The wisdom of crowdsourcing

Two heads are better than one, as the saying goes. But what if you could tap into the combined expertise of hundreds or thousands of people? Crowdsourcing allows companies to do just that – whether you are looking to solve a problem, find fresh ideas and inspiration or a new source of labour.

When the Canadian gold mining company Goldcorp was struggling to find new reserves, its CEO Rob McEwen made an extraordinary decision. With the company’s market value shrinking and geologists undecided about where to dig, he released its confidential geological data to the public in the hope that they could help.

The Goldcorp Challenge, launched in March 2000, offered $575,000 to those with the best ideas on how to find gold and attracted entries from geologists, students, mathematicians and even military officers. The virtual gold rush identified 110 sites and helped turn Goldcorp from a struggling business to one of the most profitable in the industry.

The Goldcorp case shows how the power of crowds can help overcome obstacles that seem insurmountable to individuals or smaller teams. McEwen himself had been inspired by Linus Torvalds, who led the massive online collaboration project to create the Linux computer operating system.

Of course public competitions and collaboration are nothing new, but the advent of the internet has allowed us to harness the power of crowds in new and different ways. It was journalist Jeff Howe who first coined the term ‘crowdsourcing’ when commenting on the trend in an article in Wiredmagazine in 2006.

Today a host of crowdsourcing websites allow businesses to do everything from outsourcing work to searching for new ideas and inspiration and even finding funding. Writing, content creation, translations and graphic design are all examples of tasks which can be outsourced to crowds. Sites such as the Australian-run DesignCrowd and 99designs act as an online marketplace connecting companies looking to commission work with a vast pool of freelance talent.

Similarly Amazon’s Mechanical Turk offers businesses ‘access to a global on-demand 24 x 7 workforce’, though it focuses on more routine tasks such as writing product descriptions or cataloguing items.

According to the website “Crowdsourcing’s biggest benefit is the ability to receive better quality results, since several people offer their best ideas, skills, and support. Crowdsourcing allows you to select the best result from a sea of ‘best entries,’ as opposed to receiving the best entry from a single provider. Results can be delivered much quicker than traditional methods, since crowdsourcing is a form of freelancing.”

One of the most promising applications for crowdsourcing, however, has been in research and development. Many science and technology companies now put their problems before an army of ‘solvers’. InnoCentive, which claims to be the global leader in crowdsourcing innovation problems, has worked with organisations such as Eli Lilly & Company, EMC Corporation, NASA, and Procter & Gamble. It claims crowdsourcing helps companies to ‘generate innovative ideas and solve problems faster, more cost effectively, and with less risk’.

Kaggle, which was founded in Melbourne but is now in San Francisco, has over 117,000 data scientists worldwide and describes itself as the leading platform for predictive modeling competitions. It has helped GE, Merck, Ford and Facebook to improve sales forecasting, retain customers, accelerate product development, gather insights from social media and lower operating costs.

However, not everyone is a fan. Critics claim crowdsourcing pushes down wages. Contributors are often expected to work ‘on spec’ and where they are paid, it is often well below market rates. Quality can also be an issue. Even proponents of crowdsourcing admit that it is not suitable for every task.

Alec Lynch of DesignCrowd advises using crowdsourcing for creative tasks such as photography, graphic design, programming and innovation. ‘It allows you to harness multiple brains and get the best idea possible,” he says. However, he recommends traditional outsourcing for expensive or complex tasks such as legal advice and physical tasks such as business card printing.

Given the number of home-grown companies now in operation, Australia appears to have established itself as a global crowdsourcing hub. According to the professional services firm Deloitte, it is also the country which has most to gain from crowdsourcing. Deloitte believes crowdsourcing can help to overcome the disadvantages Australia faces due to its distance from major markets, which in effect reduces incomes by the equivalent of $7,000 a year for each full-time worker.

Its report, entitled Where is Your Next Worker?, says: “Australia is hurt by its distance from world markets more than any other OECD country. This is why crowdsourcing could be more valuable to Australia than to any other advanced nation on earth. Using crowdsourcing and other innovative approaches, Australia can fill many skill gaps by going online, without having to search the world for skilled migrants.”

Last updated:
27 February 2019