Economics 2.0

“Collaboration can occur on an astronomical scale, so if you can create an encyclopedia with a bunch of people, could you create a mutual fund? A motorcycle?” Don Tapscott and Anthony Williams, authors of Wikinomics, think so.

Smart companies are encouraging, rather than fighting, the heaving growth of massive online communities–many of which emerged from the fringes of the Web to attract tens of millions of participants overnight. Even ardent competitors are collaborating on path-breaking science initiatives that accelerate discovery in their industries. Indeed, as a growing number of firms see the benefits of mass collaboration, this new way of organizing will eventually displace the traditional corporate structures as the economy’s primary engine of wealth creation. …

Many mature firms are benefiting from this new business paradigm … Companies such as Boeing, BMW, and Procter & Gamble have been around for the better part of a century. And yet these organization and their leaders have seized on collaboration and self organization as powerful new levers to cut costs, innovate faster, co-create with customers and partners, and generally do whatever it takes to usher their organizations into the twenty-first century business environment.

Some specific examples of companies going the wiki way:

China’s burgeoning motorbike industry isn’t dominated by a handful of corporate behemoths employing thousands of employees, or outsourcing tasks to smaller subcontractors. Instead, a self-organised system has emerged in which many smaller companies collaborate to share the risks and the profits – often, admittedly, by copying Japanese designs.

When hobbyists started hacking the computerised parts at the heart of the Lego Mindstorms range, the toy company initially threatened to sue them. Then it had a change of heart, and started encouraging them to be ‘prosumers’: consumers who play far more than a superficial role in the creation of products.

The gold mine at Red Lake in Ontario, operated by Goldcorp, was ailing and facing collapse until its chief executive Rob McEwen heard a talk about Linus Torvalds, the Finnish inventor of the open-source computer operating system, Linux. Why not place Goldcorp’s secret geological data on the internet, McEwen wondered, and see if there were experts outside the company who could suggest where to mine? The ‘Goldcorp Challenge’ reaped handsome profits, turning a company worth $100m into one worth $9bn.