The bloggers have the right idea, says wikinomist

31 Mar 2008

The collective approach to new ventures, sharing of knowledge and DIY networking ethic of the blogging community are all underpinning the rise of the mass collaboration trend driving the industries of the future, the co-author of best-selling business book Wikinomics, told

Anthony Williams, who was in Dublin in recent weeks to address the annual Irish Software Association conference at UCD, collaborated with Don Tapscott, best-selling author of The Digital Economy, to write Wikinomics – How Mass Collaboration Changes Everything.

The book, which is fast becoming a business bible for the 21st century, explores how businesses have used mass collaboration and open source technologies to be successful and has been reviewed in major media outlets, including the Guardian.

Williams said he and Tapscott had been doing studies for two decades into economic trends by pulling together global companies and governments and collectively researching a topic for investigation.

“In 2005, we noticed a distinct change in the internet with the rise of Web 2.0. Parallel to this, there was the growth of the blogosphere, the development of Linux and the rise of resources like the online encyclopaedia Wikipedia.

“This all pointed to a new trend and new mode of production where products and services traditionally created by large firms were increasingly being created over the internet by worldwide networks of individuals. We believe this is unique and important and will shape the way companies approach innovation.”

Williams cited IBM’s foray into the Linux community, which began in the Nineties. “At that point few other IT companies had taken an interest in Linux and dismissed it as an amateur/hacker fad.

“But IBM saw something in how developers were going about it. The company had challenges of its own at the time from operating systems to servers and was looking for a new way to be successful. It decided to work with Linux developers and set up a small team which spent time working with the community while other people were questioning Linux and open source.

“The company ended up building a profitable business which complements everything from servers to consulting services and have bundled it in with its hardware products, resulting in US$1bn of revenue every year.

“We estimated that had IBM done that internally, it would have cost it US$1bn of capital expenditure on human capital, rather than the US$100m investment it made in the community.

“Other companies also succeeded by working with the open source community, including Red Hat. Proprietary software companies like Microsoft resisted this trend as it seemed a threat to their business, while IBM found a way to create a lucrative complementary line of business.

“It proves that smart companies can shift the locus of competition and change the rules of the game,” Williams said.

He added that mass collaboration over the internet using resources like blogging and wikis could be the greatest change in the architecture of the corporation since the industrial revolution.

“It sounds like a bold claim but what we’re seeing today, with the way companies innovate, there’s a change in the whole paradigm. They realise that if they want to be successful, they have to find new ways of harnessing skills and developing talent and resources to keep up with change.”

Williams cited Procter & Gamble, which found a way to expand its R&D talent pool. “Its head of innovation told me how it has 9,000 world-class researchers in-house. But for every single one of them, it knows of another 200 who are just as good. Harnessing this resource cleverly means the company could have access to 1.8 million people who could potentially influence new products and services.

Williams said this open approach to innovation could also bring about greater economic cohesion between developed and developing economies.

“We feel every company in the world will find new ways of tapping into external sources of talent. We live in a world of seven billion people but there are still significant gulfs between the haves and have-nots. Yet at the same time, there’s a large number of people graduating with degrees all around the world. There’s a huge labour pool out there to tap into.

“The old paradigm of hiring and retaining the best and brightest may give way to a more fluid model. Businesses will start to look beyond the boundaries of their company and get a wider contribution to the development of new products and services.”

Looking beyond the boundaries of their own organisations to court new talent and in turn contribute externally is what Tapscott and Williams term “crowdsourcing”.

“My advice to businesses today is to look at the growth of online communities who are finding ways to create products and services in a much more grassroots fashion. The blogosphere is a perfect example of this.”

By John Kennedy