13 July 2006

Crowdsourcing: consumers as creators [Business Week]

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Writer Paul Boutin writes in Business Week about a “new trend [that] allows customers to help design the products they buy” and analyses a paper on the topic of crowdsourced product design, written by Susumu Ogawa, a professor of marketing at Kobe University in Tokyo, and Frank Piller, a professor at TUM Business School in Munich, and recently published in MIT’s Sloan Management Review.

“Crowdsourcing is the unofficial (but catchy) name of an IT-enabled business trend in which companies get unpaid or low-paid amateurs to design products, create content, even tackle corporate R&D problems in their spare time.”

“Crowdsourcing is a subset of what Eric von Hippel calls ‘user-centered innovation,’ in which manufacturers rely on customers not just to define their needs, but to define the products or enhancements to meet them. But unlike the bottom-up, ad-hoc communities that develop open-source software or better windsurfing gear, crowdsourced work is managed and owned by a single company that sells the results.”

“To paraphrase von Hippel, it relies on would-be customers’ willingness to hand over their ideas to the company, either cheaply or for free, in order to see them go into production.”

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