Expanding the scope of application of user innovation ...

International Journal of Innovation Studies 2 (2018) 33e41

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International Journal of Innovation Studies journal homepage: http://www.keaipublishing.com/en/journals/international-journal-of-innovation-studies

Expanding the scope of application of user innovation theorydA case study of the civil-military integration project in China Jhony Choon Yeong Ng*, Karen Kai Wen Song, Qingmei Tan College of Economics and Management, Office 914, Nanjing University of Aeronautics and Astronautics, Jiangning District, Nanjing 211106, Jiangsu, China

a r t i c l e i n f o

a b s t r a c t

Article history: Received 11 November 2017 Accepted 8 March 2018 Available online 26 March 2018

The focus of scholars studying user innovation has been restricted to the interaction between companies and individual users, and how companies can unilaterally exploit values from the value chain between companies and users. We argue that the value chain between the user and manufacturer should be a bilateral value chain in which both the user and manufacturer can conduct their own innovations and provide greater value to the whole value chain. In this paper, using examples from China's civil-military integration project, we took a step forward to apply the user innovation theory in the explanation of inter-sector technological value transfer. The main theoretical contribution of this paper is the expansion of the scope of application of the user innovation theory to inter-sector level research. Studying cases from China's civil-military integration project, we found that the concepts of user and innovator become blurred when we study the phenomenon across time. When we go beyond individual user and manufacturer and shift the focus of our discussion to the level of inter-sector technological value transfer, we will find that it is possible for organizational agents at large to be both users and innovators of technology. © 2018 Publishing Services by Elsevier B.V. on behalf of KeAi Communications Co., Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/ licenses/by-nc-nd/4.0/).

Keywords: User innovation Civil-military integration Technological value chain Military sector Civil sector

1. Introduction In his seminal work on user innovation, Von Hippel (1976) argued that industrial products that were commercially successful were usually products that manufacturers have produced in response to their perceptions of user needs but not technological advancements. Thus, manufacturers must find the means to accurately capture the needs of users to achieve commercial success. Toward this end, instead of merely focusing on the roles played by manufacturers and suppliers in the cycle of product innovation, Von Hippel (1976) called for more scholarly emphasis to be given to the role of users in the cycle and their capability to innovate. Von Hippel (1988) argued that the entity that best understands the needs of users will invariably be users themselves. To better meet their own specific needs, users can create their own products or making changes to existing products (Chen & Chen, 2007; Von Hippel, 1976). That is, users can engage in user innovation when their needs cannot be fulfilled by

* Corresponding author. E-mail addresses: [email protected] (J.C.Y. Ng), [email protected] (K.K.W. Song), [email protected] (Q. Tan). https://doi.org/10.1016/j.ijis.2018.03.002 2096-2487/© 2018 Publishing Services by Elsevier B.V. on behalf of KeAi Communications Co., Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

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products available in the open market. Thus, other than manufacturers and suppliers, Von Hippel (1988) proposed that users are also an important source for innovation. In contrast to the traditional perspective on innovation in which users are merely passive consumers of innovations made by such industrial agents as manufacturers and suppliers, the users have the capacity to become active innovators under the perspective of user innovation. Over the years, the focus of scholars studying user innovation has been restricted to the interaction between companies and individual users, and how companies can unilaterally exploit values from the value chain between companies and users (Baldwin & Von Hippel, 2011). By value, we refer to the utility that an agent can derive from the consumption of a product or the use of a technology (Blanchard, 2009; Yan, 2001). For example, how the effective identification of lead users can become a source of competitive advantage for companies in the telecommunication market (Chen, Tong, & Xu, 2003); how companies can effectively locate innovative users and exploit user innovation (Baldwin & Von Hippel, 2011; Franke, Von Hippel, & Schreier, 2006); and how companies can effectively motivate and collect innovations from users to become the inputs for their own manufacturer innovation processes (Jing, 2014). Essentially, what scholars studying user innovation had done over the years was find the effective means for companies to push the duty to innovate to the users and how they can effectively exploit the benefit of user innovation for their own commercial success. We argue that such a perspective on user innovation has deviated from the theory's initial focus on how users can create products that have greater value with their own innovation. In addition, it has also unnecessarily limited the scope of application of user innovation theory to the unilateral transfer of values from the user to the manufacturer. We argue that research on user innovation theory should not only be restricted to the study of how companies can exploit the innovation of users for their own commercial success. We argue that the value chain between the user and manufacturer should be a bilateral value chain in which both the user and manufacturer can conduct their own innovation and provide greater values to the value chain as a whole. Toward this end, we will use the case of the civil-military integration project of China's central government to illustrate the possibility of a bilateral value chain in which both the manufacturer and user can become the “user” and “innovator” of a product. The civil-military integration project was initiated by the central government of China in the late 1970s to optimize the resource allocation structure of the country's civil sector and military sector (Lu, 2007; Shu, Xie, & Wang, 2010). The project's aims are to bridge the independent economic systems of the two sectors, promote inter-sector mutual transfer of technology, and develop technology that can be used by agents from both sectors (Huang, Tan, & Huang, 2016). Since its initiation, the civil-military integration project has been progressing very slowly due to such obstacles as the main stakeholders' lack of motivation to actively participate (Huang, Ng, Tan, & Huang, 2016). We chose the case of civil-military integration as the focal topic of this paper's discussion because observations of the recent interactions between the two sectors indicate that certain technologies that were transferred from agents of the military sector to agents of the civil sector in the past were improved by the latter with their own user innovations, and these improved technologies were then transferred by agents of the civil sector to agents of the military sector (Jiang & Li, 2007). As will be discussed, we argue that in the case of the civil-military integration project, the role played by agents from the military sector was analogous to the manufacturer of technology, and the role played by agents from the civil sector was analogous to the user of technology. Thus, when agents of the civil sector improved the technology that they received from agents of the military sector, it was analogous to the case of user innovation. Given this, we chose the case of China's civil-military integration project for this paper's discussion because it is an excellent exemplar of the arguments that we brought forward in this paper. Aims of research In this paper, we aimed to contribute to the literature in two ways. First, we argue that the cause for scholars to oversee the bilateral value chain between the user and manufacturer is because they have tended to focus on the interactions between agents at the individual-corporate level. As will be discussed, if we go beyond the individual-corporate level and examine the interactions between users and manufacturers at the inter-sector level, it is possible for the boundary between manufacturer and user to blur, and both parties can be the “user” who consumes a product or the “innovator” who creates or make changes to the product. To the best of our knowledge, this paper represents one of the few pioneering articles that argued for the existence of a bilateral value chain between the user and manufacturer of a product, and this paper is one of the first few articles that applied the user innovation theory to explain macro-level inter-sector phenomenon. Second, there is a lack of literature that studies the technological value chain between the civil sector and military sector. The literature available in the open press is usually focused on the short-term value exchanges between agents from the military sector and civil sector. For example, Lewis-Fleming and Knapp (2009) discussed their experiences in the medical conference that civilian doctors conducted with military doctors. Schulman et al. (2010) studied the effects of the training courses that civilian doctors conducted for frontline military doctors. Felton (2015) discussed the role that the United States Air Force could play in humanitarian operations. However, as will be discussed, in the context of China, since the initiation of the civil-military integration project, the civil sector and military sector in China have been engaging in technological value transfer. Such long-term interaction between agents from the civil sector and military sector has yet to receive enough attention in the mainstream literature. We aim to fill this gap in the research. Third, in the history of many countries, technological values are usually transferred unilaterally from the military sector to the civil sector (Li, 2010). For example, mobile phones and commercial aircrafts were created by the civil sector based on the


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technology that they received from the military sector (Li, Yang, & Hu, 2011; Wang, Zhang, & Wang, 2013). Transfer of technological values in the reverse direction seldom occurs because military technology is usually more advanced than civil technology (Yuan, 2008) and because civil technology is usually solely designed for commercial purposes. Thus, while there is no lack of research on the commercialization of military technology (Li et al., 2011; Wang et al., 2013), there is a lack of literature that studies the transferring of technological value from the civil sector to the military sector, and there is a dearth of literature that focuses on the bilateral transferring of technological values between the military and civil sectors. Thus, in this paper, we aim to fill the gap in literature by studying the bilateral transfer of technological values between the military sector and civil sector of China. The structure of this paper is as follows. First, we review the literature on user innovation to set the theoretical framework for this paper's discussion. Second, we review the literature on China's civil-military integration project to provide the background information required for this paper's discussion. We discuss how the historical peculiarities of the country have caused its military and civil sectors to develop independently, and the problems that the approach had created for the country's economy. Third, we discuss how the Chinese government had attempted to resolve these problems by initiating the civil-military integration project, and the factors that caused the project to not perform as well as intended. Fourth, adopting the perspective of user innovation, we illustrate how innovations made by users have promoted the bilateral technological transfer between the military and civil sectors of China. Finally, we discuss the contributions and implications of our research before ending this paper with our concluding remarks.

2. Theoretical framework: user innovation User innovation refers to the process in which the user creates new products or makes improvements on existing products based on individual needs (Chen & Chen, 2007). Von Hippel (1988) argues that other than the manufacturer and supplier, the user is also an important source of innovation. Any user can innovate by making changes to products available in the market, or by improving the process by which these products were manufactured (Wu & Xie, 1996). The key difference between user innovation and innovation in the traditional sense is the main player responsible for the making the change. While companies are the main players responsible for traditional innovation, consumers of products are the main players responsible for user innovation (Dai & Chen, 2003). Nevertheless, this does not mean that companies do not take part in user innovation at all. For example, the commercialization of user innovation usually proceeds through four phases (Baldwin, Hienerth, & Von Hippel, 2012): discovery of design possibilities by independent user innovators; converging of new ideas and designs from different user innovators to form collective innovation; user manufacturer engaging in small scale high variable cost/lowcapital production; and the entering of high capital, low variable cost manufacturer to the market to mass produce the product. Thus, from the perspective of the commercialization of user innovation, users can play both the role of inventor and co-developer of new products (Chen & Chen, 2007), and companies can facilitate this process by providing the users with the tools that they need for their innovation processes (Von Hippel, 1990).

Benefits of user innovation As innovators, users can make several contributions to the market value chain. First, user innovators can make their products available in the market to provide benefits to the other users at low or no cost (Von Hippel, Ogawa, & Jong, 2011). Some products of user innovation are high utility goods that do not even exist in the commercial market before its invention. For example, one classic case of free user innovation is the blood glucose level measurement tool that a diabetic patient created to guide their before-sleep self-injection of artificial pancreas (Cobelli, Renard, & Kovatchev, 2011). The tool was a brand-new invention that the patient created using readily available parts bought from the commercial market, and the innovator shared the manufacturing process of the tool for free on the internet to benefit the other diabetic patients. Second, user innovators can also provide benefits to the other users by selling their production technology to corporate producers, which will in turn utilize the technology to mass produce and commercialize the product (Morrison, Roberts, & Von Hippel, 2000.). Such commercialized goods tend to have higher utility because they are created based on the actual needs of users (Urban & Von Hippel, 1988), and they are usually produced at lower costs than products of producer innovation because it saved the producer the costs that would otherwise be incurred for the product's research and development (Gambardella, Raasch, & Von Hippel, 2017). For example, in 1968, Walt Blackader modified the design of kayak to create the rodeo kayakda specialized kayak that is redesigned to support the performance of acrobatic tricks in rough white waters (Baldwin et al., 2012). The design of the rodeo kayak was further modified by fans of the sport based on their own needs. When corporate producers entered the rodeo kayak market in the 1990s, they were able to mass produce and sell the product at a low price simply by learning the crafts of its production from the fans of the sports.

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3. The civil-military integration project of China 3.1. The partitioning of the civil sector and military sector in China Military powers had huge influences over the governance of the People's Republic of China when the country was newly founded in 1949 (Teiwes, 1987). The ruling party of China, the Chinese Communist Party, divided the country into six regions. While two of them were governed directly by the central government, the other four regions were governed by the respective Military-Political Committee. Members of each region's Military-Political Committee was appointed by the central government, and many of them had military backgrounds. The committee was put in charge of all civil and military affairs in the region. It was a temporary political system put in place by the central government to ensure the smooth transition of political power and authority to the respective local governments at due time. During this period in history, military affairs were not governed separately from civil affairs, and military market had close connections with the civil market. By 1952, the Military-Political Committee system was abolished, and many leaders from Military-Political Committees were reappointed leadership roles in the central government after they handed over their political power to the local governments (Teiwes, 1987). Henceforth, the governance of military affairs and civil affairs became strictly separated. The Communist Party Secretary of the local government took over the governance of civil affairs, and the Commander of the armed forces took over the governance of military affairs. The local government has no authority over the military, and the armed forces have no right to interfere with local governance. Chinese scholars called this period in history the civil-military partition period (1952e1977; Du & Ma, 2016). Adapting the former Soviet Union's economic system, the Chinese central government partitioned the military market system from the civil market system (Xu, 1999). Agents from both market systems became responsible for the development of technology and production of products for users in their own market system, and they were restricted from communicating and interacting with agents from the other market system (Shu, 2010). 3.2. Problem caused by the partitioned economic system As China was recovering from the damages suffered during the Second World War and the recent civil war, the Chinese central government made national defense and economic development its priority (Zhang, 2009). Nevertheless, because many leaders in the central government had military background, they gave more importance to the building of the country's military strength. These leaders spearheaded projects to modernize the country's armed forces and took charge of the research, development, and production of military equipment (Wen, 2008). With their efforts, military spending became one of the main constituents of the Chinese public expenditure. For example, when China took part in the Korean War (1950e1953), military spending occupied 32.9%e43.3% of its public expenditure, and it remained at the high level of 15.3% even when into the 1960s (Xiao, 2003). Given that the resources available at the discretion of a country are limited, the spending of a significant portion of its public expenditure on military spending will inevitably cause the resources allocated for economic development to reduce. Thus, although China managed to improve its military capacity tremendously, the country's economy did not pick up at the same rate. China was not opened for foreign trade until 1979 (Wang & Ma, 1998). As a result, the military sector had to rely on the local market for materials essential for their research and production of military technology and equipment (Chen, 2010). However, because the Chinese central government developed the military sector at the expense of the civil sector, the military sector soon faced difficulties in securing materials essential for their research and production, and the country was challenged by an awkward situation (Bai, Li, Jiang, & Tian, 2008; Xiao, 2003). On one hand, the lack of support caused the civil sector to be relatively underdeveloped, and they could not produce high quality materials needed by the military sector. On the other hand, however, the military sector although had a relatively abundant amount of public funds, they could not find the materials that they needed from the local market. Other than causing public funds to be left idle instead of being used for constructive purposes, the arbitrary partitioning of the military sector and civil sector had also resulted in such other problems as the wastage of public funds on repetitive projects. For example, because researchers of military technology and researchers of civil technology were not allowed to communicate and share many of their information, many of them ended up spending their resources on projects that developed similar technologies and equipment (Zhang, 2008). 3.3. Initiation of the civil-military integration project in China Recognizing the interdependent relationship of the military sector and the civil sector (Du, 2012), the Chinese central government reformed its public policy in the late 1970s to give economic development more emphasis (Lu, 2007) and started the civil-military integration project (Shu et al., 2010). In short, the civil-military integration project's aim is to optimize the resource allocation of the country by ensuring that the civil sector and military sector do not engage in repetitive tasks (Huang et al., 2016), to develop technologies and produce products that can be used by both military and civilian consumers, and also to encourage the mutual transfer of technological values between the civil sector and military sector. The government hoped that such initiatives can benefit the developments of both civil and military sectors. On one hand, the transferring of technology and skills from the more technologically


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advanced military sector can help develop the civil sector by improving its technological capacity, and on the other hand, a more developed civil sector can also contribute to the development of the military sector by providing higher quality inputs for production (He, Hou, & Wang, 2011). Nevertheless, while the Chinese central government had started to give more importance to the civil sector, the development of the military sector remained the priority of the Chinese central government. 3.4. Problems in the early civil-military integration project The early period of civil-military integration project is termed as the “military-to-civil-transfer period” by Chinese scholars (Shu et al., 2010). It is characterized by the unilateral transfer of technological values from the military sector to the civil sector. Technology was transferred from the military sector to the civil sector, and non-sensitive military products were sold to civilian users (Du, 2002). For example, grinding machines were previously used only in the production of military products. After the military sector transferred this technology to the civil sector, it improved the efficiency of civil sector's production of watches and cutleries (Yu, 1983). Agents from Shaanxi Province's military sector invented the fire extinguishing grenade for military purposes. After they sold the product to the civil defense sector, it improved the civil defense capacity of the country, and it saved many lives during civil emergencies and disasters (Bai, 1991). However, although the transferring of military technology and selling of military products to the civil sector improved the latter's technological capacity and performance efficiency tremendously, the value chain of China was unstable because there was a lack of input from the value receiver, and values were only transferred unilaterally from the military sector to the civil sector. The role of the civil sector in the chain of technological value transfer remained as a passive receiver of technology, and agents from the civil sector could only receive what agents from the military sector wanted to transfer. The lack of input from the civil sector resulted in such problems as high adaptation cost and low technological transfer efficiency. For example, because the civil sector and military sector have been developing independently, technological standards adopted by agents from both sectors were mostly incompatible. For example, the standard sizes of clothes produced by manufacturers from both sectors were different. The “L” size clothes produced by manufacturers from the military sector were not the same as the “L” size clothes produced by its counterparts from the civil sector. Influenced by the incompatibility of technological standards between agents from both sectors, the results of technological value transfer between the two sectors were satisfactory at best (Zhang, 2006). On the other hand, because the civil sector was too technologically backward, they could not provide the initially anticipated values to the military sector in return (Ding & Wei, 2013). From the perspective of technological value chain, these circumstances were rather peculiar because it indicated that the exchange relationship between the civil and military sectors was a zero-sum game. Given that the civil sector could not choose what they wanted to receive from the military sector, and they could only receive technology and equipment that were incompatible with their own business model after incurring high costs, the potential value that the civil sector could derive from the civil-military integration project was marginal at best. On the other hand, given that the military sector could not receive their anticipated benefits from the civil sector after transferring their technology, the value that they could receive by actively participating in the civil-military integration project was negative. Thus, as time passes, agents from both sectors started to become disenchanted, and many of them lost their interests in the civil-military integration project (Xu, 2015). 4. User innovation: the key element vital to the success of civil-military integration? Recent observations on the interactions between agents participating in the Chinese civil-military integration project showed evidences that some agents from the civil sector have started to transfer technological values to the military sector. For example, the agents of the military sector transferred the self-heating food technology to the civil sector in the 1980s (Jiang & Li, 2007). Self-heating food was invented by the military to allow soldiers to have access to warm food on the field. When the technology was transferred to the civil sector, such factors as high unit production cost and limited choice of food became the main obstacles for the product's commercialization. Over the years, agents from the civil sector overcome these obstacles with their own innovations. They increased the variety of food, reduced unit production cost by increasing the energy efficiency of thermit powder (chemicals used to heat food) and improved the product's performance by increasing the thermit powder's resistance to humidity. These innovations made in the original technology attracted the interest of the military sector, and they introduced the upgraded technology from the civil sector to their own field ration production. Another example is the transferring of the infrared focal plane staring imaging technology from the civil sector to the military sector. Infrared imaging technology was initially used in the Second World War (Tan, 2001). However, as China had relied on foreign countries for the importing of products that were built on the technology, it faced political risks that were related to technology blockade and embargo. To reduce China's reliance on foreign export of technology, a corporation in China conducted their own research on the technology and managed to successfully apply the technology in its own mass production of products that were subsequently used by the military for weapon production (Zhu, Lu, & Li, 2015). From the perspective of user and innovator, when agents from the military sector created and transferred the technology to civil sector agents, the latter is essentially the “user” of the technology. Thus, when agents from the civil sector innovated

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and made improvements on the technology received, it is arguable cogently to be an instance of user innovation. Essentially, it is a case in which the user modifies the technology that they received from the military sector. For example, referring to the self-heating food case (Jiang & Li, 2007), when the technology to produce self-heating food was initially transferred to the civil sector, agents from the civil sector were essentially users of the technology. This is analogous to the case of a company selling its product to the user, with the exception that the user did not directly “consume” the product but had used it for their own production. When agents from the civil sector (user) innovated the original technology and transferred the improved technology back to the military sector, it is analogous to the case of the user innovating the design of the product that they had previously obtained. When these sequences of events are considered in whole, it is cogently arguable for it to be a complete cycle of user innovation in which the user innovated the product that they received and then returned the modified product to the producer. These examples of the domestication of technologies with military origin illustrate user innovation because of the similarities that the process had with the process in which individual users innovate products produced by manufacturers. For illustrative purposes, consider the example on the domestication of the military's self-heating food technology. After the technology was transferred to the civil sector, companies innovated the technology in different ways and used it to produce different products to serve their disparate business needs. Companies in the hardware industry modified the technology to produce light and easy-to-carry self-heating bags that users can use to warm their food when engaging in outdoor activities. For example, Shanhe Technology Company focused their business on the production of self-heating bags and the accompanying mini-kitchenware that users can use to cook their food outdoors. Companies in the food and beverage industry adapted the technology for their production of self-heating food that is ready to eat. The focus of these companies is usually on how to increase the variety of food that they can produce to meet the needs of different consumers and how to make the production of these food products more cost efficient. For example, to better serve the needs of the Muslim market, the brand Saiwaixiang is specialized in the production of halal self-heating food. The brand Haokang focuses their research and development efforts on expanding the range of variety of self-heating food that they can provide to outdoorsmen. Companies such as Qinhuangdao Fushou Food Company even produced self-heating food products that imitate the food menu and packaging of the military sector to satisfy the needs of military fans. An important characteristic of user innovation is the user of the technology innovates on the original technology to meet their specific needs (Chen & Chen, 2007; Von Hippel, 1976), and the outcome of such innovation can be commercialized to realize economic values (Baldwin et al., 2012). Thus, when companies from the civil sector received the self-heating food technology from the military sector, made changes to it with their own innovation, and used it in their own business to satisfy their commercial needs in different ways, it is cogently arguable that it is an instance of user innovation at the sectoral level. We argue that the outcome of such user innovation has contributed tremendously to making the bilateral technological value transfer between the two sectors possible because what the users (civil sector agents) had done in user innovation was not creating new technology but improving the quality and functionality of technology that the military had created. While the creation of new technology may not meet the needs of military users, the outcome of user innovation will usually provide value to the military sector because it is essentially an upgraded version of an existing military technology. 5. Discussion User innovation theory has been mainly used in studying the interaction between individual user and manufacturer, and how the manufacturer can exploit the innovations of individual user for their own interests (Baldwin & Von Hippel, 2011; Franke et al., 2006). In this paper, using examples from China's civil-military integration project, we took a step forward to apply the user innovation theory in the explanation of inter-sector technological value transfer. Instead of individual user and manufacturer, we discussed in terms of organizational agents at large, and instead of specific products, we discussed in terms of technology. We argued that our attempt to expand the scope of application of the theory is theoretically justifiable. By definition, user innovation refers to the process in which the user creates new products or makes improvements on existing products based on individual needs (Chen & Chen, 2007). It is well-accepted in academia that user can refer to individual user, corporate user, or organizational user, and product can refer to any tangible and intangible goods that are available for consumption (Solomon, Lu, & Yang, 2009). Thus, to expand the definition of user to organizational agents at large, and to expand the definition of product to include technology, is theoretically well-grounded. We believe that our expansion of the original theory has important contributions and implications to the literature on user innovation and public policy. 5.1. Theoretical contributions and implications The main theoretical contribution of this paper is the expansion of the scope of application of the user innovation theory to inter-sector level research. When we go beyond individual user and manufacturer and shift the focus of our discussion to the level of inter-sector technological value transfer, we will find that it is possible for organizational agents at large to be both user and innovator of technology. When we look at the interactions between individual user and manufacturer, the nature of the data limits the scope of application of the user innovation theory to the unilateral value transfer from the user to the manufacturer. Bounded by constraints due to such factors as time and disposable resources available to individual users at each observation, it is likely


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that we only observe in such instances the transferring of value from the user to the manufacturer. Each data set collected from a case can only tell us how the individual user has contributed to the manufacturer's interest, and it tells little about what happens between the two parties at a later point in time. However, when we observe the phenomenon of user innovation at the macro-level of sector, the data that we observe are essentially the agglomeration of all the interactions that happened between manufacturers and users from each sector. It provides a more complete and coherent picture of the interactions between the two parties. Thus, when we study user innovation between two sectors over time, it is possible for us to see the long-term interactions between the two sectors and observe the nature of their interactions in fuller detail. In this paper, studying cases from China's civil-military integration project, we found that the concept of user and innovator become blurred when we study the phenomenon across time. For example, when the military sector initially created the self-heating food technology and transferred it to the civil sector, it was clear that the civil sector was the user and the military was the innovator. However, when the civil sector improved the technology and transferred the improved version back to the military sector, the roles of the two sectors were reversed. The picture will become even more complicated when we look at the data in finer detail. For example, it is possible for certain agents of the civil sector to be still receiving the older technology from agents of the military sector when their counterparts are exchanging the advanced technology in the reverse direction. Thus, when we expand the user innovation theory to the inter-sector level, we will see a more vibrant and complicated picture of the interactions that occur between agents from each sector. Fig. 1 summarizes the arguments that we have put forward in this paper. The solid arrow between the military sector and civil sector represents the mutual transfer of technological values between the two sectors. As discussed, such mutual transferring of values is made possible by user innovation in the context of China's civil-military integration project. The dashed arrow pointing from user innovation to the mutual technological value transfer arrow between the two sectors indicates the positive influence of user innovation on the value chain between the military and civil sectors. The engagement of user innovation by agents from both sectors will enhance the quality of their value chain by increasing the quality and rate of technological value transfer between their agents. As time passes, both sectors will become more skilled and experienced in handling the technology, and they are likely to have contributed their own user innovations to the country's technological value chain. They will switch their role from user to innovator and vice versa from time to time, and as time passes, it will be harder and harder to differentiate which party is the innovator or user of a technology. This relationship between the two parties is reflected by the broken lines between the roles of the two sectors. Future research on innovation should consider the synergistic interactions that can happen between the innovator and user of products when both parties actively contribute to the value chain between them with their own user innovation.

5.2. Empirical contributions and implications The mainstream literature on China's civil-military integration project has been focusing on the unilateral transfer of values from either the military sector to civil sector, or vice versa (Li, 2010). However, due to such problems as the different technical standards adopted by the two sectors, and many technologies created by each sector not being meant for use by the other, the civil-military integration project of China is facing challenges on their road to success (Huang et al., 2016). Nevertheless, when we apply the user innovation perspective in the research on civil-military integration project, we found that it is possible to overcome the problems caused by the different technical standards and needs of the civil and

Fig. 1. Influence of user innovation on the value chain between the military and civil sectors.

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military sectors. An important characteristic of user innovation is that the innovation made by the user is necessarily based on the design of the original product (Chen & Chen, 2007). Thus, regardless of whether the outcome of a user innovation is a new product or improvements made to an existing product, its purpose and function will not radically deviate from the original product. This characteristic of user innovation ensures the outcome of such innovation will remain valuable and needed by the other sector which is still using the older version technology. Future research should focus on searching for the means to effectively encourage agents from each sector to actively engage in user innovation and mutual technological value transfer. We anticipate that the research on this topic will require inputs from scholars from different disciplines. For example, from the public policy perspective, scholars must reconsider the balance between security and privacy and the values of innovation. Given the potential benefits and technological values that can be derived from user innovation, should the military sector allow the civil sector to have access to more military use technology in hope for greater future technological values in return? Given that the military sector is still working independently of the civil sector, apart from the civil-military integration project, how can the government facilitate the information exchange between the two parties to increase the possibility of them interacting and creating more technological values for the country with their own user innovations? These are some of the questions that future research should consider. 6. Conclusions Hitherto, scholars studying user innovation theory has focused on the interaction between manufacturers and individual users (Von Hippel, 1988). They focused on searching for the ways that manufacturers can better exploit the innovations conducted by the users for their own interests (Baldwin & Von Hippel, 2011). In this paper, expanding the scope of application of the theory from the individual-corporate level to the inter-sector level, we propose that when we look at the inter-sector technological value transfer in the case of China's civil-military integration project, it is possible for both the user and innovator to switch their roles from time to time, and it is possible for the two parties to mutually benefit from each other's user innovation. We hope our work can attract the interests of user innovation scholars, and we hope that more scholars can further expand the scope of application of user innovation theory in their future research. Conflicts of interest The authors declare no conflict of interest. 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