ABSTRACT
This chapter provides an overview of distributed innovation systems that are achieving success in three different industries with three different organizational models. It considers in the context of the three examples questions and concerns related to why people participate, the organizing principles of production, and the implications for intellectual property. Hayek, arguing for the importance of the market economy, emphasized that at the macro level knowledge is unevenly distributed in society, and that centralized models for economic planning and coordination are prone to failure due to an inability to aggregate the distributed knowledge. The intrinsic and extrinsic motivations to participate in distributed innovation systems are not intuitively obvious to new observers of the phenomenon. OSS communities represent the radical edge of openness and sharing observed to date in complex technology development. Traditional organizations should not, however, seize on distributed innovation systems as some silver bullet that will solve their internal innovation problems.
