In economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

 and business administration literature, Kenneth E. Knight introduced the notion bootlegging in 1967. Bootlegging is defined as research in which motivated individuals secretly organize the innovation process. It usually is a bottom-up

Bottom-up

Bottom-up may refer to:* In business development, a bottom-up approach means that the adviser takes the needs and wishes of the would-be entrepreneur as the starting point, rather than a market opportunity ....

, non-programmed activity, without the official authorization of the responsible management, but for the benefit of the company. It is not in the department’s action plan nor are there any formal resources allocated towards it (Augsdorfer 1996).

Causes

The main reason for the occurrence of bootlegging is the lack of ‘free space’ for creativity. In particular rigid planning ignores the nature of experimental trial and error research. Bootlegging, as a kind of self-regulating element, bridges the mechanistic world of organization (hierarchy, project proposals, MBO, decisions can only be made after some initial findings) with the chaotic world of creativity and innovation. The theory of path dependency explains why bootleg innovations are (most often) in line with the strategic objectives of the firm: corporate competencies define the search paths for its future. In this respect the learning processes, beside the tangible output of bootlegging, are beneficial for the firm.

Bootlegging should not be confused with skunk works

Skunkworks project

A skunkworks project is one typically developed by a small and loosely structured group of people who research and develop a project primarily for the sake of radical innovation. The term typically refers to technology projects, and originated with Skunk Works, an official alias for the Lockheed...

: skunk work is defined as a sort of elite, working officially on a given project alongside the formal organization to solve problems more efficiently. In fact the Pacific tech's Graphing Calculator

Graphing Calculator

Graphing Calculator may refer to:* Graphing calculators, calculators that are able to display and/or analyze mathematical function graphs.* NuCalc, a computer software program able to perform many graphing calculator functions....

 project, NuCalc

NuCalc

NuCalc, also known as Graphing Calculator, is a computer software tool made by the company Pacific Tech. The tool can perform many graphing calculator functions. It can graph inequalities and vector fields, as well as functions in two, three, or four dimensions. It supports several different...

, at Apple Computer

Apple Computer

Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...

 was not a skunk works project but a bootleg project.

Permitted bootlegging

Permitted bootlegging is research time where technical staff are allowed to spend a certain amount of their time working on ‘pet-projects’ in the hope that some day there is some return for the company. Famous examples of companies that follow such an initiative are 3M

3M

3M Company , formerly known as the Minnesota Mining and Manufacturing Company, is an American multinational conglomerate corporation based in Maplewood, Minnesota, United States....

 and Hewlett-Packard

Hewlett-Packard

Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...

. They allow 10 to 15 percent of the working time for own product related interests. A well-known example of a permitted bootleg product is the yellow sticky Post-it note

Post-it note

A Post-it note is a piece of stationery with a re-adherable strip of adhesive on the back, designed for temporarily attaching notes to documents and other surfaces. Although now available in a wide range of colours, shapes, and sizes, Post-it notes are most commonly a square, canary yellow in colour...

 developed by Arthur Fry

Arthur Fry

Arthur Fry is a retired American inventor and scientist. He is credited as the co-creator of the Post-it note, an item of office stationery manufactured by 3M. As of 2006, Post-it note products are sold in more than 100 countries....

 and Spencer Silver

Spencer Silver

Spencer Ferguson Silver is an American chemist who, together with Arthur Fry, invented Post-it notes in 1970.Silver was born in San Antonio, Texas. He majored in chemistry at Arizona State University, earning a B.S...

 at
3M. Another famous example is Google, where employees are allowed to spend up to 20% of their work time in personal projects related to the company's business. Several services provided by Google such as Gmail

Gmail

Gmail is a free, advertising-supported email service provided by Google. Users may access Gmail as secure webmail, as well via POP3 or IMAP protocols. Gmail was launched as an invitation-only beta release on April 1, 2004 and it became available to the general public on February 7, 2007, though...

, Google News

Google News

Google News is a free news aggregator provided by Google Inc, selecting recent items from thousands of publications by an automatic aggregation algorithm....

, Orkut

Orkut

Orkut is a social networking website that is owned and operated by Google Inc. The service is designed to help users meet new and old friends and maintain existing relationships...

 and AdSense

AdSense

Google AdSense which is a program run by Google Inc. allows publishers in the Google Network of content sites to automatically serve text, image, video, and rich media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they...

 were originally created by employees in their work time.

Synonyms

Quite a few firms have their own specific terms for it. English firms call it: Friday afternoon work, work behind the fume cupboard, freelance work, under the counter work, under the table work, pet project, discretionary research, free wheeling, illicit research, scrounging, renegade work, work in the shadow world or underworld. French firms call it: recherche camouflée, recherche cachée, recherche parallele, recherche libre, recherche en perruque, recherche sauvage, or recherche sous-marine. American firms call it moonlighting or government projects. German firms call it: U-Boot Forschung, or graue Projekte.