of dollars per year to develop novel products for themselves.

A second major finding is that more than 90% of the innovation developments by citizens are "free" - freely revealed by their citizen-developers to both peer consumers and commercializing producers without any intellectual property protections.

[16] This has led to the observation that producers and users are enacting a division of labor in the innovation process not previously documented.

The first is the increasing availability of cheap or free digital design tools that can be used at home on ordinary personal computers that most consumers possess.

He in addition seeks to connect his findings to other fields in a way that makes them easily accessible to and useable by both researchers and practitioners.

[16][19] In sharp contrast, producers have been found most likely to develop improvements to products of already-known functions along "dimensions of merit" such as increased performance, reliability, and convenience.

An explanation for this pattern put forward by von Hippel and colleagues builds upon the finding that information is often "sticky" - that is, both difficult and costly to transfer from its source of origin to innovators located at another site.

[25] He was also importantly influenced by Professor Richard Nelson of Columbia University, who has focused on the processes of long-run economic change, with particular emphasis on technological advances.

[26] An additional early influence was Professor Ann Carter of Brandeis, who used input-output tables as a central tool in her research and specialized in the economics of information, technical change, and technology transfer.

[27] More recently, a central source of influence and inspiration for von Hippel has been colleagues in the Open and User Innovation Society (OUI).