Developing Experiential Living Lab as

Platforms for Embedded Innovation

Roumen Nikolov1, Albena Antonova2
1
University of Library Studies and IT, UniBIT, Sofia Bulgaria r.nikolov@unibit.bg
2
Sofia University,FEBA, Sofia, Bulgaria a_antonova@fmi.uni-sofia.bg

Abstract
Within the last decade open innovation became a key ingredient for knowledge creation and knowledge absorption
strategies of large companies. SMEs are usually considered to lack resources and capacity to organize alone open
innovation activities. In this perspective, Hafkesbrink and Scholl (2010) proposed the model of Innovation 3.0 or
embedded innovation, in order to illustrate how SMEs can take advantage of community knowledge. As living
labs emerged as community knowledge creation model, they can be discussed as appropriate innovation
infrastructure for SMEs based on embedded innovation. However, putting a living lab in operation and building
around it dynamic and responsive communities is a challenging experience.
The present research will propose a model for a living lab organization and development, combining three
perspectives: the Embedded Innovation model (integrating the organization into communities to ensure
knowledge absorption), the Knowledge-Social-Business experience (KSB) model (developed under the ELLIOT
project) and the Technology-Mediated Social Platform model (TMSP). The new model will integrate the key aspects
of living labs and will complete the gaps identified on practice. Finally, an experimental living lab ecosystem for
implementing the new model will be presented.

Keywords
living lab, open innovation, embedded innovation, living lab organizational model, communities, knowledge-social-
business experience models, technology-mediated social platform model;

1 Introduction
Open innovation emerged initially as a function of fast technology development and become the
key element for knowledge creation and knowledge absorption strategies of large companies.
Open innovation models allowed large companies to access and profit from external knowledge
in order to improve innovations, competitiveness and profitability and to remain competitive on
the market. Large companies introduced various models to enhance open innovation processes in
practice (Antonova & Nikolov, 2010). As a result, some companies even decreased their budget
for pure R&D activities, but increased human resources, community campaigns and local
networking. Many innovative companies adopted methods promoting bottom-up innovations.
They allocated resources for projects and spin-offs of employees, created venture capital funds,
introduced community and research cooperation and involved end-users in various challenges
and competitions. In contrast to large companies, SMEs usually lack resources to organize alone
open innovations activities. Even if SMEs are more open to collaborate in innovation
processes, they lack enough gravitational force to attract additional knowledge providers. The
generation of innovation for the SMEs is based on multiple interactions. Therefore, individual
and decentralized SMEs which share (pre-competitive) knowledge have to maintain multiple
relationships with communities to create innovation. Hafkesbrink and Scholl (2010) define
the notion of “Embedded Innovation” (Innovation 3.0) as “the fundamental ability of a firm to
synchronize organizational structures, processes and culture with open collaborative learning
processes in surrounding communities, networks and stakeholder groups so as to ensure the
integration of different external and internal knowledge, i.e. competences or technological
capabilities, and to exploit this knowledge to commercial ends”. In such a way they extend
the notion “Open Innovation” by introducing the requirement of “integrating the
organization into communities to ensure knowledge absorption instead of just managing
inside-out and outside-in processes”. So, the process of designing, engineering and
orchestrating communities in order to integrate an organization into them becomes
substantially important for the next generation “Embedded Innovation” based ecosystems.
Living Labs (LLs) can be defined as “an environment for innovation and development where
users are exposed to new solutions in (semi)realistic contexts, as part of medium- or long-
term studies targeting evaluation of new solutions and discovery of innovation opportunities”
(Følstad, 2008). Recently emerged, LL represent an innovative open infrastructure including
many innovation stakeholders - companies, research community, developers, local and
regional authorities and end-users involved in early stage innovation processes for complex
products and service development. LL have been already applied in various settings and have
proved their efficiency. Living labs is an evolving concept, fast spreading around Europe
supported by the European Network of Living Labs – EnoLL (openlivinglabs.eu). This is a
form of user-driven open innovation ecosystem, based on a partnership which enables users to
take an active part in the research, development and open innovation processes. LL represent
a research methodology for sensing, prototyping, validating, and refining complex solutions
in multiple and evolving real life contexts (Mulder, Velthousz & Kriens, 2008). The main
concept behind is that the LL bring users early into the creative process in order to better
discover user patterns. LL bridge the innovation gap between technology development and
the uptake of new products and services. They allow early assessment of the socio-economic
implications of new technological solutions by demonstrating the validity of innovative
services and business models (EC, 2009). LL become main test-bed for development of
innovation, as they combine simultaneously open innovation approach, end-users active
involvement and distributed value co-creation. LL are organized on regional principle, enhancing
local knowledge sharing in specific industry areas. ENoLL highlights the opportunities for
increasing collaboration effect by sharing best practices and widely disseminating LL success
stories within European perspective.
Organizing and strengthening a living lab as a sustainable innovation infrastructure is long and
demanding process. Therefore, the present research aims to exploit how to enhance LL functions
and roles. This is the reason to discuss new model based on three different models – the
Embedded Innovation Model, the KSB Model, developed within the ELLIOT project (elliot-
project.eu/), and the TMSP Model (Chi et al., 2010). The majority of the members of the
European LL are SMEs. Since the concept of “Open Innovation” better fits to the case of “large
players” (Hafkesbrink & Scholl, 2010), we consider the concept of “Embedded Innovation” as
more appropriate when designing and developing a living lab which integrates the innovation
activities of SMEs. The proposed enhanced model will cover in more details LL,
complementing communities and technology ecosystems as key ingredients for the innovation
process. A short description of the LL ecosystem to be used for the implementation of the new
model will be provided as well.

2. Communities in the Centre of the New Innovation Processes

Within the new networked economy and open innovation perspectives, communities and local
innovation infrastructures play substantial role. Moreover, when introducing the next generation
innovation paradigm as “Embedded Innovation” (Innovation 3.0), Hafkesbrink & Evers (2010)
put a special emphasis on the communities’ role for company development and survival. They
highlighted the importance of trust-based relationships between SMEs, especially those
operating in an increasing dynamic and digitalized environment. Communities, networks and
stakeholders are substantial part of this innovation process (Hafkesbrink & Schroll, 2010). The
notion of “embeddedness” is introduced to mark the increasing challenge of substantially
integrating firms into their surrounding communities so as to assure the absorption of their
exploitable knowledge. In this context, the notion of Embedded Innovation goes beyond the one
of Open Innovation (Innovation 2.0). Therefore the new emerging innovation processes come to
prove again the role of communities in the innovative infrastructure of LL. In their research,
Hafkesbrink & Evers (2010) outline four specific types of communities:
 Community of Affinity (CoAs)
 Communities of Practice (CoP)
 Community of interest (CoI)
 Communities of Science (CoS),
CoA support close interactions and networking events, where agents are motivated by a
similar inherent attitude towards products and services. Consumers are typical members of
these communities, expressing their values and beliefs in social networks by giving feedback
such as reviewing products, exchanging experiences about using the services, or chatting on
social fora about related, even peripheral, matters. Hafkesprink & Evers (2010) introduce the
new species of “prosumers”, i.e. consumers that produce and consume at the same time and
play a special role for an innovating firm, since these agents provide substantial contributions
to alter or improve the firm’s products and services. Thus, coproduction involves a continuous
process of semi-automatic, seamless revising of resources through feedback. This mode of
”swarm intelligence” provides the ground for great number of ideas, both for incremental
improvements in existing product/service portfolios and for new product and service
development processes.
CoP are driven by agents that have mutual interests in problem solving (Wenger, 1998). Fischer
(2001) makes the conclusion that CoP “consist of practitioners who work as a community in a
certain domain undertaking similar work”. The similarity of agents emerges because they are
facing similar tasks. The agents are usually called “Experts”. In this respect it should be noted
that CoPs accelerate learning. Wenger et al (2003) discover that the group is important to both
what people learn and how they learn. Communities encourage the exchange of ideas,
assumptions, and theories that open their members to new ways of seeing situations. The CoP
enable the tacit knowledge transformation and sharing trough open and interested dialogue and
discussion. The human networks propose the fastest access to new knowledge, wisdom and
knowledge resources. Learning communities have the main goal to promote the transfer of
know-how between novices and experts.
CoI involve various stakeholders, who have common interests, such as how to develop standards
or how to innovate. CoI bring together stakeholders from different CoP to solve a particular
problem of common concern. They can be thought of as “communities-of-communities” or, a
community of representatives of communities. CoI are characterized by their shared interest in
the framing and resolution of a (design) problem. CoI are often more temporary than CoPs: they
come together in the context of a specific project, and dissolve after that project has ended.
In CoS reliable knowledge is expected to emerge continuously. The scientific community
consists of the total body of scientists, its relationships and interactions. It is normally divided
into "sub-communities" each working on a particular field within science (Hafkesbrink &
Evers, 2010). Knowledge generation usually follows the paradigm of “technology push”, i.e.
that inventions in the scientific community are pushed forward to business, subsequently
leaving the commercial exploitation of scientific results to firms. CoS are becoming an
increasingly important source for the development of innovative products and services for
SMEs.
All four types of communities play substantial role in the LL innovation process and form the
kernel for the LL methodology further development. Another important aspect about community
building is the technology platform that hosts the LL activities. The LL methodology and tools
should be applied in the some technology-mediated environment and in a social participation
system. Therefore we will use the methodology and the analysis of Chi et al. (2010) for
characteristics of Technology-Mediated Social Participation (TMSP) systems. As LL
represent a form of dynamic social activity, an appropriate platform should be developed.
Recently, social media transformed the logic of users’ involvement within technological,
organizational and economic aspects, enhancing learning, working and collaboration. Social
systems create supportive environment for social creativity and collaborative design.
Therefore it is expected most of the innovation platforms to be TMSP systems and to provide
rich interactivity and functionality. According to Chi et al., (2010), the design for social
participation systems rely on the concept of usability and the ability of all users to contribute,
sociability (users skills for networking and participation), social capital (different positions in
social networks), and collective intelligence (evolution of collective ideas).
In the context of TMSP, three main factors for system design are identified - knowledge-ware,
tool-ware, and people-ware. The knowledge-ware refers to the understanding of domains and
context of impact, social experiences, community life stage and individual differences. The
tool-ware refers to IT system components that enable effective social participation. Finally,
the people-ware describes how people interact in social cognitive systems, both as individuals
and as social agents and how they can improve social interactions, conflict management,
system governance and control. The TMSP model of a LL platform should include all three
layers from organizational point of view, covering appropriate knowledge domain, tool
functionality and people interactions within the social media system (see Table 1).

TMSP Living Labs’ social ecosystem Focus on community building

Knowledgeware Focus on specified knowledge Focus on content sharing and
domain and regional aspects knowledge transfer
Toolware Tools for participation and Focus on personalization,
communication, collection of participation, knowledge
data and development of use- sharing and community
cases building
Peopleware Focus on end-users experiences Focus on individuals within
the communities
Table 1: Presenting LL as TMSP

3. The ELLIOT KSB methodology

According to Pallot and colleagures (2011), “ELLIOT (Experiential Living Labs for the
Internet Of Things) is a research and technological development project (elliot-project.eu). Its
main aim is to develop Internet of Things (IoT) technologies and Ambient Intelligence (AmI)
services by, and for, users/citizens, through the design of a set of KSB (Knowledge-Social-
Business) Experience Models and their implementation into an innovative ELLIOT Experiential
Platform operating as a knowledge and experience gathering environment. The early
involvement of users/citizens in research and innovation will be conducted according to the
precepts of the Open User Centred Innovation paradigm and through the co-creation and
experimentation of the LL approach. The resulting confrontation of technology push and market
pull is expected to have a positive impact on the development and adoption of IoT technologies
and innovative services.

The ELLIOT research deals with IoT at two levels. The first one consists in the deployment of
an Experiential Platform for collecting user experience data through sensors, actuators, webcams,
motion detectors and other interconnected devices. This collected experience data are then
utilised for exploring, experimenting and evaluating the KSB impact of IOT applications and
services. The second level consists of exploring the user co-creation of IoT applications/
services, based on the re-use of experiential knowledge, in several LL settings where users will
be “playing” with IoT toolboxes. Therefore, the ELLIOT project aims to develop an IoT
experiential platform where users/citizens are directly involved in co-creating, exploration
and experimentation of new ideas, concepts and technological artefacts related to IoT
applications and services. The KSB Experiential Model integrates social, intellectual-
cognitive, economical, legal and ethical aspects that will enable data collection from user
behaviour and usage analysis. The project will produce validated methods, techniques, and
tools and an experiential platform for user-driven innovation for IoT. As a result the project is
expected to dramatically increase the adoption of IoT and to enhance the potential of
collaborative innovation for the discovery of innovative IoT application/ service opportunities
in bridging the technological distance with users/citizens. The methods, techniques, and tools
could be used in other LL settings as well.

The experiential research process is an iterative process (Pallot, 2009) that links together the four
activities to be carried out within a LL whatever is the innovative scenario to be explored:
 Co-create ideas of new concepts, artefacts and/or innovative scenarios as sessions of
collective creativity involving all concerned stakeholders and especially users;
 Explore alternative scenarios in setting the scene through the use of different immersive
techniques within a live environment;
 Experiment alternative scenarios in prototyping concrete application/services through
the use of a technological platform also within a live environment;
 Evaluate alternative scenarios on the basis of metrics for measuring the Quality of
Service as well as the Quality of Experience that would allow anticipating the potential
degree of adoption by user communities.

All these above described activities feed and increase the level of maturity and knowledge within
a specific research and innovation area such as IOT applications/services, within the three sectors
presented in the ELLIOT project. It means that more use cases feed the process and consequently
the deeper the maturity and the greater the digested experiential knowledge.

Within the ELLIOT project, the KSB model emerged based on the fundamental principle on
which communities are built up. However, a process of harnessing the “collective intelligence”
can emerge only if three fundamental dimensions are simultaneously addressed in a
comprehensive and balanced way (Bifulco & Santoro, 2005). The three fundamental dimensions
are:
 Knowledge (intellectual and cognitive aspects)
 Social (interconnectedness, trust and centrality aspects)
 Business (economical, legal and ethical aspects)
The balance of the three fundamental dimensions is considered as key to the full deployment of
knowledge workers’ creativity and productivity.

4. The Co/KSB/TMSP Model model combining KSB, Communities and

TMSP
The Co/KSB/TMSP Model combines the Innovation 3.0 Model (Communities), the KSB Model
and the TMSP Model. As we have mentionned above, all three models have their practical
application in a LL setting. On the first place, the LL can attract end-users, practitioners,
stakeholders and researchers, only if a proper strategy for different communities building has
been adopted. In this perspective, a specific focus should be put on differentiating user
experiences on the LL platform and allowing them to fast identify their specific user role,
community activities or resource base. The motivation for the end-users to take part in the open
innovation model of the LL will largely depend on their belonging to certain communities.
Therefore, the process of a proper community design, engineering and orchestration plays a very
significant role in a LL establishment, organization and development. Moreover, LL should be
pro-active and supportive of the community activities in order to keep people interested,
networked and thus, allowing them to fruitfully communicate and collaborate.

On the next level, the KSB framework outlines how the LL can differentiate their activities (see
Table 2). In the centre of the LL activities are put the business experiences, outlining specific
business models and appropriate arrangements to keep communities motivated and active. The
business dimension is a form of activity input in the open innovation model. On this level, the
basic features of experiments, products, users’ involvement, activities design and implementation
are to be demonstrated. Therefore, the business side outlines the innovation project.
On the next level is the social experience, which determines how communities will take part in
the LL activities implementation. For example, it will outline the composition of communities,
group dynamics, community interaction patters, trust, culture, habits, behaviour and emotions.
The social dimension will discover how to organize different LL activities and how to increase
the group links, trust and motivation within and among communities.
The knowledge dimension includes the outcome of the LL activities, discovering collected data,
ideas, processes and feedback from community experiences. Knowledge experiences rely on
end-users involvement for further activities and further research.

KSB CoA CoP CoI CoS

Business Innovation Forms of SMEs Clusters and Methods for
experience – incentives integration and stakeholders research
description of cooperation involvement community
activities involvement in
business cases.
Social Activity logistics Influence of Cooperation Follow research
experience – and end-user social elements framework for methodologies,
how are set the involvement; on expert involvement in social factors
activities interactions; activities
Knowledge Provide data, Transfer good Provide Develop further
experience – the feedback, practices and standards and solutions and
outcome of proposals, and practical recommendations identify new
activities; co-creative ideas. experience; problem sets

Table 2: Co/KSB model integration

The LL environment should also integrate an appropriate TMSP model in order to equip all
communities with information technologies and instruments, improving social participation (see
Figure 1). Therefore the knowledge-ware consists of an appropriate knowledge ecosystem, that
includes domains and context of impact, social experiences, community life stage and individual
differences. The tool-ware covers the IT system functionality and components that enable
effective social participation. Finally, the people-ware should have some collaborative
instruments for people interactions in social cognitive systems, both as individuals and as social
agents and tools that can improve social interactions, conflict management, system governance
and control.

5. The Experimental Living Labs Ecosystem

The experimental LL ecosystem for implementation of the Co/KSB/TMSP Model is centred
around the Virtual Services and Open Innovation (VirtSOI) Living Lab. The VirtSOI LL aims to
integrate a broad vision for virtual services development and implementation within the society
related to different sectors, such as: eLearning, eGovernment, eHealth, eContent, eInclusion, etc.
In this respect the VirtSOI LL plays the role of a regional lab and an active marketplace platform
for regional expertise/innovation/service seekers and providers. After reaching a level of
maturity, the VirtSOI LL started making efforts to incubate a set of service-oriented LL targeting
different industrial and public sectors. The first pilot LL are: the Multilingual e-Content and e
Library (MLeCeL) LL (livinglab.itd-bg.eu), the Serious Games LL
(seriousgame.it.fmi.unisofia.bg/) and the IoT e-Health LL (in the framework of the ELLIOT
Project).

Community of
Interest Knowledge
experience
Social
Knowledgeware
experience

Community of
Community of Business Peopleware
experience Practice
Affinity

Toolware

Community of
Science TMPS

Figure 2: Co/KSB/TMSP Model Integration

MLeCeL LL is dedicated to develop innovative services and products based on digital

multilingual on-line content and libraries by involving different partners and communities in
the early stages of their design. The LL hosts the outcomes of four projects which are relevant
to the LL area – ATLAS (atlasproject.eu), OpenScout (openscout.net), Share.TEC (share-
tec.eu) and Smart Book (dse.fmi.uni-sofia.bg/SmartBook/index.htm). The MLeCeL LL
actively cooperates with the Digital Spaces Livibg Lab – DSLL (digitalspaces.info). The
process of designing, engineering and orchestrating the MLeCeL LL communities -
community of developers (CoP), community of end-users (CoA), community of partners
(CoI) and research community (CoS), is in a very active phase now. In the frames of the
ATLAS project three separate solutions are under active development and evaluation with the
support of the communities:
 i-Publisher - provides a powerful web-based instrument for creating, running and
managing small and enterprise content-driven web sites.
 i-Librarian - allows users to store, organize and publish their personal works, locate
similar documents in different languages and easily obtain the most essential texts
from large collections of unfamiliar documents.
 EUDocLib - publicly accessible repository of EU documents, which provides
enhanced navigation and easier access to relevant documents in the user's language.
I-Publisher targets small enterprises (web design and hosting companies, publishing houses)
and non-profit organizations (universities, research organizations, schools, libraries), by
providing:
 ability to build content-driven web sites via point-and-click user interface;
 wide set of predefined functionalities;
 automatic processing of textual content – categorization, summarization, annotation,
etc.
i-Librarian addresses the needs of authors, students, young researchers, readers and scholars by
allowing them to:
 easily create, organize and publish various types of documents;
 find similar documents in different languages
 share personal works with other people;
 locate the most essential texts from large collections of unfamiliar documents.
EUDocLib addresses the needs of people who require easier access to EU documents in their
own language. EUDocLib users can:
 easily find similar documents;
 read the summaries of desired documents;
 read extracted important words and phrases;

6. Conclusions
The present paper discusses a model integrating three appropriate methodologies and models
that could be applied in a LL ecosystem. As LL represent a suitable infrastructure for end-user
involvement and community building, they can propose an interesting opportunity for open
innovation processes in SMEs, such as embedding innovations into communities. Moreover,
LL can become the meeting point of SMEs with end-users, researchers, practitioners, third
partners and stakeholders. However, it should be highlighted that the success of LL is not an
automatic process as it concentrates the interests of different stakeholders and communities.
Therefore, appropriate methodologies should be applied for LL organization and
development, in order to put in reality the objectives of LL.

Acknowledgement
This work has been partly funded by the European Commission through the FP7 ELLIOT Project “Experiential
Living Labs for the Internet Of Things - Enlarged EU”, FP7 TARGET-Project “Transformative, Adaptive,
Responsive and enGaging EnvironmenT” and the CIP- ICT-PCP-2009-3 ATLAS Project “Applied Technology
for Language-Aided CMS”. The authors wish to acknowledge the Commission for their support. We also wish to
acknowledge our gratitude and appreciation to all the project partners for their contribution during the
development of various ideas and concepts presented in this paper.

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