The boundaries of crowdsourcing and how it relates to open innovation

I was recently asked to do an interview for the Turkish version of CNBC eBusiness magazine on crowdsourcing. I’m not sure whether the article will appear online – I’ll share it if so. In any case here are the answers I gave the interviewer:

1) The term “crowdsourcing” first coined by Jeff Howe in a June 2006 Wire Magazine article. Does “crowdsourcing” is a new way of saying “open innovation”? Do these two terms have the same meaning? Or does crowdsourcing differs from open innovation?

Crowdsourcing and open innovation are related but distinct concepts. Crowdsourcing covers many approaches, which I summarize as ‘tapping the minds of many’. These can include service marketplaces, competition platforms, idea platforms, and prediction markets. In fact, all of these approaches can be applied inside organizations as well as externally, helping to tap some of the ‘cognitive surplus’ of employees. Open innovation is about looking outside the organization for new ideas and products, in what can be any number of ways. Often this is done on crowdsourcing platforms, but sometimes, as Procter & Gamble does, it is largely about seeking the best existing unexploited products in the market and adapting them for its own marketing pipeline.

2) Some of the well-known companies partner with universities to call for students to participate in their award winning competitions. Is it an example of crowdsourcing? Or does crowdsourcing mean calling for crowds within an undefined boundaries? Because the term “university” shapes the boundaries, like the education level of people is determined when you call for only university students to participate to your competition.

Crowdsourcing is not necessarily about fully open groups. As long as the process taps a “crowd”, in other words many people, then it is crowdsourcing. In fact crowdsourcing results can often be better when you narrow the pool to more qualified people. Victors & Spoils, the first crowdsourced advertising agency, only works with and wants to get contributions from the best. While graphic design crowdsourcing platform 99designs is open to all, Logoworks uses only a select group of designers. The best approach depends on what you want to achieve.

3) Crowdsourcing is currently employed by a large number of companies. If you think about the life cycle of crowdsourcing, which level is it at right now? Introduction, growth or maturity?

In a corporate context, the use of crowdsourcing is still in the very early days, but beginning to pick up rapidly. While we can mention large companies such as IBM, Procter & Gamble, Boeing that are using crowdsourcing extensively, many others have not even begun the journey. In years ahead these approaches will fundamentally change how work is done and how organizations function. For now,the process is only just under way.

4) You wrote an article about Turkey with the title “Five reasons why Turkey is one of the hottest Internet markets in the world“. In this article you mentioned that Turkish internet users have the highest level of engagement in Europe and the other point is Turkey has a young population with an average of 28 years old. If we think about these two facts and when we consider the internet is an important tool for crowdsourcing, what is the potential of Turkey in terms of “crowdsourcing”?

May these two facts encourage Turkish companies to utilize crowdsourcing?

Certainly the structure of the Turkish economy and the very high degree of online activity in the country suggest there are very fertile grounds for Turkish companies to create value through crowdsourcing approaches. The very high uptake of social networks in Turkey shows both familiarity with online tools, and a propensity to share. In addition, only Turkish companies are in a ready position to tap the tens of millions of talented people whose primary language is Turkish. However the fact that there is substantial potential does not mean that companies will take it. It is up to Turkish companies to seize the opportunity.