Any good living lab models out there?

In Finland many research projects got public funding (by Tekes, EU etc.). Funding is linked with personal experience (=longer courier and better business network) and/or enthusiasm; "sisu" (guts) to come up with a good R&D consortium. Too often the result is just another report or a prototype which will never be utilized commercially. That is because researchers get more steady income and more opportunities for experimenting at a research institution and companies have not really put that much effort to the project because it is publicly funded. Also some companies lack strategic solutions and operational model on how to turn a prototype into a product. Anyhow this has a lot to do with individuals and their will to take the project further. This IMHO is the key.

For example Google has promoted innovative solution to allow anyone to put 20% of their time to a personal project. This is very interesting because it motivates people but also gives responsibility. That would mean people have the will and the way plus good network of like-minded people around them. Another interesting example is Wikipedia. It is an online living lab where crowdsourcing and self-regulation is the key. This time the will is not as clear as the way.

Key words such as living labs, open or systemic innovations and community generated content have often been mentioned in touch with more experimental product development. In Finland Forum Virium Helsinki has put up Helsinki Living Lab project which tries to find ways to active citizens to contribute and improve communal services. Sound dull, right? The trick is to make a dull thing interesting and motivate people to take more active role in decision making and/or influence decision makers.

What would be the best model to come up with new solutions? Would it be open innovation, traditional public research project model, operator model, event/campaign model or sponsor model? How to make it more fun, interesting and personal? How to motivate people to participate in testing and innovating better services? Currently people seem to give feedback only if they are unsatisfied (=angry). They are able to point out the problem but who would link that to perhaps bigger strategical solution or a challenge especially if the problem concern e.g. two different operational units or bureau in Helsinki?

What I am asking here is: What would be the best living lab/citizen innovation model? Do other cities, countries… have any excellent models they would like to share? Would living lab type of solution increase citizens wellbeing in general? Would it even be possible to activate them or are people just too lazy? What do you think? All comments highly appreciated!