Co-design (sometimes referred to as participatory design) describes a cooperative design process involving relevant stakeholders as a team of co-designers who jointly explore the problem and solution space. Multistakeholder participation may, however, be restricted to the involvement and concurrent work of diverse stakeholder in design sessions. Co-design can occur in a co-located situation or in remote places. It mainly implies a cognitive synchronisation among the participants, the creation of shared understanding of the problem and the creation of shared representations. This requires active participation of all stakeholders and a suitable co-design environment.
Camarinha-Matos et al. distinguish between cooperation and collaboration. Cooperation between heterogeneous stakeholders serves the purpose of collective value creation. This includes the alignment of activities as well as resources towards compatible goals. Stakeholders may also engage in shared design activities towards a common goal. This can lead to collaboration, the joint engagement of participants to solve a particular problem by means of sharing risks, resources, responsibilities, losses and rewards. This in turn requires the building of mutual trust, effort, and long-term dedication.
Co-design also falls within the wider scope of co-creation. This concept is widely attributed to Prahalad & Ramaswamy  who describe the shifting role of customers in the new economy and how they can serve as a new source of firm-competence. They engage in so-called enhanced networks where they act as co-developers, co-creators of market value, as well as competitors. Thus, value is created by ongoing collaboration with active customers to access their competencies and shape customer experiences.
In open source systems a broad distinction can be made between core team and development team members. Distributed contributions are those which come from outside of the core team.
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- Prahalad, C. K. & Ramaswamy, V. (2000). Co-opting customer competence. Harvard business review, 78(1), 79-90.