Definitions

The term “crowdsourcing” came into public awareness following Jeff Howe’s (2006) publication of his Wired Magazine article. Drawing from the rise of non-professional photographers in the stock photography industry, he defined the phenomenon as “the act of taking a job traditionally performed by employees and outsourcing it to an undefined, generally large group of people in the form of an open call” (ibid).

Brabham (2008) later described it as an “online, distributed problem-solving and production model”.

1http://en.wikipedia.org/wiki/Wikipedia:Maintenance

In its broadest sense, crowdsourcing can be applied to all activities that leverage the contribution of a large, distributed group of people. It is often used interchangeably with “open innovation” and “collective intelligence”, and can include Open Source Initiatives, in which software codes are shared for program development and refinement (Borst, 2010). Crowdsourcing is in fact not a new concept. Many

organizations have benefited from the contributions of the general public for activities such as content creation, idea generation and solution submission. The consumer goods company, Procter & Gamble, for example, posted its research and development questions on open innovation websites, offered a reward for the best solution and kept the intellectual property (Howe, 2008, p.9-10). The popularity of this idea in recent years is driven partly by the greater complexity of the business environment and organizations’ need to look for external expertise (Chesbrough, 2003), and partly by the wider accessibility of tools and technology that even amateurs can master (Howe, 2008). The growing interest in crowdsourcing has also led to an accumulating amount of studies trying to make sense of it (Bayus, 2012; Lakhani & Wolf, 2005; von Krogh

& von Hippel, 2006). After reviewing varying definitions and characteristics of crowdsourcing, Estellés-Arolas and González-Ladrón-de-Guevara (2012) attempted to present an exhaustive description of this activity:

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 definition covers the three key elements of crowdsourcing activities: the crowd, the initiator and the process, with an emphasis on the benefits for both the crowd and the initiating organization.

The crowd refers to participants of crowdsourcing projects. They are not employees

or workers along a company’s value chain; rather, they are a large group of

“distributed, plural, collaborative” individuals (Brabham, 2008). The so-called

“crowd” is usually regarded as non-experts or amateurs, but previous surveys showed that its composition often include people with professional credentials (Estellés-Arolas & González-Ladrón-de-Guevara, 2012). They can participate in

crowdsourcing projects as an individual, but in many cases they collaborate with each other. Franke & Sonali (2003) for example observed that a lot of product innovation happens within voluntarily assembled communities of end-users. As contributors are not constrained by contractual obligations, they choose whether or not to offer their support at free will, driven either by intrinsic or extrinsic needs (Lakhani & Wolf, 2005).

The initiator is an organization or an individual who puts up a task and asks for the crowd’s voluntary support. It can be for-profit or not-for-profit by nature, but it is often assumed that the key benefit of using online voluntary resources is cost reduction, since contributors generally receive small or no financial rewards (Borst, 2010). However, as the experience of Facebook and Cisco shows, hosting

crowdsourcing projects may require considerable resources, sometimes more than business as usual (Hosaka, 2008; Jouret, 2009). Yet with the help of volunteers, initiators enjoy the many advantages of having external talents and knowledge, such as increased efficiency, improved product quality and a more engaged and satisfied customer base (Borst, 2010; Howe, 2008).

The process of crowdsourcing can be seen as a model of problem solving, production, open innovation, business strategy, customer engagement or labor management, depending on the underlying purpose of the organizing firm. Despite the differences in how each organization orchestrates such activities, the Internet is almost present in all crowdsourcing processes. As Malone, Laubacher & Dellarocas (2010) pointed out, wider accessibility of tools and communication technologies has enabled communities to connect and collaborate, creating a virtual world of collective intelligence. The distributed nature of the Internet also allows crowdsourcing projects to scale up easily, without necessitating a broad and deep contribution (Cook, 2008). For instance, only about one in every 1,000 Wikipedia users contributes to the creation of its content, and active contributors only have to complete small tasks each time (ibid).

Crowdsourcing is capitalizing on the ability of the network to “divvy up an

overwhelming task—such as the writing of an exhaustive encyclopedia—into small enough chunks that completing it becomes not only feasible, but fun” (Howe, 2008, p.11).