Crowdsourcing - an Internet extention of outsourcing

Sometimes a new trend catches on so quickly that, if you sit well back and wear protective goggles, you can just catch its vapour trail as it zips through the culture. That has just happened with a concept known as "crowdsourcing" that you’re about to hear a lot more of.

A month ago, nobody had even heard of it. Indeed, on May 18, Google could find only three web pages that mentioned it. Suddenly, though, there are 400,000 "crowdsourcing" references on the net and rising. What on Earth could have popularised a new coinage so quickly?

The answer is another astute article in Wired, the digital-culture magazine that keeps tapping presciently into significant innovations. Last year, this column explored "the long tail", an emerging business concept defined by Wired’s editor, Chris Anderson, as the slowly diminishing trail of demand for niche products, such as obscure DVDs, that, thanks to the net, can now find an audience without any of the traditional marketing costs.

A year on, Wired journalist Jeff Howe has identified a new way in which businesses are using the net to connect thousands of strangers in order to make cash. But this time, rather than customers, the strangers are serving as a cheap pool of labour.

Think of it as an extension of outsourcing, whereby a business contracts out certain tasks to save money. Rather than going offshore to find cheap workers, the clued-in digital business is now simply using the vast pool of skills available from the online public.

Anyone with a modem and net connection is invited to perform a task or provide a digital product in return for a small fee. Yet because the online crowd is now so huge, businesses are finding what they’re asking for despite the pitiful wages.

Take the business of stock photography. In the old world, if your magazine or corporate brochure needed a few images to perk it up, a conventional picture library would sell you the reproduction rights for perhaps £100 each. Suddenly, that has all changed, thanks to new online libraries such as iStockphoto that have cut the price to as low as 60p.

The secret? The 22,000 amateur photographers who between them have uploaded 851,000 royalty-free snaps to the site, all now available for anyone to browse and acquire. The photographers earn a few pennies, the customer gets a bargain. And in the middle, the stock library provides the online exchange that makes it all possible.

Science companies are also looking to the crowd as a source of low-cost labour. InnoCentive is a web-based community where businesses such as Procter & Gamble and Boeing post R&D problems and seek help from the crowd in solving them in exchange for cash. Jill Panetta, InnoCentive’s chief scientific officer, claims that the site has solved at least 30 per cent of the challenges set, many of them worked through by hobbyists rather than professionals.

Other online exchanges are even more wide-ranging. Amazon Mechanical Turk, an offshoot of the bookstore, lets anyone post requests for others to perform what it calls "human intelligence tasks", from transcribing podcasts to verifying legal documents. Take the job, and you’ll earn anything from pennies to pounds.

Karl Marx might have had concerns: as competition squeezes wages, it’s hard to see how workers might empower themselves. But that’s capitalism for you. Somewhere along the line, the commune became just another online exchange.

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