Crowdsourcing. An Innovative Business Approach

Essay, 2014

9 Pages, Grade: Honours



Crowd sourcing is an evolving platform that is helping business problems solve faster, with best quality and at the least possible cost. It is emerging as a new on-line distributed network, where crowd of people join hands to complete a task. The scalable workforce is highly accessible; thereby enterprises are readily implicating the concept in their projects. No one knows everything, everyone knows something and all the knowledge resides in humanity. Crowd Wisdom reflects on the dramatic, economic, cultural and political implications of applying the open source idea to a variety of fields other than the IT sector and addresses the unique opportunities in building a new Business Model. This paper provides an insight to both theoretical and exemplar cases distinguishing it from open source production. The paper also set possibilities to explore the potential of setting a business model, as a new trend setter by canvassing a large crowd of people with ideas, skills and participation. It also exploits crowd of innovators and the potential of using it beyond profit sectors.

Crowd Sourcing -An Innovative Business Approach

1. Introduction

Crowd sourcing describes a new web-based business model that harnesses the creative solution of a distributed network of individuals though what amounts to an open call for proposals. The year 1998 witnessed the concept, when the American pharmaceutical company Eli Lily created a Crowdsourcing platform named as InnoCentive for dealing their issues. The word comes in limelight in the year 2006 in an article by Jeff Howe and Mark Robinson in the Wired magazine. Howe offers the following definition:

Simply defined, crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined(and generally large) network of people in form of an open call. This can take form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of open call format and the large network of potential laborers. (Howe 2006).

Enrique Estelles-Arolas and Fernando Gonzalez Ladron-de-Guevara developed a new integrating definition:

"Crowdsourcing is a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self-esteem, or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage that what the user has brought to the venture, whose form will depend on the type of activity undertaken".

The first part of the paper defines Crowdsourcing and also highlights a few exemplar cases and later on the paper reviews some related concepts and their comparison to Crowdsourcing. And the last section will discuss about the advantages and limitations of the concept.

1.1 All Knowledge resides in Humanity

No one knows everything, everyone knows something and all the knowledge resides in humanity. This basic idea drives the concept of Crowdsourcing worldwide. The principle of crowdsourcing is that more heads are better than one. By canvassing a large crowd of people for ideas, skills, or participation, the quality of content and idea generation will be superior. The SETI@home project is one example of a distributed network of volunteers. It also represents the fastest supercomputer we have today. Millions of connected humans now form an abundant, distributed network of processing, bandwidth, storage and brain power that can be combined for common purpose in a decentralized, non market model. Some other examples also lead the concept such as NASA’s image mapping, Apache, Wikipedia and Skype. In this approach volunteers work with an open approach, without the contradiction of ownership out performing traditional firm based methods. James Surowiecki(2004), in his book The Wisdom of Crowds laid the foundation of Crowd Wisdom where any problem was solved using the brain and effort power of a large body of solution seekers. Based on his book and researches (Columbia Shuttle Disaster), he finds that “under the right circumstances, groups are remarkably intelligent, and often are smarter than the smartest people in them.” A very big thanks to the web based technologies which provide a big platform for millions of individuals who want to work together around the globe. The different valuable ideas and expertise gets a way along and people come together for accomplishment of common goals. The community has started reacting and working together with the openness of systems.


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Crowdsourcing. An Innovative Business Approach
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crowdsourcing, innovative, business, approach
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Dr. Raisi Dangi (Author), 2014, Crowdsourcing. An Innovative Business Approach, Munich, GRIN Verlag,


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