About crowdsourcing

First published on June 14, 2011 last updated June 11, 2021. 

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See history of the term and concept on Wikipedia.

The practice first appeared as a participatory action that is mediated by the Internet: people got together online to collaborate on some project - ex. open source development.

The term crowdsourcing was first coined in 2005 by Jeff Howe and Mark Robinson, editors at Wired, in a business context, referring to an organization "outsourcing work to the crowd". Outsourcing is externalizing some processes that previously were part of an organization to another organization, which implies a clear boundary between in and out, us and them. Although the outsourcing relation is mutually beneficial, it is not symmetrical. The outsourcee has an information disadvantage and is economically dependent on the outsourcer, cut-off from the market or the customer. Outsourcing can be seen as inter-firm collaboration or synergy. This leads to the notion of supply chains. This form of collaboration has become a key success factor in the global capitalist economy; it has been said that the best companies are the ones that can manage the best supply chains. 

Towards 2008 this phenomena of Internet-mediated sourcing got the attention of academia and Daren C. Brabham wrote the first review paper on the subject. He identified three patterns of crowdsourcing:

• open collaboration crowdsourcing
• competition crowdsourcing
• virtual labor market crowdsourcing

Open and collaboration crowdsourcing is the pattern that stands on the high moral ground. This is what we see in open source software and hardware development, knowledge repositories like Wikipedia, or transaction networks like Bitcoin. Open, in this context, means access to participation as well as transparency. This pattern establishes symmetric relations between participants and a plain field for opportunities and potential development. This is also the pattern used in open value networks.

The other two patterns are at odds with the multitude philosophy, or with the edicts of the p2p economy. 

Competition crowdsourcing is mostly used by companies in need of new ideas. They create a contest between individuals (sometimes organized in groups) and the best idea(s) is rewarded. These contests are usually high adrenaline events that generate a few happy winders and lots of sore losers, while trying to provide a fun experience and enriching experience. I call this type of crowdsourcing "flock milking". Examples: Xprize and the Mio project.

This practice comes from the realization that companies (i.e. closed and hierarchical organizations) can use some of the tools and techniques developed by the open source culture to coordinate a very large number of individuals and extract value from the crowd. The relation remains asymmetrical between the company, a closed, intrinsically individualistic organization and the crowd. In the eyes of the company, the role of the crowd is similar to the role of an outsourcee, although the different nature of the crowd forces the company to modify its practices.

Virtual labor market crowdsourcing is about externalizing low-skills and repetitive tasks, often through an intermediary platform with a market functionality. There, tasks (demand) are matched with skills (offer) and the platform facilitates the transaction and mediates potential disputes. Example: TaskRabit.

In both last cases, the crowdsourcing concept supposes a powerful entity (the outsourcer or the labor market provider), which has some advantage (informational, transactional, logistical, financial, access to market, etc.) over the crowd. The crowd is considered disorganized but resourceful. It is implicitly assumed that this powerful entity is necessary to channel potential out of the crowd, which is seen as incapable of producing a coherent output. For that matter, and for others too, it seams justified for this powerful entity, acting as a center of analysis, coordination and production, to keep the biggest part of the reward/revenues and to reward the crowd just enough. Let's call that the candy economy.

When it comes to motivation, there is a fundamental difference between outsourcing and crowdsourcing. The outsourcer has more influence over the outsourcee than over each individual in the crowd. Moreover, negative incentive doesn't work on the crowd. The outsourcer must become seductive, attractive and must give something in return, something that the crowd likes, which can be a bundle of intangibles (fun, learning experience, networking, exposure, badges, etc.). In some cases the crowd can insist on opening the new information or knowledge that is created during this process, to make it public, which is a form of open innovation that companies have started to appreciate, but not for altruistic reasons. Open innovation unleashed by crowdsourcing, if well conducted, is hyper-innovation, which can better tactic in a very dynamic, innovation-dependent market, as opposed to a defensive tactic based on intellectual property protection.

Structurally speaking, a these two crowdsourcing patterns exhibit a high degree of centralization. 

 

We cannot ignore the innovation potential of the crowd. Moreover, the crowd is building its production, transactional and distribution capacity. I believe that the last two patterns of crowdsourcing will fade away with the sunset of capitalism.

Sensorica is an example of an open network centered around the individual and its capacity to work in collaboration. Sensorica is not an entity exploiting the crowd, it is the crowd creating solutions for its own problems. It's mode of production is commons-based peer production (Yochai Benkler).

Open source communities don't "source" the crowd, they are the crowd working in collaboration to produce something, one entity, one system. They are not lead by any other entity. They are self-oriented and self-governed entities.

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A new component was added to the Discovery Network concept, the The Back Office Catalog. To participate, go to the FORUM.  

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Economic systems thinking (About the New Economy)

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The collapse of the patent system!

US Patent # 6,293,874

I predict a major war between corporations and the multitude over intellectual property rights similar to the copyright war between the multitude and new artists on one side, and the mainstream cultural establishment (Hollywood, Sony etc.) on the other. This war will destroy the patent system as we know it.




SCENARIO

1) We are moving towards a Knowhow Economy NOT towards a Knowledge Economy

• the Internet technology enhances communication, collaboration and coordination , which gives an economical advantage to open and social entities, which in turn means that sharing information and knowledge becomes a better strategy than controlling and going for it alone.
• knowledge becomes slippery, leaky, hard to control, it "wants to be free"
• the model to extract value from society will be primarily based on knowhow, but also on who you know and on how many people you know.

Having the recipe (knowledge) doesn't mean you are able to make (knowhow) the cake!
The world is NOT short on ideas, it is rather short on people who do stuff.

2) We already see the emergence of the open enterprise and of open collaborative communities of innovation. A good source of information is the P2P Fundation.

Creative Commons is on the raise. Creative Commons is a parallel system emerging out of the conflict between the multitude and the mainstream media/culture establishment. The multitude said: fine, keep your junk for yourself, we'll design our own framework for creation and distribution, and we'll create a separate pool of value which we'll exchange based on our new framework.

3) As more and more individuals move towards open standards and Creative Commons, sooner or later we'll have an open community pushing an open "something" on the market, for which there happens to be a patent. People part of open communities usually don't do the boring and painful patent searching to see if their ideas are already protected, they are too busy co-innovating! The company holding the patent in question will try to defend it, because the open community constitutes an economical threat. The conflict will be inevitable because the two practices of commercialization are incompatible.

3) The legal battle: They closed down Napster and they punished individuals caught downloading music for free. But everyone soon realized that it is easier to win the lottery than to be sued for having downloaded a song. They tried all sorts of fear tactics which in the end proved to be unsuccessful. Gradually, the artists themselves started to realize that the open model actually benefits them. New models of remuneration emerged, which were in tune with the new media. But let's go back to our problem, in our case, who is the company going to sue? Suppose that the open community is a diffuse entity with no head office; not registered as a legal entity. Suppose it is just a bunch of passionate scientists and engineers collaborating to find solutions to solve socially relevant problems; an ad hoc, fluid group based on a wiki (this one for example, or this one, or a million others). As a social entity it looks much like the file-sharing community. Moreover, once the open community launches an open "something" as Creative Commons, this thing will be picked up by hundreds if not thousands of other entities around the world, part of different jurisdictions. It will make no sense, economically speaking,  for the company owning the patent to defend it.

This is the flow... A new culture is emerging. Knowledge becomes free. The way we extract value from our knowledge is by our knowhow associated with it. Patents will die! We need to adapt.

See other reasons in this document "Why patenting doesn't make economical sense anymore"



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Innovation worth spreading. Free energy (provided by the sun) melting.
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Create an enterprise based on open principles and collaboration, using the Discovery Network blueprint, and attract technical expertize from all over the world. Contact the Multitude Project for assistance. We even have a specialist in optics and light interaction with matter (contact Tiberius Brastaviceanu).

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Multitude approach to develop the African continent from its roots up

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The group is made up largely of professional and business people with close links to Africa, and as the thread has illustrated ... a great deal of love and passion for the continent

The highly perceptive posts in the thread have effectively begun to develop into a SWOT analysis of Africa. It has provided participants with a glimpse of the magnitude of the problems faced by the continent and her people. At the same time it has revealed massive opportunities for those with the foresight to recognise them ... and the vision to realise them.

During the course of the discussion a number of suggestions were made as to how the situation could be turned around. It is critical that this time the ordinary people of Africa get to reap the benefits ... and not only the ruling-class elite who have to date largely continued the colonial tradition of leeching the continent dry.

It was agreed that for the continent to compete successfully on the global stage, it must not only explore new avenues of opportunity and new ways of doing things ... Africa in fact needs to completely reinvent and reposition itself.

Being a ‘business’ group, one issue that predictably surfaced was the difficulty that entrepreneurs (with bold, original ideas) experience when attempting to source funding for innovative new projects.

I proposed a solution to this problem to the group in the form of a DIASPORA BANK ... in essence a bank funded by the 60 million-odd displaced Africans around the globe with the express aim of financing disruptive new business ventures that would ordinarily struggle

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"The Open Enterprise is a new organizational design. Unlike organizations using traditional management structures, Open Enterprises replace the command and control hierarchy with a meritocracy based on collaboration and open participation.

Organizations that adopt this new organizational structure can make decisions faster and respond quicker to their markets. They look more like living dynamic networks, and less like pyramids. People working in these organizations will have (and feel) more ownership. They’re more engaged in their work, and have the freedom to work on what they want, when they want to. Most importantly this model enables people to once again bring their full humanity – values, beliefs and passions – to the workplace, removing disconnect between organizational and personal values."

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ANDREA GAGGIOLI AND GIUSEPPE RIVA propose Crowdfunding Science:

We suggest crowd-funding as a possible strategy to cope with the lack of investments in research, as well as to increase democratization in the sciences. Projects seeking funding could be stored in an online repository. Each project would include a description of its objectives, duration, and requested contribution. Investors (either people or funding agencies) could decide which projects to fund. Read more in this letter to Science...  

Andrea further adds:

The closest example of crowdfunding science is Cancer Research UK's MyProjects scheme. Launched in October 2008, MyProjects allows Cancer Research UK donors to search projects by type of cancer and location to find a specific research project to donate money.

See also S.C.I.En.C.E.

SCIEnCE – Share Collaborative Ideas, Enact Cooperative Efforts – is part of the growing movement dedicated to encouraging public sharing of testable ideas. Not just ideas, but plans of action – ideas will be developed into specific, step-by-step proposals via Wiki-inspired community editing. A new system for attributing credit will be used to distribute funding for SCIEnCE projects. The projects outlined by these collaboratively written proposals will be tackled with a cooperative experimental approach. Society will benefit much more from the ensuing scientific and medical progress than any individual could benefit from the prestige of doing it first and doing it alone. 

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Moving Beyond Open Innovation

"Opening up R&D organizations to outside ideas has become a powerful weapon in the strategic arsenal of research managers. As Henry Chesbrough writes, “[O]pen innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.” This strategy has been associated with notable commercial successes, such as Procter & Gamble’s SpinBrush, sourced not from internal R&D but rather a group of inventors in Cleveland." Read more from Moving Beyond Open Innovation

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Democratizing Innovation

From MIT Press:

"Innovation is rapidly becoming democratized. Users, aided by improvements in computer and communications technology, increasingly can develop their own new products and services. These innovating users—both individuals and firms—often freely share their innovations with others, creating user-innovation communities and a rich intellectual commons. In Democratizing Innovation, Eric von Hippel looks closely at this emerging system of user-centered innovation. He explains why and when users find it profitable to develop new products and services for themselves, and why it often pays users to reveal their innovations freely for the use of all.

The trend toward democratized innovation can be seen in software and information products—most notably in the free and open-source software movement—but also in physical products. Von Hippel's many examples of user innovation in action range from surgical equipment to surfboards to software security features. He shows that product and service development is concentrated among "lead users," who are ahead on marketplace trends and whose innovations are often commercially attractive.

Von Hippel argues that manufacturers should redesign their innovation processes and that they should systematically seek out innovations developed by users. He points to businesses—the custom semiconductor industry is one example—that have learned to assist user-innovators by providing them with toolkits for developing new products. User innovation has a positive impact on social welfare, and von Hippel proposes that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. The goal of a democratized user-centered innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license."

Get this book for FREE from Google Books now

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Open Source engineering approach to build a car?

These people must be crazy! Haha, this is what people form GM and Ford must say. And this is exactly the reason why those dinosaurs will disappear in the near future. The economy will repopulate with economical entities like riversimple.

From riversimple's website:

Open source design and development. By licensing designs to an independent open source foundation, the 40 Fires Foundation, engineers and designers from around the world can help develop the vehicles and any manufacturer around the world can make them.

Have broader company ownership. The corporate structure of Riversimple is designed to ensure that all stakeholders in the enterprise have a voice in the governance of the business and share in the benefits of its success.

Go the riversimple homepage.

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The first goal of the Multitude Moon Project is to find the best solution. Not to build anything, but to look around and see if already existing technologies can be put together to solve the most important aspects of this challenging problem. For example, can we think of new efficient ways of propulsion? Do we have the technologies to put it together? Who would be the key contributors, who has these technologies. Is there something that needs to be improved and how? Can somebody simulate the proposed solution?   


Please take a look and join if you like the initiative. 

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Outsourcing and innovation

Somebody on LinkedIn asked if innovation will be outsourced.

In some sense, outsourcing is decentralization of production, but not quite so... because in some cases, General Motors for example, you get one large entity, GM, surrounded by a constellation of suppliers, which are entirely dependent on GM, who in turn calls the shots. Outsourcing was made possible by the increased level of coordination, and by the sophisticated logistical tools we have at our disposal. Technology made it possible. Its success demonstrates that production is more efficient, more flexible, more reliable, if it is organized on a broad base of well-coordinated small and specialized entities. Does the production network need to be centralized? If there is good coordination among these entities centralization is not necessary. In other words, in today's world enhanced with the new technology it is not necessary to have a strong center of command and control, like GM for example, to have a stable network capable of innovation, production and large scale distribution. Both structures can coexist, and many variants in between, and they will compete to impose their hegemony during this transition from the old economy to the new. In the end, I believe that big verticals will fall by shedding weight, outsourcing, and finally by morphing and dissolving into decentralized super-networks.  

Outsourcing means externalizing highly formal processes. Processes that can be specified and controlled very well. People now are asking the question, can innovation also be externalized? I just think this is the WRONG question to ask, because I think the "box" paradigm is obsolete. Future organizations that will drive innovation will not look like a box, but rather like a gravitational system, therefore there is no sense in talking about internal and external.

If you want to know weather India will play a role in innovation in the future, my answer is YES. Is innovation coming to India the way outsourcing came? My answer is NO. In the near future innovation will happen within (semi-) open collaborative networks - see the Discovery Network concept. Open networks are far more creative than boxes, if there are effective processes in place. Because of that, and because of the very effective tools of communication, collaboration, and coordination we have at our disposal,  (semi-) open collaborative networks will drive innovation, and they will drag within them highly specialized units of production and distribution, prototyping units, manufacturing units, marketing units, etc. The old classical boxes, the companies, will be surpassed in creativity, and starved on resources. So don't wait for a big company to pay you in India to innovate, rather take initiative and join these collaborative networks just emerging, capable of putting an idea on the market, being limited only by coordination, using the redundancy and under-capacity already existing in our economy.

By AllOfUs