How 'Internal' Users Contribute to Corporate Product Innovation : The Case of Embedded Users

Harnessing tacit knowledge rooted in use experience for innovation is a major challenge for firms. To do so, firms have to find ways to extract, transfer and interpret this knowledge and then to best combine it with the firm's technical expertise. This paper explores a phenomenon that is novel to research and significant in practice: “Embedded Users”. We define embedded users as firm employees, who are at the same time users of the firm's products. Embedded users are deeply embedded both inside and outside the firm and integrate user as well as solution related knowledge. Because of these characteristics embedded users are highly qualified to innovate. With our paper we shed light on this hitherto under-researched phenomenon and focus on the question, how embedded users contribute to corporate innovation, and more specifically what resources and capabilities they deploy during the innovation process. We use interview data from 23 firms (35 interviews) in the sporting, leisure and individual healthcare industries. Our findings show that embedded users exist in practice. They draw on knowledge resources (use knowledge, solution knowledge, organizational knowledge) and social resources (structural, relational, cognitive capital) relevant for innovation. Our research shows that they significantly contribute to the innovation process of their firms, i.e. the ideation phase (idea generation, external information absorption, competitive intelligence), the development phase (specification setting, testing), and the marketing phase (company representation, opinion leadership). We contribute to theory by showing that there are individuals inside the firm, who draw on their use-related resources and capabilities to innovate. This adds to the notion that employees can exhibit an absorptive capacity towards need knowledge, which plays a central role in the innovation process