Saturday, September 12, 2009

The Future of Crowdsourcing

Crowdsourcing, for those who are new to the term, is the concept of entities outsourcing problems to a large and typically unrelated group of people. For example, Netflix has an ongoing competition - open to anyone - to develop an algorithm to predict customers ratings based on their past ratings that bests Netflix's proprietary algorithm by 10%. The prize is a million dollars.

Crowdsourcing is not a new concept. The Longitude prize was an open competition established by Great Britain in the 18th century to solve the maritime problem of discerning longitude at sea. John Harrison was awarded the prize for his invention of the Chronometer. He wasn't treated well either. The dude solved the problem and was delayed the prize money for a full 30 years.

John Harrison's poor treatment by Great Britain illustrates one potential problem with crowdsourcing however there are others - little to no contracts, lack of continuity with contributors, potential lack of interest thus little to no participation, low to no wages, and risk of malicious intent.

The global recession has resulted in rapid growth of crowdsourcing due to two major factors:

  1. It is often cheaper for companies to crowdsource solutions as opposed to directly hiring or contracting with professionals.
  2. There are lots of people out of work so the pool of willing participants is high.

When the economy turns around will the resources currently involved in crowdsourcing dry up? Will the competition for intellectual property and time to market pressures move corporations back to more traditional methods that are more easily managed?

My answer to both questions is no.

With corporations having the ability to tap into a world population for ideas and solutions there is bound to be better results than with a small set of specialists. Crowdsourcing offers the possibility of tapping into brilliance without having to interview for that special person who will develop that next killer product.

As far as the contributor is concerned, crowdsourcing offers recognition, flexibility, collaboration, pay, and other self-satisfying attributes. The city of Los Angeles provided a survey to it's population asking questions such as "What services should be cut to balance the budget?" with a list of city services from which the constituent may choose. This type of crowdsourcing relies on non-monetary rewards but still has a high rate of participation.

One of the more interesting things to consider is how crowdsourcing will effect various occupations such as those in the creative design industries. When creativity is outsourced to the world, there is a potential for deleterious effects on wages and the number of permanent positions in those fields.

In my opinion, crowdsourcing, like social media, is in its Wild West phase. There will be significant movement and change along the way and its current incarnation will be unrecognizable 5-10 years from now.

As crowdsourcing models mature and become easier to manage the majority of us will be involved in some sort of crowdsourcing as an inherent part of our lifestyle. Just as I continue to manage my LinkedIn contacts and update my status on Facebook, I will likely also be contributing to my favorite crowdsourcing activities.

1 comment:

  1. Coincidentally, on Monday 9/21/2009, the Netflix contest was awarded to a multi-national team called BellKor’s Pragmatic Chaos. Congratulations!


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