29 July 2011

The Great Internet Debate

Over the past few weeks we’ve heard a lot about the impact of the Internet on the retail sector as consumers continue to abandon traditional shopping for the cost-saving and convenience of online shopping.

However, what hasn’t been getting anything like as much attention is the effect that the Internet is having on the way companies source various resources required for the operation of their business. The Internet is enabling the phenomenon of crowdsourcing - a practice that involves companies posting an ‘open call’ on the web for the provision of a specific product, service or solution (to a problem). An open call invites contributions from anybody anywhere in the world who feels they can provide the required product/service/solution.

U.S. T-shirt company Threadless is an example of an organisation that uses this approach. In this instance, the open call invites people to submit new T-shirt designs, an online poll then determines the popularity of the submitted designs which then forms the basis for the decision by Threadless as to which designs go into production. The produced T-shirts are then sold on-line. Therefore, in this web-enabled business model, not only is the sales channel the Internet but the web-based product design is almost free (design ‘winners’ receive a modest payment) as is web-based market research (an on-line ‘community’ provides their opinion of the submitted designs for free).

As we’re in the early days of crowdsourcing, it’s too soon to be sure exactly what the impact of this practice will be on different industries and occupations. However, crowdsourcing has already led to an active debate as to whether it should be seen as a highly positive development because it is so inclusive, offering anyone with Internet access the chance to offer their services, or whether it is less laudable, even exploitative, because of all those who submit their work, only the winner receives payment. 

Author: Professor Richard Dunford – University of Sydney Business School

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