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Synthetic Overview of the Collaborative Economy: Appendixes

Synthetic Overview of the Collaborative Economy: Appendixes

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Published by P2P_Foundation
The report “Synthetic overview of the collaborative economy“, coproduced by Orange Labs and the P2P Foundation, provides a thorough mapping of the actors involved in this cooperative economy: for the first time, nearly all the dots of the emerging collaborative economy, and their inter-relation, are presented in a single overview.
The report “Synthetic overview of the collaborative economy“, coproduced by Orange Labs and the P2P Foundation, provides a thorough mapping of the actors involved in this cooperative economy: for the first time, nearly all the dots of the emerging collaborative economy, and their inter-relation, are presented in a single overview.

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Published by: P2P_Foundation on Oct 17, 2012
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11/27/2012

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1. Appendix: Third Party Open Innovations
Compiled by Michel Bauwens 
From an article in Wired magazine:
“Pharmaceutical maker Eli Lilly funded InnoCentive’s launch in 2001 as a way to connectwith brainpower outside the company – people who could help develop drugs and speedthem to market. From the outset, InnoCentive threw open the doors to other firms eager toaccess the network’s trove of ad hoc experts. Companies like Boeing, DuPont, and Procter &Gamble now post their most ornery scientific problems on InnoCentive’s Web site; anyoneon InnoCentive’s network can take a shot at cracking them.The companies – or seekers, in InnoCentive parlance – pay solvers anywhere from $10,000to $100,000 per solution. (They also pay InnoCentive a fee to participate.) Jill Panetta,InnoCentive’s chief scientific officer, says more than 30 percent of the problems posted onthe site have been cracked, “which is 30 percent more than would have been solved using atraditional, in-house approach.
The solvers are not who you might expect. Many are hobbyists working from their proverbial garage, like the University ofDallas undergrad who came up with a chemical to use inart restoration, or the Cary, North Carolina, patent lawyer whodevised a novel way to mix large batches of chemical compounds.This shouldnt be surprising, notes Karim Lakhani, a lecturer in technology and innovation at MIT, who has studiedInnoCentive. “The strength of a network like InnoCentive’s is exactly the diversity of intellectual background,” he says.Lakhani and his three coauthors surveyed 166 problems posted to InnoCentive from 26 different firms. “We actuallyfound the odds of a solver’s success increased in fields in which they had no formal expertise,” Lakhani says. He has puthis finger on a central tenet of network theory, what pioneering sociologist Mark Granovetter describes as “the strength ofweak ties.” The most efficient networks are those that link to the broadest range of information, knowledge, andexperience” 
How it Works, by Peter Turner:
“Companies (like Proctor & Gamble an early entrant) contract as “seekers” to post R&Dchallenges gaining access to a growing global community of currently 80,000 scientist“solvers.” Many of these professionals were attained through agreements with universitiesand research institutions throughout the world.The process provides IP protection for the “seekers.” They review together with InnoCentivesolutions returned by “solvers” and selects the best solution. Innocentive issues the award tothe winning “solver” which has reached payments as high as $100,000US.Once a solver executes a services agreement a private online room is created to interact withInnoCentive staff and permit the review by the approved solvers of the seeker’s confidentialmaterial
 
The solvers proposed solutions are posted and then reviewed by InnoCentive who workwith the solver to refine as needed. Innocentive selects the best submission and awards are paid to the solver. Identities of both parties are kept confidential until a verified submissionhas been accepted and award paid; InnoCentive bills the seeker for that amount plus its fee. An indemnity agreement is obtained from the solver to protect both the seeker andInnoCentive. 
Example of a project:
“Take Colgate-Palmolive (CL). The company needed a more efficient method for getting itstoothpaste into the tube — a seemingly straightforward problem. When its internal R&Dteam came up empty-handed, the company posted the specs on InnoCentive, one of manynew marketplaces that link problems with problem-solvers. A Canadian engineer named Ed Melcarek proposed putting a positive charge on fluoride powder, then grounding the tube. Itwas an effective application of elementary physics, but not one that Colgate-Palmolive'steam of chemists had ever contemplated. Melcarek was duly rewarded with $25,000 for a few hours work.
Discussion and Debates
1. Innocentive isolates the problem solvers from each other
Commentary by Sami Viitamaki:
“Innocentive fits the category of crowdsourcing that does not fully utilize the community’swisdom of crowds. The solvers pursue the solution in isolation from each other, and the possibility of using the community to gather comments on the alternatives, build on othersideas, find a winning solution by community rating, etc. is absent.In my thesis I call these kind of companies Crowdsourcing Brokers, for they really simply gather up alternative solutions from a large member base for their own clientsneeds andleave deciding on the winning solution to the clients. Given the nature of the competition inthese kind of efforts and the considerable monetary rewards involved, the approach isnaturally understandable. Other ‘brokerapproach companies are e.g. iStockphoto andHolotof advertising.
2. Summary of a study by Karim Lakhani:
“Karim Lakhani and his team at Harvard Business School have been studying this phenomenon in the context of scientific problem solving (working paper here) based on data from Innocentives winning entries (30% of all problems on Innocentive have been solved).Below are some of their findings of the study followed by my commentary on itsapplicability to analytics:In short, diversity of problem solvers area of expertise was key. Analytics lends well todiversity as it is a very multi-disciplinary field with potential applications from a variousbranches of science i.e. economics, mathematics, engineering, psychology, operationsresearch etc.

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