Comment: Working for nothing is popular

Nov 13 2008 by Herb Kim for The Journal

WE'VE had outsourcing and even nearsourcing. Now, powered by the internet, something called crowdsourcing is being used by businesses to develop ideas and products.

The term, coined in 2006 by journalist Jeff Howe in Wired, has grown in popularity ever since.

In a similar fashion to its linguistic cousins, crowdsourcing usually involves seeking out cheap labour. The big difference is that rather than contracting people to work, large numbers of volunteers are asked to do it – usually via the web – often free, occasionally for money.

It’s attractive for businesses. And understandably so. Not only do they get to tap into more knowledge and creativity than they may have within their own walls, but it can also be an excellent way for brands to improve their relationship with customers.

As you might expect, the creative industries were quick to embrace the concept. Stock photography website iStockphoto built an entire business through crowdsourcing. Its extensive library of stock photos was created by an army of 50,000 part-time photographers, fewer than 10% of whom make a living from it.

What’s perhaps more surprising is the number of groups outside the creative sector using crowdsourcing as a form of R&D.

Procter & Gamble, for example, often posts research problems on the InnoCentive website, which runs them by a global network of 140,000 scientists who take on the challenges for the fun of solving them. Recently Intel and Asus launched a project at www.WePC.com asking the public to help them design a better computer.

On the face of it this is a win-win situation. Businesses tap into a vast resource of knowledge and creativity, and the crowd gets the enjoyment of working on something a bit different from their daily grind, not to mention the kudos (and possibly payment) if their ideas are used.

Crowdsourcing isn’t without flaws, however. Pitfalls include the added costs of bringing a project to an acceptable conclusion, the difficulty of maintaining a working relationship with a crowd, and that it’s difficult for smaller companies, with less visibility, to use.

Nevertheless, with many more projects in the pipeline, you can expect to see much more of it.

When William Bernbach introduced what he called creative teams at Grey Advertising in the 1940s, he transformed the way the ad industry came up with ideas. Now crowdsourcing has the potential to do the same for virtually any firm.

Herb Kim is CEO of Codeworks, a North East centre for digital innovation