Wikinomics
eBook - ePub

Wikinomics

Anthony D. Williams, Don Tapscott

Share book
  1. English
  2. ePUB (mobile friendly)
  3. Available on iOS & Android
eBook - ePub

Wikinomics

Anthony D. Williams, Don Tapscott

Book details
Book preview
Table of contents
Citations

About This Book

The knowledge, resources and computing power of billions of people are self-organizing into a massive, new collective force. Interconnected and orchestrated via blogs, wikis, chat rooms, peer-to-peer networks, and personal broadcasting, the web is being reinvented to provide the first global platform for collaboration in history.

Wikinomics is the essential analysis of the new Web 2.0 world.

Frequently asked questions

How do I cancel my subscription?
Simply head over to the account section in settings and click on “Cancel Subscription” - it’s as simple as that. After you cancel, your membership will stay active for the remainder of the time you’ve paid for. Learn more here.
Can/how do I download books?
At the moment all of our mobile-responsive ePub books are available to download via the app. Most of our PDFs are also available to download and we're working on making the final remaining ones downloadable now. Learn more here.
What is the difference between the pricing plans?
Both plans give you full access to the library and all of Perlego’s features. The only differences are the price and subscription period: With the annual plan you’ll save around 30% compared to 12 months on the monthly plan.
What is Perlego?
We are an online textbook subscription service, where you can get access to an entire online library for less than the price of a single book per month. With over 1 million books across 1000+ topics, we’ve got you covered! Learn more here.
Do you support text-to-speech?
Look out for the read-aloud symbol on your next book to see if you can listen to it. The read-aloud tool reads text aloud for you, highlighting the text as it is being read. You can pause it, speed it up and slow it down. Learn more here.
Is Wikinomics an online PDF/ePUB?
Yes, you can access Wikinomics by Anthony D. Williams, Don Tapscott in PDF and/or ePUB format, as well as other popular books in Business & Business generale. We have over one million books available in our catalogue for you to explore.

Information

Year
2011
ISBN
9780857895134

1. WIKINOMICS

The Art and Science of Peer Production

It was late in the afternoon, on a typically harsh Canadian winter day, as Rob McEwen, the CEO of Goldcorp Inc., stood at the head of the boardroom table confronting a room full of senior geologists. The news he was about to deliver was not good. In fact it was disastrous, and McEwen was having a hard time shielding his frustration.
The small Toronto-based gold-mining firm was struggling, besieged by strikes, lingering debts, and an exceedingly high cost of production, which had caused them to cease mining operations. Conditions in the marketplace were hardly favorable. The gold market was contracting, and most analysts assumed that the company’s fifty-year-old mine in Red Lake, Ontario, was dying. Without evidence of substantial new gold deposits, the mine seemed destined for closure, and Goldcorp was likely to go down with it.
Tensions were running at fever pitch. McEwen had no real experience in the extractive industries, let alone in gold mining. Nevertheless, as an adventurous young mutual fund manager he had gotten involved in a takeover battle and emerged as Goldcorp Inc.’s majority owner. Few people in the room had much confidence that McEwen was the right person to rescue the company. But McEwen just shrugged off his critics.
He turned to his geologists and said, “We’re going to find more gold on this property, and we won’t leave this room tonight until we have a plan to find it.” At the conclusion of the meeting he handed his geologists $10 million for further exploration and sent them packing for Northern Ontario.
Most of his staff thought he was crazy but they carried out his instructions, drilling in the deepest and most remote parts of the mine. Amazingly, a few weeks later they arrived back at Goldcorp headquarters beaming with pride and bearing a remarkable discovery: Test drilling suggested rich deposits of new gold, as much as thirty times the amount Goldcorp was currently mining!
The discovery was surprising, and could hardly have been better timed. But after years of further exploration, and to McEwen’s deep frustration, the company’s geologists struggled to provide an accurate estimate of the gold’s value and exact location. He desperately needed to inject the urgency of the market into the glacial processes of an old-economy industry.
In 1999, with the future still uncertain, McEwen took some time out for personal development. He wound up at an MIT conference for young presidents when coincidentally the subject of Linux came up. Perched in the lecture hall, McEwen listened intently to the remarkable story of how Linus Torvalds and a loose volunteer brigade of software developers had assembled the world-class computer operating system over the Internet. The lecturer explained how Torvalds revealed his code to the world, allowing thousands of anonymous programmers to vet it and make contributions of their own.
McEwen had an epiphany and sat back in his chair to contemplate. If Goldcorp employees couldn’t find the Red Lake gold, maybe someone else could. And maybe the key to finding those people was to open up the exploration process in the same way Torvalds “open sourced” Linux.
McEwen raced back to Toronto to present the idea to his head geologist. “I’d like to take all of our geology, all the data we have that goes back to 1948, and put it into a file and share it with the world,” he said. “Then we’ll ask the world to tell us where we’re going to find the next six million ounces of gold.” McEwen saw this as an opportunity to harness some of the best minds in the industry. Perhaps understandably, the in-house geologists were just a little skeptical.
Mining is an intensely secretive industry, and apart from the minerals themselves, geological data is the most precious and carefully guarded resource. It’s like the Cadbury secret—it’s just not something companies go around sharing. Goldcorp employees wondered whether the global community of geologists would respond to Goldcorp’s call in the same way that software developers rallied around Linus Torvalds. Moreover, they worried about how the contest would reflect on them and their inability to find the illusive gold deposits.
McEwen acknowledges in retrospect that the strategy was controversial and risky. “We were attacking a fundamental assumption; you simply don’t give away proprietary data,” he said. “It’s so fundamental,” he adds, “that no one had ever questioned it.” Once again, McEwen was determined to soldier on.
In March 2000, the “Goldcorp Challenge” was launched with a total of $575,000 in prize money available to participants with the best methods and estimates. Every scrap of information (some four hundred megabytes worth) about the 55,000–acre property was revealed on Goldcorp’s Web site. News of the contest spread quickly around the Internet, as more than one thousand virtual prospectors from fifty countries got busy crunching the data.
Within weeks, submissions from around the world came flooding in to Goldcorp headquarters. As expected, geologists got involved. But entries came from surprising sources, including graduate students, consultants, mathematicians, and military officers, all seeking a piece of the action. “We had applied math, advanced physics, intelligent systems, computer graphics, and organic solutions to inorganic problems. There were capabilities I had never seen before in the industry,” says McEwen. “When I saw the computer graphics I almost fell out of my chair.” The contestants had identified 110 targets on the Red Lake property, 50 percent of which had not been previously identified by the company. Over 80 percent of the new targets yielded substantial quantities of gold. In fact, since the challenge was initiated an astounding eight million ounces of gold have been found. McEwen estimates the collaborative process shaved two to three years off their exploration time.
Today Goldcorp is reaping the fruits of its open source approach to exploration. Not only did the contest yield copious quantities of gold, it catapulted his underperforming $100 million company into a $9 billion juggernaut while transforming a backward mining site in Northern Ontario into one of the most innovative and profitable properties in the industry. Needless to say McEwen is one happy camper. As are his shareholders. One hundred dollars invested in the company in 1993 is worth over $3,000 today.
Perhaps the most lasting legacy of the Goldcorp Challenge is the validation of an ingenious approach to exploration in what remains a conservative and highly secretive industry. Rob McEwen bucked an industry trend by sharing the company’s proprietary data and simultaneously transformed a lumbering exploration process into a modern distributed gold discovery engine that harnessed some of the most talented minds in the field.
McEwen saw things differently. He realized the uniquely qualified minds to make new discoveries were probably outside the boundaries of his organization, and by sharing some intellectual property he could harness the power of collective genius and capability. In doing so he stumbled successfully into the future of innovation, business, and how wealth and just about everything else will be created. Welcome to the new world of wikinomics where collaboration on a mass scale is set to change every institution in society.

THE NEW WORLD OF WIKINOMICS

Due to deep changes in technology, demographics, business, the economy, and the world, we are entering a new age where people participate in the economy like never before. This new participation has reached a tipping point where new forms of mass collaboration are changing how goods and services are invented, produced, marketed, and distributed on a global basis. This change presents far-reaching opportunities for every company and for every person who gets connected.
In the past, collaboration was mostly small scale. It was something that took place among relatives, friends, and associates in households, communities, and workplaces. In relatively rare instances, collaboration approached mass scale, but this was mainly in short bursts of political action. Think of the Vietnam-era war protests or, more recently, about the raucous antiglobalization rallies in Seattle, Turin, and Washington. Never before, however, have individuals had the power or opportunity to link up in loose networks of peers to produce goods and services in a very tangible and ongoing way.
Most people were confined to relatively limited economic roles, whether as passive consumers of mass-produced products or employees trapped deep within organizational bureaucracies where the boss told them what to do. Even their elected representatives barely concealed their contempt for bottom-up participation in decision making. In all, too many people were bypassed in the circulation of knowledge, power, and capital, and thus participated at the economy’s margins.
Today the tables are turning. The growing accessibility of information technologies puts the tools required to collaborate, create value, and compete at everybody’s fingertips. This liberates people to participate in innovation and wealth creation within every sector of the economy. Millions of people already join forces in self-organized collaborations that produce dynamic new goods and services that rival those of the world’s largest and best-financed enterprises. This new mode of innovation and value creation is called “peer production,” or peering—which describes what happens when masses of people and firms collaborate openly to drive innovation and growth in their industries.1
Some examples of peer production have recently become household names. As of August 2006, the online networking extravaganza MySpace had one hundred million users—growing a half a million a week—whose personal musings, connections, and profiles are the primary engines of value creation on the site. MySpace, YouTube, Linux, and Wikipedia—today’s exemplars of mass collaboration—are just the beginning; a few familiar characters in the opening pages of the first chapter in a long-running saga that will change many aspects of how the economy operates. In the forthcoming pages of this book we describe seven unique forms of peer production that are making the economy more dynamic and productive. Along the way we offer engaging stories for the casual reader and great insights for the businessperson seeking to harness this new force in their business.

Age of Participation

Call them the “weapons of mass collaboration.” New low-cost collaborative infrastructures—from free Internet telephony to open source software to global outsourcing platforms—allow thousands upon thousands of individuals and small producers to cocreate products, access markets, and delight customers in ways that only large corporations could manage in the past. This is giving rise to new collaborative capabilities and business models that will empower the prepared firm and destroy those that fail to adjust.
The upheaval occurring right now in media and entertainment provides an early example of how mass collaboration is turning the economy upside down. Once a bastion of “professionalism,” credentialed knowledge producers share the stage with “amateur” creators who are disrupting every activity they touch. Tens of millions of people share their news, information, and views in the blogosphere, a self-organized network of over 50 million personal commentary sites that are updated every second of the day.2 Some of the largest weblogs (or blogs for short) receive a half a million daily visitors,3 rivaling some daily newspapers. Now audioblogs, podcasts, and mobile photo blogs are adding to a dynamic, up-to-the-minute stream of person-to-person news and information delivered free over the Web.
Individuals now share knowledge, computing power, bandwidth, and other resources to create a wide array of free and open source goods and services that anyone can use or modify. What’s more, people can contribute to the “digital commons” at very little cost to themselves, which makes collective action much more attractive. Indeed, peer production is a very social activity. All one needs is a computer, a network connection, and a bright spark of initiative and creativity to join in the economy.
These new collaborations will not only serve commercial interests, they will help people do public-spirited things like cure genetic diseases, predict global climate change, and find new planets and stars. Researchers at Olson Laboratory, for example, use a massive supercomputer to evaluate drug candidates that might one day cure AIDS. This is no ordinary supercomputer, however. Their FightAIDS@home initiative is part of the World Community Grid, a global network where millions of individual computer users donate their spare computing power via the Internet to form one of the world’s most powerful computing platforms.
These changes, among others, are ushering us toward a world where knowledge, power, and productive capability will be more dispersed than at any time in our history—a world where value creation will be fast, fluid, and persistently disruptive. A world where only the connected will survive. A power shift is underway, and a tough new business rule is emerging: Harness the new collaboration or perish. Those who fail to grasp this will find themselves ever more isolated—cut off from the networks that are sharing, adapting, and updating knowledge to create value.
This might sound like hyperbole, but it’s not. Consider some additional ways ordinary citizens can now participate in the global body Ă©conomique.
Rather than just read a book, you can write one. Just log on to Wikipedia—a collaboratively created encyclopedia, owned by no one and authored by tens of thousands of enthusiasts. With five full-time employees, it is ten times bigger than Encyclopedia Britannica and roughly the same in accuracy.4 It runs on a wiki, software that enables users to edit the content of Web pages. Despite the risks inherent in an open encyclopedia in which everyone can add their views, and constant battles with detractors and saboteurs, Wikipedia continues to grow rapidly in scope, quality, and traffic. The English-language version has more than a million entries, and there are ninety-two sister sites in languages ranging from Polish and Japanese to Hebrew and Catalan.
Or perhaps your thing is chemistry. Indeed, if you’re a retired, unemployed, or aspiring chemist, Procter & Gamble needs your help. The pace of innovation has doubled in its industry in the past five years alone, and now its army of 7,500 researchers is no longer enough to sustain its lead. Rather than hire more researchers, CEO A. G. Lafley instructed business unit leaders to source 50 percent of their new product and service ideas from outside the company. Now you can work for P&G without being on their payroll. Just register on the InnoCentive network where you and ninety thousand other scientists around the world can help solve tough R&D problems for a cash reward. InnoCentive is only one of many revolutionary marketplaces matching scientists to R&D challenges presented by companies in search of innovation. P&G and thousands of other companies look to these marketplaces for ideas, inventions, and uniquely qualified minds that can unlock new value in their markets.
Media buffs are similarly empowered. Rather than consume the TV news, you can now create it, along with thousands of independent citizen journalists who are turning the profession upside down. Tired of the familiar old faces and blather on network news? Turn off your TV, pick up a video camera and some cheap editing software, and create a news feature for Current TV, a new national cable and satellite network created almost entirely by amateur contributors. Though the contributors are unpaid volunteers, the content is surprisingly good. Current TV provides online tutorials for camera operation and storytelling techniques, and their guidelines for creating stories help get participants started. Viewers vote on which stories go to air, so only the most engaging material makes prime time.
Finally, a young person in India, China, Brazil, or any one of a number of emerging Eastern European countries can now do what their parents only dreamed of by joining the global economy on an equal footing. You might be in a call center in Bangalore that takes food orders for a drive-through restaurant in Los Angeles. Or you could find yourself working in Foxconn’s new corporate city in the Schenzen province of China, where a decade ago farmers tilled the land with oxen. Today 180,000 people work, live, learn, and play on Foxconn’s massive high-tech campus, designing and building consumer electronics for teenagers around the globe.
For incumbents in every industry this new cornucopia of participation and collaboration is both exhilarating and alarming. As New Paradigm executive David Ticoll argues, “Not all examples of self-organization are benign, or exploitable. Within a single industry the development of opportunities for self-organized collaboration can be beneficial, neutral, or highly competitive to individual firms, or some combination of at least two of these.” Publishers found this out the hard way. Blogs, wikis, chat rooms, search engines, advertising auctions, peer-to-peer downloading, and personal broadcasting represent new ways to entertain, communicate, and transact. In each instance the traditionally passive buyers of editorial and advertising take active, participatory roles in value creation. Some of these grassroots innovations pose dire threats to existing business models.
Publishers of music, literature, movies, software, and television are like proverbial canaries in a coal mine—the first casualties of a revolution that is sweeping across all industries. Many enfeebled titans of the industrial economy feel threatened. Despite heroic efforts to change, they remain shackled by command-and-control legacies. Companies have spent the last three decades remolding their operations to compete in a hyper-competitive economy—ripping costs out of their businesses at every opportunity; trying to become more “customer-friendly”; assembling global production networks; and scattering their bricks-and-mortar R&D organizations around the world.
Now, to great chagrin, industrial-era titans are learning that the real revolution is just getting started. Except this time the competition is no longer their arch industry rivals; it’s the uberconnected, amorphous mass of self-organized individuals that is gripping their economic needs firmly in one hand, and their economic destinies in the other. “We the People” is no longer just a political expression—a hopeful ode to the power of “the masses”; it’s also an apt de...

Table of contents